Digital products can’t be held, tasted, or touched, but everyone consumes them—from music to videos, ebooks to online courses, and more.
In recent times, intangible goods have gained immense popularity among entrepreneurs due to their ease of distribution. Many business owners have started creating digital product lines to complement their physical items or services. One of the key benefits of digital products is that they can be created once and sold to multiple customers without the need to replenish inventory. This makes them an ideal source of income for creatives, artists, educators, freelancers, and anyone looking for new income streams that require less effort to maintain.
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.
Digital products have many advantages that make them uniquely attractive to sell:
But digital products also come with specific challenges you’ll need to watch out for:
However, most of these challenges can be overcome if you employ the right tools when designing your digital product business.
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
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.
An Online course 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.
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.
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.
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:
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.
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.
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.
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:
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:
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:
No matter your industry, you have unique strengths and knowledge that would be valuable to your customers.
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.
