What do ebooks, graphic design software, and online courses have in common? They’re all digital products.
These products aren’t tangible, but they play a role in our daily lives and are no less valuable than physical products.
Because digital products are so ubiquitous, selling them can be profitable for your business. Doing so comes with some unique benefits like low overhead costs and not having to worry about storing inventory. These advantages make selling digital products a good option for artists, educators, writers, freelancers, and more.
How can your business sell digital products? In this blog post, we’ll cover the following:
What is a digital product?
A digital product is a non-physical, non-tangible product. While you may not be able to hold it, it’s still a product that you can use, purchase, or consume. Examples of digital products include music and TV streaming subscriptions, software, downloadable templates, and online courses.
There are a number of reasons why selling digital products is advantageous for businesses. In the section below, we highlight the top benefits.
Why sell digital products?
No Inventory to Store
Inventory storage can be expensive and cumbersome, with facility costs, risk mitigation costs, taxes, and obsolescence costs, to name a few. Warehouse space costs an average of $7.96 per square foot.
By selling digital products, you can lessen or eliminate the need to store goods, saving money on renting storage space. Without inventory to store, you can also avoid the additional costs of buying packaging and mailing products.
Flexibility in Fixing or Adjusting a Product or Service
Should a customer have an issue with a digital product, addressing their issue could be easier than addressing problems with a physical product. A physical product that doesn’t meet a customer’s needs could result in returns, recalls, or redistribution costs.
Low Startup and Overhead Costs
Selling digital products doesn’t come with the startup costs associated with selling physical products. These costs include storage, labor, and shipping. Oftentimes, you can start selling on ecommerce platforms for free, with upgrades available. The main investment is your time.
Flexibility in Choosing and Launching Products
Selling digital products offers far higher flexibility than selling physical products. If you want to launch a new product, the process is far easier and the possibilities are endless. For example, let’s say you have a print magazine. You can also launch a newsletter subscription for your magazine so readers can stay up to date.
Digital Products Can Create New Revenue Streams
If your business sells physical products, selling digital products is a relatively easy way to add another revenue stream. Digital products can complement physical products — for example, an artist who sells ceramics can create an educational podcast about their practice.
Brands that already have a successful digital product can expand their digital products as their audiences grow. For example, HubSpot started as a CRM but has since expanded digital product offerings.
While selling digital products can seem like an intimidating task, it doesn’t need to be. You can get started with the four easy steps below.
How to Sell Digital Products
1. Brainstorm potential digital products
Decide what kind of digital products you want to sell and determine what your offerings will be. Creating a preliminary product catalog will help you organize your offerings and ideas.
Once you’ve made a list, begin to narrow it down to a lead product and a few other backups. Then, you can use market research (which we cover below) to give some early validation to your product choice.
Most product developers or business owners that find success start with these strategies:
- Considering the pain points or opportunities within the industry their current business is within, and what digital products could solve for.
- If they already own a business or are in product development for their business, what are digital products or services that could solve the pain points or fill the gaps that their customers or audiences consistently face?
2. Conduct market research
Validate your product ideas by conducting market research, which will help you determine what to sell. You can gather information through surveys, focus groups, and interviews.
While market research sounds like a daunting, expensive, or time-consuming task, many strategies — like using social listening tools to scour public social media commentary, or sending out a survey you made for free to connections in your industry — don’t have to be pricey but could help you recognize product opportunities that will yield major ROI.
3. Identify Your Target Audience and Buyer Personas
It is integral to figure out who you’re marketing your digital products to. As your conduct, market research, gather the insights to determine your target audiences and buyer personas (shown in the image below).
Create a buyer persona using HubSpot’s free tool.
Target audience: A target audience is a group of customers defined by characteristics and demographics. Determining your target audience is a key pillar that influences a business’ decision-making.
Buyer personas: A buyer persona is a detailed, semi-fictional representation of your target customer that is informed by qualitative and quantitative data about existing customers and market research.
Getting started with figuring out your target audience and constructing a buyer persona can seem daunting, but these questions can serve as a starting point:
- How many buyer personas and target audiences should I start with?
- What will identifying the target audience or buyer persona help me with?
By answering these questions, you will gain a clearer idea of who you’re going to engage with.
4. Create a marketing plan
As you build out your site and online store, you’ll need to figure out how you want to market your digital product. Think about what channels of promotion you will utilize: social media, website, and newsletters, for example. Before you release your product, it would be advantageous to gain a following and launch campaigns promoting the product.
How can you grow traffic and convert visitors? You will also need to figure out what marketing tools to add to your arsenal, like email marketing and landing pages.
