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How To Sell Digital Products And Downloads: The Complete Guide

by GK June 24, 2020

The current developments in the eCommerce industry make anyone wonder about investing in this lucrative market. After all, eCommerce is a multi-trillion dollar market; it’s no brainer that no entrepreneurial mind can overlook the earning potentials here. 

What do you think? Are you wondering about what products to sell online?

Don’t worry, as this question haunts every wannabe entrepreneur in the market. Even giants like Amazon invest millions in product research and discovering the best products to sell online.

Well, it’s Amazon and they can do anything. They are leaders in physical eCommerce. However, you are some John Doe with a limited budget and a big dream to become a successful eCommerce entrepreneur.

So how about we talk about selling digital products today. It’s a substantial market, and comparatively less competitive; we will see about competition in the later parts of the article. For now, be advised that I have curated this all-in-one guide to help entrepreneurs like you and answer the most common questions about digital products eCommerce. We will cover the topics like-

  • How to sell digital products online?
  • How to sell digital downloads?
  • Types of digital products to sell
  • Best digital products to sell online
  • Creating digital products and
  • Where can I sell digital downloads?

So let’s begin now.

1.     Types of Digital Products to Sell

Digital products are a massive segment in themselves. You would be surprised to know about your options here. Every category can split into N numbers of sub-categories and sub-niches to give you the best digital products to sell online. Here, I am covering three major types of digital products, which are the most popular and profitable for eCommerce entrepreneurs:   

1.1 E-Publishing/eBooks – Selling information curated in digital books

Digital books, AKA eBooks, are one of the most popular categories of digital products. It’s a growing market, as not just traditional publishers are now coming up with digital versions of their physical books but also a large number of new publishers have emerged with their eBook only publications.

Several market studies have revealed that the global eBook market in 2019 had crossed the $18.13 Billion mark, while also showed potentials to reach the $23.12 Billion mark by 2025. Yet another report by Statista reveals a similar stat – a CAGR of 4.2% would drive the eBook market to cross the $19.3 billion mark by 2024.

If you are worried about the impact of the COVID-19 pandemic, then be advised that the sales of physical books have surged in lockdown situations. Sources like BBC and NPD group are indicating a 234% spike in the sales of children’s educational titles and 66% lift in sales of children’s non-fiction books.

This massive spike in the sales of physical books is promisingly a positive influence on the digital versions of the books, too. 

Pros and cons of selling eBooks:

The downside of listing eBooks as digital products is they are easy to pirate or plagiarize. If someone has an eBook, he or she might just create a pirated copy and upload it on the internet for a lesser price or no price at all. Besides, these are intangible products. A customer who has purchased an eBook is never going to purchase the same thing again. If someone is purchasing a pack of Shampoo, it’s certain the customer would come back for replenishment. It’s nothing like that with eBooks.

Don’t lose your hopes as the upsides of selling eBooks are worth cheering. If you have an eBook to sell, you have it forever; your stocks wouldn’t drain ever. You can sell the same eBook repeatedly and keep making money with it. You can control your margins, avoid the cost of physical warehouses, set your own price point, and launch heavy discount campaigns. Besides, there are ways to avoid eBook piracy or make your eBook experience good enough that their pirated versions go absolute in front of the genuine reading experience. Same as Amazon has done with Kindle.

1.2 Online Courses – Selling information in protected content.

While eLearning is a massive industry in itself, there is a significant portion of it for self-learning segments as well. In 2019, the overall eLearning industry was worth $200 billion, and marketers expect that it will grow with a CAGR of 8% between 2020 and 2026.

While it looks so good in the native state, the COVID-19 pandemic has also had a massive impact on the eLearning industry – a positive impact indeed. We were expecting the self-paced learning market to take a hit in 2020-2021, but that was before the pandemic. Now, all kinds of online courses are trending and self- paced learning courses are growing with them, too. Self-paced enrollments on Udemy has surged by 425% amidst the COVID lockdowns.

