A guide on why selling digital products is a great way to make passive income.
Buying a rental property, or investing in stocks or bonds used to be the way to make passive income.
But that way only worked for a specific group of people with extra money on the side to invest.
Finally! We are at a time when everyone has the opportunity to create a side hustle business with the possibility of making passive income.
Welcome to the age of offering digital products to sell online, all from the comforts of your home.
We are in a time that is at a perfect intersection of helping people solve their problems with cloud-based technology that delivers the solution straight to their inbox, instantly.
In this post, I will help guide you on what is a digital product, ideas for different types of digital downloads, and how to make passive income selling a digital product online.
What is a Digital Product?
A product sold online that does not take physical form at the time of the sales transaction. The product is sold as a downloadable file, that could later turn into a physical form when printed out by the customer.
Examples: printing a book, manual, recipe, or artwork
Why Digital Products are Perfect for Making Passive Income
What does it mean to have passive income? An additional source of income that requires little to zero upkeep, after the initial set up is complete.
Publishing a digital product online is an opportunity for a sale 24/7, without disrupting your everyday life.
But to successfully create passive income selling a digital downloads, it will require a lot of research and work upfront.
The product must effectively solve a need or problem and produced high-quality standards. Making it super easy for customers to recommend it to others. I go deeper into this subject in a little bit…
Why Sell Digital Products vs. Physical Products Online?
When you sell a digital product, you are basically selling your skill, knowledge, and talent. The major upfront cost is your time, and depending on what you are offering- the cost of supplies to help with the execution.
As long as you offer a good solution to a need or problem, there will always be an audience of potential customers. And the beauty of selling a digital product online is the low maintenance after it is published.
Here are some more winning points on why digital products outweigh selling a physical products:
- Low start-up cost- You will not need funds to replenish inventory or supplies.
- Convenience- You can create your digital product in the comforts of your home and at your schedule.
- High-profit margins- After recouping the initial cost of creating the digital product, the proceeding sales will continue to raise profitability.
- No space or storage required- There isn't a need to rent out space or take up room in your home.
- Enhance your service- If you are in a service-based business, like a personal fitness trainer or executive business coach, then offering a digital product is a perfect option to enhance your service. Create digital guides or planners for your customers to use and follow when you are not with them.
- Growing trend- In 2019, the e-learning industry grew to $200 Billion and is projected to reach $326 Billion by 2026. This statistic is only for the e-learning and the digital course industry.
- 60% of internet users preferred online learning because of the convenience and flexibility it offered them.
Ideas of Digital Products to Sell Online
- E-courses
- E-books
- Guides
- Planners
- Recipes
- Digital art (prints, patterns, illustrations)
- Graphic design (fonts, logos..)
- Photos (stock photos for content, wall prints)
- Video Tutorials (cooking, workouts, how to…)
- Computer programs (plugins, website designs, apps)
Pro Tip: Select a digital product that you feel comfortable executing. If you are a graphic artist but do not want to sell your images online, think about teaching an e-course. Or if you are a writer that is in between publishing a book, why not try writing a guide for aspiring writers? It’s important you select a product that you will feel comfortable and proud to sell.
Where to Create and Sell your Digital Products
There are several options you could take to sell your digital assets online.
- Your website - If you own a website there are WordPress plugins or apps that support the downloading and sales transaction.
- All in one platform - This is a great option if you do not own a website or looking for a platform that will take care of everything. From hosting, website development, content creation, marketing, and sales. Example: Teachable
- Third-party marketplaces - Leverage the site's customer traffic and search engine capabilities. Just like Google’s search engine feature, your product could come up through organic and paid search results. Example: Etsy
You can sell on one or two of these options. It will all depend on how much time you want to spend setting up each option properly and how much time you will dedicate to maintaining it in the future.
Here is a list of online platforms that support the sale of different types of digital products
For E-courses and tutorials:
1. Teachable- An all-in-one platform for publishing e-courses. The monthly fees vary depending on the contributor plan you select. Plus an additional 5% transaction fee for every course you sell.
2. Skillshare- A marketplace platform for e-courses or step by step guides taught by “teachers” (but you do not have to be an actual teacher). The payout is based on how many minutes a premium student watches your video.
3. Udemy- A marketplace for e-learning courses that generate traffic from over 35 million users. You have the option of offering your course through Udemy’s marketplace, or you can promote it on your own. Just note, 50% of the sale goes to Udemy if the student found your course on the marketplace. If the student downloaded the course directly from you, you keep 97% of the sale!
For Downloadable PDFs (Guides, Planners, Manuals):
- Shopify + Digital Download app- Shopify is one of the largest all-in-one e-commerce platforms that offer a full range of features and tools to create an e-commerce store. With a Shopify website, you can offer both digital and physical products to sell online. To offer digital downloads, there is a separate app that needs to be installed.
- Selz - Is an all-in-one e-commerce platform designed for small businesses or solopreneurs who are interested in selling only digital products. If you want to offer a large variety of digital and physical items to sell, this is not the option for you. Refer to above. Selz also offers a plugin version for WordPress websites.
For Digital Artwork and Graphic Designs (fonts, templates, prints):
For Photos and Videos:
For monthly subscriptions:
Platforms Not Mentioned: Not listed is Instagram Shop or Facebook. Currently, their commerce policy only allows physical items to sold on their platforms (for now). You can promote your digital product in posts, stories, and reelz. Make sure to add the link to your product page in the bio of your Instagram page.
What Makes a Digital Product Successful?
1. Affective content that truly solves the customer's problem. You are not selling the product but rather the solution.
2. High-quality content that delights and surpasses a customer’s expectations.
3. Mindful of the user experience. From selecting the best images that depict the product, to the helpful product description, and all the way to the clear instructions of how to download the product. Each step of the customer experience is handled with thought and care.
4. Authenticity is the key when writing your bio or filming your courses. The transaction may be all digital, but creating a human connection will help you build customer appreciation and loyalty.
5. Shareable opportunities for the customer to rate, comment, or share their purchase with others online. Use customer reviews as leverage for new customers.