Tools like Hubspot’s Marketing Hub can help organize your marketing efforts.
5. Determine your sales plan
In addition to figuring out your marketing plan, a sales plan will help you gain valuable insights about your prospects and gain more customers. As your business expands, automation will be essential for saving you time — products like HubSpot’s Sales Hub can help your business grow.
6. Launch an online store
In the digital world, you need some sort of site or marketplace page that serves as the central hub for your digital products and business. Not only will you use this to sell products, but you can also use it to gain brand awareness from those who find you on search or other online channels.
Many of these marketplaces already have an audience since people go to Etsy to search for products. You can also build your store front and product listings around easy-to-use templates.
Ultimately, you’ll eventually want to consider expanding to your own website. Luckily, 2023 technology has made it easy for less tech-savvy people to build websites with purchasing pages included.
For example, setting up an online store is easy when using tools like HubSpot’s free CMS. With pre-designed but easy-to-customize templates (for page formats like landing pages, homepages, purchasing pages, or blog posts), you can build a fully operational website from scratch with zero coding knowledge.
By having your own online store or a website with purchasing pages, you’ll have great flexibility in customizing branding, messaging, and how you sell your product.
10 Best Digital Products to Sell
Learning is a lifelong process and digital courses show no sign of slowing down. In fact, revenue in online education is projected to reach $166.60 billion in 2023. Online courses can span a wide range of topics: coding, cooking, finance, language learning, web design, and more. They can be for anyone, from high school students to professionals.
If you are an expert on a particular topic, selling online courses is a great way to share your knowledge with others. These courses can take the form of a video series, text-based learning, interactive material, or a combination of them all.
For example, Sur La Table offers a wide range of cooking courses.
Ebooks are electronic books that can be read from a computer, smartphone, or handheld device like ereader. They are widely favored by readers — the ebooks market is projected to reach ereader market is projected to reach $14.21 billion by 2023. Ebooks are favored for their convenience.
Readers can access multiple books from one device at any time, whether they are at home or traveling. The portability makes ebooks an attractive option for traveling — rather than lugging books on the road, readers can access however many books they want with an ereader.
You do not need to be an established author to publish an ebook. There are plenty of ebook genres to delve into — educational topics do particularly well. Ebooks don’t have to be lengthy, either. How-to-guides, short stories, and blueprints are all examples of shorter ebooks.
Creating resumes, cover letters, business cards, presentations, and more is much simpler with a template. Rather than starting from scratch, people can save time with professional looking, customizable, and reusable templates. Designers can also create brand kits for people to download.
There are endless topics and formats you can explore with podcasts. Whatever you choose to explore for your podcast, there will likely be an audience. According to Statista, there are 464.7 million global podcast listeners as of February 2023.
Subscriptions are a great way to offer your audience exclusive offerings and content. A newsletter subscription like Substack lets writers deliver content to their subscribers. For example, Garbage Day is a Substack newsletter dissecting web culture by journalist Ryan Broderick. On Patreon, subscribers can access exclusive perks from their favorite artists.
There is an array of services people seek out: graphic design, web design, copywriting, translators, social media managers, legal advice, and more. These can be considered productized services, which are services that are sold as if they were products.
For example, a product would be buying a template for a business card, but a productized service is paying a graphic designer for a business card they design for you.
By offering services depending on your skill, you can grow a business.
There were 255 billion global mobile app downloads in 2022. Given the proliferation of mobile apps, creating one can be fruitful for your business. A lot of businesses are app-based: fitness, language learning, and task management, for example. When developing a mobile app, you will need to allot time for designing, building, and testing.
From original artwork to patterns to vectors to photography, artists can sell their work digitally. Patterns like sewing patterns or vector patterns for graphic design or web elements can be downloaded, enabling people to create works of art or designs. Though photography can be a crowded market, it will always be in demand for bloggers and website managers.
Music and Audio
There’s a wide range of music and audio you can sell: recorded lectures, audiobooks, lessons, and more. Of course, streaming is also an option — however, keep in mind that it can be difficult to make money on streaming services when most pay less than a cent per stream.
Selling software like plugins, themes, and web-based apps (SaaS) might require a more technical skill set than other items on this list, but the payoff can be great. Website plugins for WordPress and other CMS (content management systems) can really increase website functionality and elevate user experience. Themes enable people to better personalize their website for their brand.
Get Started With Selling Digital Products
As outlined above, selling digital products offers unique advantages. There is no shortage of options for digital products you can sell, but thinking intentionally about your offerings can help you narrow it down. Learn more about some tools that can help you with your business.