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. They launch digital product lines to complement the physical items or services they offer.
What makes digital products especially appealing is that they can be created once and repeatedly sold to different customers without replenishing inventory, making them ideal for creatives, artists, educators, and freelancers looking for new income streams requiring less effort to maintain.
What are digital products?
A digital product is an intangible asset or media that can be sold and distributed repeatedly online without replenishing inventory. These products often come as downloadable or streamable files, such as MP3s, PDFs, videos, plugins, and templates.
The benefits of creating digital products
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.
- Extremely 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 to access exclusive digital content, or licenses to use your digital products. You have many options for 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 $331 billion by 2025.
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 exceptional product value, and know how to build your brand to compete.
- You’re susceptible to piracy/theft. You must take precautions and reduce these risks by using the right tools to protect your products.
- There are some restrictions on how you sell. For example, according to their commerce policy, you must sell physical products through Facebook and Instagram sales channels.
However, most of these challenges can be overcome if you employ the right tools when designing your digital product business.
Seven apps for selling digital products
If you’re building a digital product store or are looking for ways to add digital products to your existing store, there are several tools you’ll want to consider, depending on your need
- LinkIT Digital Downloads. Easier to learn than other apps, because it host digital files on platforms you already know (Google Drive, Youtube, Facebook and more). There’s also a free plan available.
- FdigDigital Downloads. This free app by Shopify offers a simple way to sell digital products in your store. Upon purchase, customers can download their files immediately and receive a link in their email.
- Sendowl. For more complex digital product businesses, Sendowl has various features and helpful automation, like expiring links and auto-generated license keys, to power your products.
- Single Music. If you’re a musician selling music, Single was made with you in mind. It bridges the gap between physical and digital music sales and 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 allows you to make 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 their previously purchased files through their 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 regular 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 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 to help you incorporate digital products into your Shopify store and execute any of the digital product ideas below.
6 Digital products you can sell online
1. Sell educational products like ebooks or courses
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 designing systems, 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 potential after buying your product.
You can leverage an existing reputation as an expert to garner attention for your products. 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. Sell licenses to use your digital assets
From stock photos to video footage to 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 using your photos, videos, music, software, and more in your store and through online marketplaces, such as stock photo sites. In exchange for exposure, however, some of these marketplaces can take up to 50% in commission for every sale. If you want to build your destination for digital assets, you can use Sendowl to power this business with unique auto-generated license keys.
When coming up with assets to create, it helps to work backward from your intended audience’s needs. Start by thinking about what support they’d want to use to create products that are in demand (and thus easier to sell).
Also, protect your digital products with watermarks and other security measures, especially if you’re selling photos.
3. Sell membership for access to exclusive digital products
Instead of selling individual digital products, you can bundle them 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. Sometimes, paid digital subscriptions can even create an opportunity to monetize your existing content marketing efforts directly.
Since this content is behind a gate only paying subscribers can access through their customer account, you can also host exclusive content that can be streamed rather than downloaded.
You can build this business idea using ChargeRabbit for recurring subscription billing and SkyPilot as your digital delivery system.
4. Sell digital templates and tools
Digital products can also be intangible tools that equip professionals to do tasks that either fall outside their skillset or take up a lot of time. You can sell digital solutions to a specific audience’s common pain points and needs.
Some examples include:
- Product mockup files for entrepreneurs
- Resume templates for job-seekers
- Software for businesses
- Adobe After Effects plugins for video 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 revenue streams.
5. Sell music or art
If you’re a musician or an artist, chances are you’ve explored ways to monetize your talents or the audience you’re building. While t-shirts or prints are always an option, digital downloads also offer plenty of possibilities.
A musician can sell ringtones of their best songs alongside their merch. Or a cartoonist could turn their art into purchasable phone wallpapers. Since you don’t have to hold any inventory, you can experiment with different formats to see what your audience wants without much risk.
6. Sell your expertise or services
Services tend to pair well with digital products because services are essentially the 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 provide 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 list, a tactic many online businesses employ today.
Suppose there are everyday tasks you complete as part of your service business that is easy for you but valuable to your customer. In that case, you can consider productizing them to create revenue streams requiring less time and effort to maintain.
How to find digital product ideas that sell
While getting stuck waiting for a eureka moment is easy, finding a good business idea is more of a process. It’s great to have an idea that excites you, but if you want a picture 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? For example, if you sell surfboards, you could create a workout program to help your customers stay in surf shape at home.
- Think about the values you’ve built your business on. What are topics related to that? For example, if you sell sustainable apparel, you could create a course teaching your customers how to live more sustainably.
- In what ways could you bring your community of customers together? For example, if you sell kitchen supplies, you could run a virtual guided wine-tasting event.
- What are you good at? For example, if you’re 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 and topics they love or get excited about. Both present tremendous opportunities to provide value through educational development.
Here are some excellent 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 and stand-alone reviews on blogs and other websites.
- Blog posts and comments. Read the blog content your community might be reading and the words to get even more ideas. For example, dig around on automotive blogs if you sell auto parts.
- 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 beneficial insights.
Before committing too much time to an idea, you want to validate it and ensure it is solid before you build it. The last thing you want to do is invest a lot of time or money in a new venture without knowing it will be successful.
There are a couple of ways to validate your idea:
- Keyword research. Use a keyword tool to see how many people search 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 issues 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 concept with room for growth. The goal is to get something out into the world as soon as possible so you can test your idea and improve from there.
No matter your industry, you have unique strengths and knowledge that would be valuable to your customers.
Get creative with your digital products.
Without holding inventory or the overhead of selling physical products, businesses based on digital products can be launched and tested with little risk.
You can create digital products and incorporate them into your business in countless ways. With ingenuity and an upfront investment of time, you can serve up an irresistible value that can more than pay for itself over time.
This article originally appeared in the Shopify blog.