Digital products can’t be held, tasted, or touched, but everyone consumes them—from music to videos, ebooks to online courses, and more.
Many entrepreneurs build entire businesses around these intangible goods, due to their popularity and ease of distribution, or launch digital product lines to complement the physical items or services they offer.
What makes digital products especially appealing, however, is they can be created once and sold repeatedly to different customers without having to replenish inventory, making them ideal for creatives, bloggers, educators, and freelancers looking for passive income streams that require less effort to maintain.
This guide will walk you through the top digital product examples, how to create your own, and marketing tips to sell online successfully.
Find your next digital product idea 💻
What are digital products?
A digital product is an intangible asset or piece of media that can be sold and distributed repeatedly online without the need to replenish inventory. These products often come in the form of downloadable or streamable digital files, such as MP3s, PDFs, videos, plug-ins, and templates.
Why sell digital products versus physical goods?
Digital products have many advantages that make them uniquely attractive to sell:
- Low overhead costs.You don’t have to hold inventory or incur any shipping charges.
- High profit margins. There’s no recurring cost of goods, so you retain the majority of your sales in profits.
- Potential to automate. Orders can be delivered instantly, letting you be relatively hands-off with fulfillment.
- Flexible products. You can offer free products to build your email list, monthly paid subscriptions for access to exclusive digital content, or licenses to use your digital products. You have a lot of options as to how you incorporate digital products into your business.
- E-learning is the future of education. You have a massive opportunity to expand your business and impact with e-learning, an industry expected to be worth $374 billion by 2026.
But digital products also come with specific challenges you’ll need to watch out for:
- You’re competing with free content. With digital goods, consumers can probably find free alternatives to what you’re selling. You’ll have to think carefully about the niche you target and your product descriptions, offer high-quality products, and know how to build your brand in order to compete.
- You’re susceptible to piracy/theft. You need to take precautions and reduce these risks by employing the right tools to protect your products.
- There are some restrictions on how you sell. For example, you must sell physical products through the Facebook and Instagram sales channel according to their commerce policy.
Most of these challenges can be overcome, however, if you employ the right tools when designing your digital product business.
Learn more: Trending Products to Sell in 2021
6 profitable digital product ideas to sell online
For a little inspiration when creating these products, explore the top types of digital products listed below:
- Educational products
- Licenses to use your digital assets
- Membership sites
- Digital templates and tools
- Music or art
1. Educational products
Online courses are best suited for in-depth content. They require some effort up front, from creating a presentation to recording a video walk-through. When creating courses, start with learner outcomes: what do you want the learner to know or be able to do at the end of your course?
You can include quizzes, knowledge checks, and interactive activities within your courses to help break-up learning content and make your e-course more engaging. Consider learning and implementing a teaching model like ADDIE.
If you consider yourself an expert on a particular topic, digital products are a great way to package that information and sell it to others looking to learn.
If there’s an abundance of free blog posts or tutorials on YouTube about what you’d like to teach, you can compete by delivering content that promises not education but transformation. In other words, don’t sell the product—sell the customer’s own potential after buying your product.
You can leverage an existing reputation as an expert to garner attention for your products or, if you’re starting from scratch, you can create and give away free content to generate interest and leads for your paid digital products.
2. Licenses to use your digital assets
From stock photos to video footage, from music and sound effects, there’s a global ecosystem of licensable digital assets uploaded by creatives for other creatives to use in their work.
By offering licenses to individuals and businesses, you can charge for the use of your photos, videos, music, software, and more in your own store and through online marketplaces, such as stock photo sites. In exchange for exposure, some of these marketplaces can take up to 50% in commission for every sale. However, if you want to build your own destination for digital assets, you can use Sendowl to power this type of business with unique auto-generated license keys.
When coming up with assets to create, it helps to work backward from the needs of your intended audience. Start by thinking about what kind of assets they’d want to use in order to create products that are actually in demand (and thus easier to sell).
Also, be sure to protect your digital products with watermarks and other security measures, especially if you’re selling photos.
3. Membership sites
Instead of selling individual digital products, you can bundle them together and lock them behind a paid subscription to generate recurring revenue.
This approach is ideal if you plan to maintain a growing library of premium content and nurture a community of passionate members. In some cases, paid digital subscriptions can even create an opportunity to directly monetize your existing content marketing efforts.
Since this content is behind a gate that only paying subscribers can access through their customer account, you can also host exclusive content that can be streamed rather than downloaded.
4. Digital templates and tools
Digital products can also come in the form of intangible tools that equip professionals to do tasks that either fall outside of their skill set or take up a lot of time. You can sell digital solutions to the common pain points and needs of a specific audience.
Some examples include:
- Digital marketing strategy templates for entrepreneurs
- Résumé templates for job-seekers
- Mobile apps for businesses
- Graphic design templates for brochures, flyers, posters, etc.
