The Ultimate Guide to Creating and Selling Digital Products in 2024

Who knew that selling digital products would be a valid business idea? As we advance to a digital world, business has never been the same. Selling physical products is no longer the only option for aspiring entrepreneurs.

The idea of selling something that you can’t physically have may have seemed like an absurd idea 20 years ago. However as digital products continued to gain popularity, we eventually came to the realization that selling a digital product was actually a good idea. In this ultimate guide, we will go through everything you need to know to create and start selling your digital products to help you get started today.

What Is A Digital Products

When you hear about digital products, you might be thinking about ebooks, digital arts, or printable coloring pages for kids, but there is more than that. In fact, digital products are any product that you can sell and deliver online.

Here are some types of digital products for you to consider.

E-books: The most popular digital product, it can be anything from cookbooks, and novels to how-to guides.
Online Courses: Online courses are popular digital products among gurus, fitness trainers, influencers, and more. It’s one way to generate passive, recurring income by leveraging your expertise.
Templates and Printables: Contact templates, calendar templates, and budget planner templates are all possible options. Apart from printable coloring pages, there are also business cards, weekly planners, and recipe cards.
Software and Apps: If you know how about programming, selling software and apps is a great idea since the barrier to entry is high and it’s less likely to be replicable.
Digital Art and Graphics: Compared to physical art, digital arts only need to be created once, but can be sold thousands of times.
Music and Audio: Music, music sheets, podcasts, and audiobooks.
Photography: Sell stock photos to individuals or stock photo websites such as Shutterstock, Pexels, and Pixabay and receive commissions and donations from those who download your photos.

What are the benefits of selling digital products?

High profit margin

Creating a digital product doesn’t require significant upfront capital. Many costs such as product costs, inventory, and distributing costs are removed, allowing you to set a reasonable price but still achieve 70-80% profit margin, whereas physical product often only provides 10-20% product margins.

Scalability

One of the best things about selling digital products is its scalability. A physical product can only be sold once and there are risk of malfunctioning or being defective. However, for a digital product, you only have to create once, and you can sell it definitely, providing endless potential to generate passive income.

Global Reach

Being able to target a wider audience can dramatically increase your revenue. Selling digital products removes geographic limitations and allows you to sell anywhere around the world. Apart from that, the delivery is instant, and it removes andr loss.

Flexibility

Just like other online businesses, selling digital products provides you the freedom and flexibility to work whenever and wherever you want. You can create your own schedule and deadlines to work on your products while managing other aspects of your personal life.

Selling digital products certainly seems attractive. However, this isn’t a get-rich-quick scheme and it’s harder than it sounds. Creating successful digital products takes hard work, creativity, and perseverance, and here’s where you do.

How to Create and Sell Your Digital Products

Identifying YourTarget Audience

The first and one of the most important steps of starting a business is to identify who your target audience is. And here is how you find your nice.

Your expertise

You can start by brainstorming the value you can provide to others. Grab a notebook and write down your skills, hobbies, and experiences. What could you talk about for hours without getting bored? What do you have profound knowledge of? What can you teach?

For instance, if you are a guy who likes crocheting, you can target other men who are interested in crocheting.

Figure out the values you can provide for others and look for those who might need them.

Market research

market research — Image by vectorjuice on Freepik

Another way to search for your niche is by looking at market demands. Go onto Amazon to check out the bestsellers. After that, do some more research on who the buyers are, is there a gap in the market? Are you able to make a twist to the bestsellers and target the same audience?

You can only use tools like Google Trends and go onto social media to find out what’s trending and what people are interested in and come up with some solutions for them.

It may not be clear who your target audience is at first, but that’s why you should create buyer personas to guide you towards them.

Here’s how to create your own buyer personas:

Demographics: Age, gender, location, income level.
Psychographics: What are their values, interests, and lifestyle choices?
Pain points: What problems do they have? What has been making their lives miserable?
Goals: What are they trying to achieve? Where do they want to be in life?
Buying behavior: How do they make purchasing decisions? Are they impulse buyers or researchers?

Have as much information as you can but don’t try to niche down too much, as the more you do that, the smaller your target audience will be. Once you have created your buyer personas, it’s time to validate your ideas.

Surveys: Create a survey using tools like Google Forms or SurveyMonkey. Target your buyer’s personas and ask them what pain points they have and all relevant questions.
Social media polls: Use Instagram stories or Twitter polls to get quick feedback.
Landing page and pre-sales: Create a simple landing page for your product idea and run ads. Offer pre-sales and see if anyone is interested in it.

The goal of identifying your niche is to look for people who are genuinely interested or find value in the digital products you create, and it helps you to create digital products that are specifically designed for them.

It’s important to note that your target audience might not be who you expect it to be, so don’t be surprised, and remember to keep improving your product so it can resonate with your target audience more effectively.