Dorian Martin, an educational expert and writer at the academic term paper service EssaySupply states that the eLearning Marketplace industry has now reached its top as both businesses and academic institutions are now extremely focused on online training solutions and opportunities. You can create an eLearning marketplace like Udemy and make money selling self-paced courses created by subject experts from around the planet. Experts will create and upload their courses on your marketplace, and you will earn money charging a small commission from their sales. Here are top skills that are on-demand on Udemy now:

Pros and cons of selling eLearning courses:

The cons of selling self-paced online courses are somewhat similar to that of eBooks. You will face a similar kind of issue with piracy and plagiarism. Besides, you will need subject expertise if you are thinking about running as a one-man army, which is not possible. Hence, you will definitely need subject experts by your side to offer different types of courses for everyone. 

Good thing is, following the marketplace model with attractive incentives to the subject experts can easily solve this issue. Therefore, the only big task is attracting subject experts in your marketplace. Once done, you can continue with your strategies to gain customers/learners. Besides, there are various technical solutions and strategies to prevent piracy of your courses.

1.3 SaaS Products – Selling software products. as service

Both types of products, discussed up until now, are SMEs friendly. They don’t require much of the workforce and capital to begin with, but SaaS products are an entirely different road. It’s the biggest of all digital product markets. Considering, it’s a new market, discovered only after the introduction to cloud computing technologies, the expected $157 billion market-size by 2020 is a big deal. This industry has come a long way in a short span of time: 5.56 Billion in 2008 to $141 Billion in 2019.

You can sell software solutions under the SaaS model and make money charging recurring fees from your clients. Working purely on a subscription revenue model alone can let you make passive income in millions every month.

Pros and cons of selling SaaS:

SaaS is an expensive undertaking. You need software solutions to sell under the SaaS model. Developing them alone will incur big investments. Besides, you would be sharing your revenue with B2B companies and in house, a workforce to acquire the infrastructure support and services like cloud hosting, security, maintenance, continuous development, security patches, etc.

However, like every other digital product, you need not worry about inventory and shipping while selling your SaaS products. After some initial investments, you can successfully streamline big passive incomes just by charging a subscription fee. There is no limit to the number of solutions you can sell in the SaaS model. We have seen companies with single solutions making billions in this market.

2. Selling Digital Products Vs Physical Products

Both are different segments with different kinds of prospects. Each has its own advantage and downside when compared to reciprocally.

To sell digital products online, you don’t need a physical warehouse for keeping your stocks. However, the tangible nature of physical products allows a seller to demonstrate the value proposition easily than digital products. Physical products are easier to explain.

Nevertheless, as long as you choose the right products and adopt the right strategies, it doesn’t matter if a product is physical or digital; it’s always going to sell well. It depends on how you want to avail of the pros and cons of one kind of product against the other. Let’s look at the scenarios where both kinds of products prove to be of superior value against each other.

2.1 Why Sell Digital Products over Physical Products

Digital products are your best bet if you want to available the following benefits:

2.1.1 High-profit margin: Since digital products are intangible and need no manufacturing replenishment, you can actually sell them for cheaper prices and yet make big profits. 

2.1.2 No shipping cost: The Internet is your ultimate medium to not just sell digital products but also deliver them to customers. You can sell digital downloads without a need for physical shipping.

2.1.3 No shipping restrictions: Unlike physical products, digital downloads pose no restriction on the shipping and delivery scenarios based on the size and weight of a product.

2.1.4 No storage space and cost: Digital products need digital storage space, which is much cheaper than warehouses and cold storage facilities.

2.1.5 No inventory shortage: You can keep on selling a digital product forever, as long as it’s in demand, without exhausting your inventory. 

2.2 Why Sell Physical Products over Digital Products

Physical products might not have the benefits that digitally downloadable products offer, but they are a better choice in many foreseeable scenarios:

  • Faster to market, revenue: Physical products are tangible and you can hold them and explain the consumers about their applications. Hence, they are faster to market and can start selling in a quick time than digital products.
  • Fewer time resources: Digital products might not demand too many physical resources, but they demand a lot of time as a resource for entering in the market. Comparatively, you can introduce a physical product in the market way quicker than a digital product.
  • You get reorders: Digital products once purchased do not exhaust. While there is always a chance that a customer would come back to replenish the supply for a physical product.
  • Not so much competition: Since one needs big investments and complex infrastructure to sell physical products, not every entrepreneur with an average budget invests in this market.
  • Ideas can’t be easily copied: One can easily copy, plagiarize, or pirate and idea of a digital product. However, physical product ideas are not very easy to copy.