- Adobe Photoshop filters and plugins for media editors
- Icons, fonts, or UX Kits for web designers
If you already have a freelance business, it might be worth considering how you can turn your skills and services into digital products to create passive streams of revenue.
5. Music or art
If you’re a musician or an artist, chances are you’ve explored ways you can monetize your talents or the audience you’re building. While t-shirts or prints are always an option, there are also plenty of possibilities in digital downloads.
A musician can sell ringtones of their best songs alongside their merch. Or a cartoonist could turn their art into printables, phone wallpapers, or print-on-demand products. A filmmaker can sell their movies online. Since you don’t have to hold any inventory, you can experiment with different formats to see what your audience wants without much risk.
Services tend to pair well with digital products because services are essentially their opposite—with services, your “inventory” is limited to the number of working hours you can accommodate.
Plus, customers often receive digital products as part of their “purchase” with many services. A designer will deliver logos. A personal trainer might deliver a workout plan. Leaning into this, you can position certain services as packages containing valuable digital products.
For example, you could offer a consultation for a fee, along with a personalized report or Excel spreadsheet, and then upsell your customers on your other services or products. Or you could offer a free downloadable product to generate leads for your email marketing list, a tactic that many online businesses employ today.
If there are common tasks you complete as part of your service business that are easy for you but valuable to your customer, you can consider productizing them to create revenue streams that require less of your time and effort to maintain.
Free: The Big List of Business Ideas
To help you find the inspiration to start, we compiled a list of 100+ in-demand business ideas, broken down into categories like fitness, apparel, and gaming.
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How to create digital products
While it’s easy to get stuck waiting around for a eureka moment, finding a good business idea is more of a process. It’s great to have an idea that excites you, but if you want an idea that sells, you’ll want to follow a process of brainstorming, research, and validation.
Generate ideas to start with, and write them all down. Don’t be too critical. Bad ideas can lead to good ideas and vice versa. The key to brainstorming is to avoid overthinking things.
If you’re looking for a spark, here are some questions to ask yourself:
- Can you teach customers how to use your products? For example, if you sell knitting products, you could offer appointments to teach advanced knitting techniques.
- Are there things you can help your customers with related to your overall industry? If you sell surfboards, you could create a workout program to help your customers stay in surf shape at home.
- What are the values you’ve built your business on, and what are topics related to them? For example, if you sell sustainable apparel, you could create a course teaching your customers how to live a more sustainable life.
- In what ways could you bring your community of customers together? If you sell kitchen supplies, you could run a virtual guided wine tasting event.
- What are you good at? If you’re really great at product photography, you could teach other people how to get better at product photography too.
Do some research to add to your list of ideas. Look for pain points your customers have related to your product, industry, or values, as well as topics they love or get excited about. Both present great business opportunities to provide value in the form of an educational product.
Here are some good places to get started doing research:
- Facebook groups. There are Facebook groups dedicated to every niche and audience imaginable, making them a great place to learn what your potential customers care about.
- Industry forums. Forums dedicated to hobbies and communities in your industry can help you learn more about what people want and need in your broader industry.
- Product reviews. Read both the reviews for your products and competitors’ products to get ideas. These could come from the reviews on product pages as well as stand-alone reviews on blogs and other websites.
- Blog posts and comments. Read the blog content your community might be reading, as well as the comments, to get even more ideas. For example, if you sell auto parts, dig around on automotive blogs.
- Emails from customers. Finally, don’t forget to go back and reread any emails or messages you have gotten from customers over the years. The people who took the time to contact you with thoughts and concerns are usually “high intent” customers and they might have shared some really useful insights.
Before committing too much time to an idea, you want to validate it and make sure it’s solid. The last thing you want to do is invest a lot of time or money in a new venture without knowing it has a good chance to be successful.
There are a couple of ways to validate your idea:
- Keyword research. Use a keyword tool to see how many people are searching for your topics. This will give you an idea of the opportunity size of each one.
- Google Trends. Search your topics on Google Trends. Look for topics that are growing in interest. This means the opportunity size will keep growing.
- Ask for feedback. Contact your customers directly, either through email or social media. A poll or survey is a great way to collect customer feedback.
- Start small and iterate. Sometimes, the easiest way to validate an idea is to experiment with a smaller version of the idea with room for growth. The goal is to get something out into the world as soon as possible so you can put your idea to the test and improve from it from there.
No matter what industry you’re in, you have unique strengths and knowledge that would be valuable to your customers.
4. Create an online store
Once you validate a digital product idea, you’ll want to get an ecommerce platform to sell on.
Shopify is the easiest and most reputable way to create an online store. You don’t need any tech skills or a big budget, and you can choose from over 100 templates with built-in features to get set up quickly—all for a small $29 monthly fee. There are also over 4,000 free Shopify apps you can use to manage your store and sell more digital products online.
