What Are Digital Products 2024
Many entrepreneurs are building entire businesses around digital products—such as ebooks, online courses, music, or custom templates—due to their popularity and ease of distribution. Other companies are launching them to complement physical items and services.
Learning how to sell digital products offers the potential for passive income, since they can be created once and sold repeatedly to different customers without needing to replenish inventory or deal with order fulfillment. That makes them ideal for creatives, bloggers, educators, and freelancers looking for efficient ways to make money online.
If that’s you, here’s how to create, market, and sell digital products online—including examples of the top digital products.
What are digital products?
Digital products are intangible goods that exist in a digital format. These include ebooks, music, digital art, software, online courses, and virtual goods in video games. They're typically delivered to customers via download or email, and offer businesses a way to provide value without physical inventory.
Why sell digital products versus physical goods?
There are many advantages to selling digital products, which makes them uniquely attractive to entrepreneurs:
- 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. Calculate your profit margins ahead of time.
- Potential to automate. Orders can be delivered instantly with no oversight.
- 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. There are many options for incorporating digital products into your business.
- E-learning is increasingly popular. Online educators have a massive opportunity to expand their business and impact with e-learning, an industry expected to be worth $840 billion by 2030.
But online digital products also come with specific challenges you’ll need to watch out for:
- You’re competing with free content. With digital goods, consumers will usually have access to free alternatives to what you’re selling. This necessitates careful thinking about your niche, the types of products you sell, and how to write your product descriptions.
- You’re susceptible to piracy. You'll need to reduce the risk of content theft by employing tools to protect your products.
Where to sell digital products
There are three main channels for digital products: self-created online stores, social media, and digital marketplaces.
- Start an online store using an ecommerce platform like Shopify, then integrate a digital product app for seamless selling and management.
- Promote your digital products to your audience via social media. Use native shopping features or connect your Shopify store.
- Create a profile on an established digital marketplace within your niche and access a pre-established audience.
Remember, in exchange for exposure, some marketplaces can take up to 50% commission for every sale. Avoid seller fees by building your own online destination for trending digital products.