3. How to Sell Digital Products

I am certain that you might have tried to sell digital products online and found it very different from the talks in the market. It’s because digital products are highly competitive. If you don’t know the correct ways around how to sell digital products online, you are poised to fail eventually.

The same sweet spot of digital products that make them instant and ready-for-delivery actually induce challenges while selling them. Here, you sell digital downloads of your products. It’s a fact that a customer takes at least 5-8 interactions before making a decision. It is way higher than physical products, which are comparatively easier to explain.

Every touchpoint that leads a customer to your product needs strategic planning to direct traction in your conversion funnel. It begins right from your lead generation touchpoints such as live chat, affiliate websites, marketing emails, paid Ads, and SERPs.

Here is what you should do to convert a lead successfully into a final buying customer: 

3.1 Find and Position Product/Market Fit

Creating digital products to sell is all about demand-and-supply. However, the entire concept of demand-supply resides on the fact that a product is of no use to a customer who does not need it. Is your product-market fit? How do you position your product in the market?

Here is what customers care about: they don’t buy a product, they buy a solution for their needs. If your product fits the needs of most customers in a market, its market fit. Customers need a solution, and your product provides them with one. 

The ideal way to proceed in this direction is to do a target market research and look out for products that are in demand. Now, the demand could be for a specific product or for a specific niche, which covers an array of similar demands.  

After this, go around the demand and ensure that you can compete with the existing players in that market. Understand about the businesses that are fulfilling the current demands and pinpoint the aspects where you think you are better than they are. That’s where your opportunity lies. 

3.2 Generating On-Demand Traffic

Once you have found your opportunities to place your product in the market, it’s time to place your brand-identity into it. You have to position your business among the target customers and explain to them that your product fits right into their needs. That’s where the aspects of doing better than the existing players come into the limelight.

Formulate a brand message that boasts of the benefits your product has against the current players in the market. To do this, you need a cutting-edge marketing campaign. You need SEO to drive relevant traffic, but it’s a long-term goal. Your immediate steps should focus more on instant results, while keep working on the SEO for later parts of the marketing.

The best way to generate immediate results as a new entrant in the market is by employing:

  • Social media marketing
  • Social media Paid Ads
  • Search engine paid Ads
  • Influencer marketing
  • Relevant display Ads

You have discovered your target market and target audience, all you need now is the right channel to reach out, and that’s where the above channels work like a charm. You would have to make some investments, as these channels are paid, but they are worth considering, at least until the SEO kicks in.

3.3 Offer a Lead Magnet

Lead magnets are all about understanding a customer’s needs and anticipating the places where you can find them. Then you employ certain breadcrumbs on those places, which lead them directly or indirectly to your storefront. Be advised that leads magnets are not necessarily conversion tools. Instead, they are like trip-wires that trigger alerts when a potential customer enters on top of the conversion funnel.

A lead magnet may drive a customer onto your product pages or can also pass on a customer’s personal information such as email, name, phone number, etc., which you can use to drive the customer deep into the conversion funnel from there.

3.4 Offer a Tripwire

So what kind of tripwire should you offer to potential customers?

The fact is, you never know who your potential customer is, and you don’t see their faces. However, you know your product and traits of the people who would be interested in it. You target those traits using a tripwire that activates when a user interacts with it.   

Let’s understand this with an example.

Let’s assume that you are using Newsletter subscription form on your website’s home page; that would be a lead magnet. However, why would a user subscribe to your Newsletter? What’s in it for him or her?