8 apps for selling digital products on Shopify
There are a number of sales and marketing tools you’ll want to consider, depending on your needs:
- Digital Downloads. This free app by Shopify offers a simple way to sell digital products on your own website. Upon purchase, customers can download their file immediately and receive a link in their email.
- SendOwl. For more complex digital product businesses, SendOwl comes with a variety of features and useful automation, like expiring links and auto-generated license keys, to power your products.
- Courses. This Shopify app lets you create lessons, tutorials, webinars, and manuals and sell them online. You can create beautiful online education portals, embed pre-recorded videos, and even livestream lesson content. Customers can track their progress and earn certificates for their completion.
- Single Music. If you’re a musician selling music, Single was made with you in mind. Not only does it bridge the gap between physical and digital music sales, it also lets you easily include clips on your product page for customers to sample.
- Thinkific. This app lets you monetize your expertise and grow your audience by adding online courses to your Shopify store. You can upload and drag and drop content to create a course curriculum. A free plan is available, allowing you to create up to three courses.
- FetchApp. FetchApp is another digital download delivery app that offers fewer features than SendOwl but has a free plan available (5 MB of storage) and gives you the ability to attach multiple files to a single product.
- Sky Pilot or Bold Memberships. These apps are ideal for building a membership program. You can sell files and exclusive video streams to customers. Customers can then access all of their previously purchased files through their own customer accounts.
- BookThatApp, Tipo, or Sesami. These three apps are perfect for businesses that offer one-to-one or small group interactions and need an appointment booking solution to schedule consultations or coaching sessions with customers. All three apps have a free plan available.
Beyond these digital product delivery systems, there are other Shopify apps to power and protect your digital goods, such as:
- Recurring Order & Subscription. This is an app for weekly or monthly subscriptions. Use it to automate recurring orders, invoices, and digital subscriptions for online memberships or programs.
- Photolock. If you want extra protection for visual products like stock photos, this app offers most of the security measures you may need, from watermarks to source code protection.
- Disable Right-Click. When your content is your product, this app helps you protect it from theft. You can lock images and text so they can’t be saved or copied without your permission.
Depending on your needs, these apps and more can be used together to help you incorporate digital products into your Shopify store and execute any of the digital product ideas below.
Note: When creating digital products in Shopify, be sure to uncheck “This is a physical product.”
Sales and marketing tips for selling digital products
Whether you’re a brand-new business owner or adding digital products to your existing store, keep these tips in mind:
- Create a great product. The first criteria for creating digital products is to add value to your customers’ life. Since you’re competing with free content on the web, invest in building a product people can’t find anywhere else.
- Promote a lead magnet. Regardless of how much your product costs, create a light version of it for free. A free product can help you build an email list you can sell to in the future. It also opens the door for upselling and retargeting potential customers with different promotions. Free builds trust between your business and potential customers.
- Start an affiliate program. Affiliates are a huge source of traffic and sales for creators selling digital products. Find influencers who are established and trusted in your industry and offer them a commission for each sale they make. You can create different percentages for different affiliates, so if someone has a massive audience, you can give them a higher commission rate to promote more and attract customers.
- Collect pre-orders. A great way to get early sales is by giving a discounted “early bird” price. If you’re releasing a new digital product, you can offer a 50% discount for the first 100 buyers, then 25% for the next 100 buyers, and then release the product at full price after the 25% discount runs out. You can only launch the 50% discount to your existing audience to reward their loyalty, get feedback, and drive pre-launch sales.
- Offer a money-back guarantee. If you’re hesitant about offering a warranty on your products, it makes sense. Some people could buy and use your product then ask for their money back. But it’s all a part of running an online business. The rewards of higher conversion rates outweigh the small percentage of people who may abuse the policy. A money-back guarantee shows potential buyers you’re putting your money where your mouth is, and putting the risk on you, not them.
Creating the best digital products for your business
Without the need to hold inventory or the overhead associated with selling physical products, digital products can be a profitable online business idea.
There are countless ways you can create and resell digital products and incorporate them into your business. With a little ingenuity and upfront investment of time, you can serve up irresistible value that can more than pay for itself over time.
Ready to create your first business? Start your free 14-day trial of Shopify—no credit card required.
Digital products FAQ
What are some examples of digital products?
- Online courses and webinars
- Kindle books
- Software programs
- Web elements like Shopify or WordPress themes
- Membership sites
- PowerPoint templates
How do you create a digital product?
- Brainstorm digital product ideas.
- Research buyer pain points.
- Validate ideas through keyword and trend research.
- Produce your digital products.
- Create a Shopify store.
- Build an audience and market your digital products.
What digital products are in demand?
- Educational products like ebooks and online courses
- Exclusive membership communities
- Digital templates and tools
- Repurposed music or art
- Productized services
- Licenses to use digital assets