Choosing Your Digital Product

Now, if you’ve found your niche, and understand who your target audience is and what they want, what type of digital product is the best? Here are some factors to consider:

Your own preference: If you are an introvert and are reluctant to show your face in front of the camera, selling online courses is not the only way. You can sell an e-book with a how-to guide to share your knowledge.
Sales potential: Which type of product is more likely to sell? Videos demonstrating how to do something is more engaging and preferred compared to a how-to guide
Your niche: Sometimes there are limited options as to which types of digital products you can sell depending on your niche. If you are a photographer, selling photos will likely be your option.
Long-term potential: Can this product be easily updated or extended so it doesn’t become antiqued?

Eventually, online courses will be the additional digital product you can sell. Regardless of what you sell at the start, you can always create a course that teaches others how to do what you do and target a different audience to increase your revenue.

For example, if you are a photographer, you can teach people how to take great photos, if you are a musician or an artist, you can teach others how to create music with their own unique style.

Start Creating Your Digital Product

You now all have the information you need to create your digital product. So, let’s break down this creation process.

Planning and Outlining Your Product

First things first, you need to plan out the creation process instead of getting into it right away. Here’s where you start.

Define Your Objectives: Combining the information about your target audience and the problems you are trying to solve for them, write down what exactly you want your product to achieve. The objectives help you identify the key information or solution you must include in your product
Create a Detailed Outline: Break your product down into different sections and chapters
Set Deadlines: Setting deadlines is crucial if you want to finish your product.

Tools and Softwares

Depending on what you’re creating, you’ll need different software. Here are suggestions for you.

For E-books: Microsoft Word or Google Docs for writing, Canva for design.
For Online Courses: Teachable or Thinkific for hosting, Camtasia for screen recording.
For Templates and Printables: Adobe InDesign or Canva
For Membership Sites: WordPress with MemberPress plugin.

Remember, you don’t need the fanciest, most expensive tools when you’re starting out, these tools are sufficient to for your first digital.

Design and User Experience

Your product needs to look good and be easy to use. If you need some help with designs and user experience, here are some tips for you:

Keep It Clean and Simple: Don’t go crazy with fonts and colors. Stick to a consistent palette.
Make it easy to read: Consider things like font size and contrast for readability
Be Consistent: Use the same style throughout your product.

Quality Control and Testing

Before you launch your product, you have to make sure that there are no errors.

Proofread: Proofread yourself and get someone else to proofread it for you to fix any typo. Another more convenient way is to use Grammarly when you create your online courses or e-book.
Test All Features: If you’re creating an app, course, or membership site, make sure everything works as it should.
Get Beta Testers: Find a small group of people to test your product and give honest feedback.
Implement Feedback: When you receive feedback, use them to improve your product

Continuous Improvement

Improvement — Image by vectorjuice on Freepik

Perfection can be the enemy that stops you from launching your product. Therefore it’s important to know that your first product may not be perfect and it doesn’t have to be, it just needs to provide value to your target audience. You can always improve and iterate as you go.

Furthermore, the digital world moves fast, and your product needs to keep up. So even if you feel like your product has been perfected, you will still be required to regularly update it and look for improvements to make it better and more relevant.

Pricing Strategies

Pricing your product can feel like a confusing process as many factors need to be considered

So, let’s break this down:

Factors to Consider When Pricing Your Product

Production Costs: How much time and money did you invest in creating this product?
Market Rates: What are similar products selling for? How much are your competitors selling their products for?
Perceived Value: What transformation or solution does your product offer? How valuable is that to your audience?
Your Brand Positioning: Are you positioning yourself as a premium option or a budget-friendly alternative?
Target Audience: What’s the spending capacity of your ideal customer?

Different Pricing Models

Choosing the right pricing model for your digital product can make a significant difference to your revenue, and here are some common pricing models you can choose from:

One-Time Fee: Simple and straightforward. Good for products like e-books or templates.
Subscription Model: Great for ongoing content or services.
Tiered Pricing: Offer different levels of your product at different price points. Make sure you align additional costs with the values you provide.
Freemium: Offer a basic version for free, then charge for premium features. This works well for software or apps.

Psychological Pricing Tactics

Now, let’s get into the fun stuff – the psychology of pricing. These little tricks can make a big difference:

Charm Pricing: Ending prices with “99” (e.g. $29.99) can generate more sales than “00” (e.g. $30.00) as people associate $29.99 with the 20-30 range and $30 with the 30-40 range
Anchoring: Show the original higher price alongside the discounted price.
Bundle Pricing: Offer some discounts when two or more items are purchased together can result in more sales and more revenue
Scarcity and Urgency: Limited-time offers or limited quantities can motivate people to buy now rather than later.

We recommend you use these strategies without ever trying to lie to your customers. Nobody likes to be manipulated and trust is important for success.

How to Test and Adjust Your Pricing

In order to find the optimal pricing for your product, you will have to test and adjust, and it can be changed as you continue to improve your product. Here’s how to refine your pricing strategy:

A/B Testing: Try different prices with different segments of your audience.
Gradual Increases: Start lower and gradually increase your price as you build your reputation and improve your product.
Customer Feedback: Ask your customers what they think about your pricing.
Watch Your Metrics: Keep an eye on your conversion rates to understand how your customers are reacting to the price change.

Don’t be afraid to spend a considerable amount of time on finding the optimal price for your digital products. As the price alone can affect your sales and profits.