“What” part is your tripwire. You give a user something of his or her interest to get leads in return. Now that “What” could be anything of value to that user while also making sure that it correlates directly to your product in target –

  • A discount coupon for your product
  • Opting for product update alert
  • A free download related to the product
  • Free trial of your product

3.5 Bring In Your Core Product

Once you are successful in giving a taste of your tripwire to a customer, it’s certain that he or she is now interested in the product. Now, it’s time to propagate the actual value by introducing your product as a solution. Place your product in the discussion as your core value with Unique Selling Points (USPs). 

Depending on your business goals and policies, you can offer so many USPs-

  • Better feature than your competitors
  • Better price than your competitors
  • Better lifetime value than your competitors

3.6 Maximize Customer Lifetime Value

When we talk about the lifetime value of a digital product, we talk about value to customers as well as to the business. As a business, although you present yourself as a savior to the customers, you would go bankrupt if you don’t think about the value of your own business.

Let’s say, you are selling a software solution. Here, there is a limitation to the value you should provide to the customers. Offering “Free Upgrade” is a way to offer extra value to the customers, but you should not just get overwhelmed and start providing “Lifetime Free Upgrades”. It’s something that good for your customers and they would love it, but would your business be able to sustain it?

Instead, you can offer free upgrades for a period of 2 years, and ask customers to pay a nominal fee to keep getting the free upgrades after 2 years. You can club this with some special discounts, up-selling, or cross-selling of other products with it. 

Say, you are selling an eBook for $5, but if a customer purchases two eBooks at a time, they get a 50% discount. Another example is Netflix. With its multiple subscription plans, Netflix offers value-added benefits to everyone interested in the respective benefits. Do you want to stream in SD quality -you can use a cheaper plan. While you can pay a little extra and can stream in 4K on multiple screens at a time. 

That’s what maximizing the lifetime value means to both the customers and the business, something of importance to both the parties.  

3.7 Scale Sales with Marketing Automation

Marketing automation is nothing but streamlining the above steps into an automated workflow. The entire scope of marketing automation is to drive prospects across your conversion funnel. Collect leads, convert those leads into buyers, and repeat buyers.

You can use N numbers of tools to automate each of the steps ranging right from lead collection via different forms to re-marketing, mail automation, push notifications, coupons codes, digital downloads, up-selling, cross-selling, and repeat sales.

You can use all kinds of tools at your disposal. To name a few, SEO analytics, email marketing tools, A/b testing tools, heat-map tools, push notification tools, digital download managers, abandoned cart recovery tools, etc.

Marketing automation is not an option but a necessity for surviving in a competitive market. Not using tools at your disposal is simply leaving the money on the table.

4. Best Products to Sell Online

Following the explained strategy, you can sell one or most of the following digital products from your eCommerce store. Be advised that you would need some unique set of features to accommodate the respective products.  

4.1 EBooks

It’s one of the most versatile categories of digital products. Any book that you can sell in the physical retail market can fit right into your digital products catalog, too. You can self-publish and sell your digital books on popular platforms like Kindle and Kobo, or you can create your own eBooks store. If not so, you can create a marketplace of eBooks and let other authors and publishers sell their eBooks on your website.

In any of the cases, you have tons of options to put together a massive catalog of books from all kinds of genres. Sci-fi, romance, Mystery, Magazines, children stories, academics, guides, etc.

Pro tip: While creating an eCommerce website to sell eBooks, it would be wise to focus on recurring revenue channels. So how to sell digital downloads of eBooks in this model? You can adopt a membership subscription model for genres like Magazines, journals, comic books, etc. As these titles renew periodically, customers would prefer to purchase a subscription rather than purchasing every release individually.

So make sure that whatever eCommerce software you chose for your eBooks store, supports the membership subscription model, too. 

4.2 Photos and Art

There is a decent market for creating digital products like stock photos and images. Following the membership or pay-per-product business model, you can sell images and photos, right on the same eCommerce website built to sell any other type of digital product

Although the market is impartially significant, I would advise that you don’t go for photos and images alone. It’s wise to club some other types of digital products in your catalog too. For example, eBooks, comic books, digital magazines, etc. 

4.3 Online Courses

As already explained, it’s a multi-billion dollar market. Even if you can focus on this category alone, you have tons of options to diversify your catalog. If fact, there are N numbers of business models to sell online courses. You can sell-

  • Self-paced courses like Udemy with a one-time payment model
  • MOOCs like Coursera with a monthly membership model
  • Certified distancing-learning academic courses like Edx with tuition fee model
  • Live tuitions like Varsity tutors with both pay-per-lecture and subscription options

4.4 Themes, Plugins, and Graphics

The market brims with open-source CMS and eCommerce platforms. To name a few WordPress, WooCommerce, Magento, PrestaShop, Shopify, Joomla, Drupal, and a lot more. With these popular open-source solutions, there is a big market for their modules, extensions, plugins, themes, and templates. For example, Magento extensions, WordPress Plugins, PrestaShop templates, and Shopify apps, etc.

You can focus on one or all of the popular open-source solutions and put together an eCommerce website to sell their modules, extensions, plugins, themes, and templates. If you can develop these solutions, outsource them, or construct a marketplace with community developers, you can have a massive market to claim a share.  

Besides, you can also include on-demand graphics creation services. For example, creating Ad banners, sliders images, product images, and other kinds of graphic designing for other individuals and businesses.

4.5 SaaS Products

Selling SaaS products is somewhat similar to that of products explained in the previous section, except you would not be selling the solutions at once. Instead, you would be renting your solutions and receive payments as a subscription fee.

Here, instead of focusing on all kinds of solutions, it’s wise, to begin with, a single product. For example, Grammarly is a single product and the company offers its software-as-a-service to receive recurring payments. They are running a massive business on a single SaaS product. You can come up with so many SaaS product ideas if you look in the market.

  • E-Commerce solutions; e.g. Shopify
  • Authoring tools; e.g. Oxygen XML
  • Email marketing tools; e.g. MailChimp
  • Project Management Systems; e.g. Trello
  • File storage solutions; e.g. Dropbox

4.6 Documents and Templates

If you have a way to streamline the supply, these are the easiest digital product to sell online. Informational pieces of documents and document templates are great in demand these days. To name a few, you can start by selling research reports, surveys, user manuals, guides, resumes, proposals, email templates, white papers, etc.

4.7 Printable or Print on Demand Products

This is not a complete digital product idea, but it’s worth considering if you can deal with some physical aspects such as shipping and storage management. You can sell print on demand products. Printable products start with digital files from the customers, but they are delivered to the customers in physical forms. For example-

  • Printed arts
  • Photo printing
  • document printing
  • Gift Tags
  • Workbooks
  • Personalized Notebooks etc.

We have written a detailed article about print-on-demand product ideas, you should check them out 

5. Top Tools for Selling Digital Products 

To operate an eCommerce website, you need software solutions, research tools, marketing tools, SEO solutions, accounting software, and many more. While many of the tools are secondary requirements, which come into play once you build your platform, an eCommerce platform is the most important tool to begin your journey.   

5. 1 Ecommerce Platform/Online Store

You need an eCommerce platform to build your digital products store. To sell your product digitally, you need some unique features that marketplace platforms like Amazon or eBay can’t provide. You need to build your own business model, and that’s where Shopygen can help you.

We have customized solutions to create digital product stores in most of the genres we talked about in this article. Whether you want to sell digital downloads, eBooks, Magazine subscriptions, online courses, live tuitions, or any kind of membership subscription, ShopyGen can provide you with the website you need.

Our solutions come with open source-code access and you need not pay any recurring fee to use them. Just a one-time payment and you become the sole owner of the source code. Self-host the source code on a web-server of your choice, follow a GUI to set up your store, and start selling on the go with ShopyGen. Contact our team for an online demo today.

6. Are you ready to start selling digital downloads?

You need not struggle a bit to sell digital products or beat your head around the questions like where can I sell digital downloads, how to sell digital downloads, and how much it takes to build a digital product store. Just focus on finding the best digital product ideas and leave the rest on the experts.

It’s indeed is a serious undertaking but not a complex one. If you know the correct ways to begin, it’s not tough to generate substantial passive income with a digital products website.

Did I mention that many of the digital products businesses today have grown even bigger than popular physical products stores? What’s your view? Feel free to share it with us.

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