Finding The Right Platform

The question you are probably thinking right now is where are you going to sell your digital product？ To be able to confidently select the right platform, you have to understand the options you have and the pros and cons of each of them.

Choosing Between Hosted Platforms and Build Your Own Website

Hosted Platforms: Hosted platforms are pre-existing online marketplaces where you can sell your digital products.

Pros:

Easy to set up
Built-in payment processing
Often include marketing tools

Cons:

Less control over customization
They take a cut of your sales

If you’re just starting out, marketplaces can be a great way to start. Here are some popular ones:

Gumroad: Great for a variety of digital products. I sold my first e-book here!
Teachable: Awesome for online courses but also offers a platform for other digital product types.
Etsy: Perfect for printables and digital art
Creative Market: Ideal for design assets, templates, and fonts, but also a stock photo website.

If want to build a brand, you may want to consider building your own website.

Pros:

Complete control over your platform
No commissions to pay
Can be more cost-effective in the long run

Cons:

Requires technical knowledge or hire someone who has it
Can be time-consuming to set up and maintain

How to Set Up Your Website

Choose a Domain Name: Make it memorable and relevant to your brand.
Select a Web Host: Some options are Hostinger, Bluehost, and WPX.
Design Your Site: Make it clean, professional, and easy to navigate.

Same with your digital product, don’t get caught up in making your website perfect before launching, done is better than perfect.

Payment Gateways and Delivery Systems

You will be payment gateways in order to receive payments from your customers. Most website builder allows you to set up payment gateways effortlessly so you can receive payments from your customers. However, if you are using WordPress to build your website, you will have to install plugins such as WooCommerce.

Popular Payment Gateways:

PayPal: Widely recognized and easy to set up.
Stripe: Great for recurring payments.
Square: Good option if you might sell physical products in the future too.

For delivery, most e-commerce platforms have built-in digital delivery systems. Again, if you’re using WordPress, you will have to install a plugin, Easy Digital Downloads is a great one.

Make the buying process as smooth as possible, considering adding Google Sign-in to your website so your customers don’t have to go through the painful process of creating an account.

Marketing Your Digital Products

Now, it’s time to market your products. An incredible product alone is not enough if nobody knows that it exists. Marketing is absolutely required to make your product visible to the public and reach your target audience. However, it’s more than just telling people that your product exists, you will have to communicate the values and help your target audience understand why they need the solution you provide.

Leveraging Social Media

social media platforms — Image by storyset on Freepik

Social media is the fastest and easiest to gain exposure and promote your product. The best thing is, it’s free. By creating organic content, sharing values, and directing your audience to your product, you will be able to generate sales without spending any money on marketing.

What you need to do:

Choose the Right Platforms: Different viewers have different intentions and preferences when they go onto different platforms. Figure out which one your target audience prefers.
Engage: Share valuable content, respond to comments, and build a community.
Consistency: Post consistently and don’t be disappointed if you don’t get views at first, it takes time

Content Marketing and SEO Strategies

Social media marketing can help you generate some leads, but some people are searching for your product on Google. If you just ignore them, you are leaving money on the table.

You can create:

Blog Post: Create a blog post related to your product’s niche.
Guest Posting: Write articles for other blogs in your industry. It’s great for backlinks and reaching new audiences.
Learn about SEO: Increase website ranking to increase visibility.

Email Marketing

Email marketing remains one of the best marketing strategies. The conversion rates of email marketing are higher because you are retargeting audiences that are interested in your business and products.

Some tips on email marketing:

Provide Value: Don’t just sell or ask for a favor in your emails, provide value before you ask for anything in return.
Use Automation: Set up welcome sequences, abandoned cart emails, and post-purchase follow-ups.

Just as social media followers, loyal subscribers can be another valuable asset to your business

Paid Advertising Options

While organic reach is great, sometimes you need to use paid advertising to increase your reach.

Facebook/Instagram Ads: Great for targeting specific demographics and interests.
Google Ads: Perfect for capturing people actively searching for solutions you offer.
Retargeting: Show ads to people who’ve already visited your site but didn’t purchase.

Start small with paid ads and test your campaigns. You want to know what is working and what is not. Pouring money into the campaigns without testing their effectiveness is the same as gambling, you will probably lose all your money.

Word-of-Mouth

When you have satisfied customers who see the value of your product, you want them to tell their friends and family about your products, and here is how you can do it:

Encourage Reviews: Ask happy customers if they are willing to leave a review, and provide discounts as a token of appreciation.
Create a Referral Program: Offer incentives for customers who bring in new buyers.
Showcase Testimonials: Use real customer stories on your website and in your marketing materials.

To effectively implement marketing strategies especially when starting out, prioritize and focus on one at a time. Diverting your attention and energy across different marketing strategies before mastering any of them may be a waste of time. Be patient and test one strategy at a time before moving to another to determine which one works the best, and slowly implement additional strategies to promote your digital product.

Conclusion

There you have it! I hope that after reading this lengthy post, you are ready to start creating your own digital product. Selling digital products may not be as easy as it seems, but it’s definitely a good path to build your money-generating engine. Don’t hesitate further and start building yours today!