Adigital product that sells while you sleep is the ultimate dream, but you might be wondering how to create digital products in the first place.
What makes a great digital product, and how can you set yourself up for success?
Let’s take a look at why digital products are worth exploring and how you can start using them to follow through on your online business ideas.
What are digital products?
A digital product is any product that a customer can purchase and use online. In many cases, this includes some form of content, such as a newsletter, podcast, video, ebook, or course.
Most digital products are either entertainment (such as music or a storybook) or educational (such as a course or instructional ebook).
You may have heard plenty of people say that digital products don’t sell online anymore and that most consumers expect to receive their content for free. (We all know uploading an ebook to your website won’t automatically make it sell.)
However, the digital commerce industry is filled with multi-million dollar businesses that sell purely digital products.
Why create digital products?
If you’re considering selling a product or service, a digital product may be the best option for a few different reasons.
Scalability
The first benefit of digital products is that you can reach a much larger audience without working any harder or accumulating more cost.
For example, if you want to help people cook healthier meals, you can offer cooking classes, but you’ll be limited to serving the people in your town.
Additionally, if you want to grow this business, you would have to hire more chefs and pay for more equipment and kitchen space.
However, an alternative option is to learn how to create digital products. You could write an ebook with your favorite recipes, sell it online, reach an unlimited number of people, and you’ll never have to increase your output.
Passive income
Another reason why digital products are excellent is that they require very little effort after the launch and will continue to help you make a living online.
With a service business, you only make money for hours you’re working. With an ecommerce business, people may send orders at any hour of the day, but you still have to fulfill them and keep the items stocked.
However, digital products can be purchased at any hour of the day and never have to be re-stocked. Therefore, it’s the ultimate business model for passive income.
Low startup cost
Finally, most businesses involve startup costs and overhead that can easily run a person into debt. Most people want to learn how to create digital products to avoid that headache.
For example, if you have an ecommerce business, you may have to purchase some of your products upfront. Therefore, you will have to pay for not only the products, but also the storage space.
Service businesses also typically have ongoing costs. For example, if you’re a personal trainer, you may have to pay to rent gym space, deducting from your profit.
With a digital product, you only have to pay for your website and any marketing costs (which are also costs you would pay if you had an ecommerce or service business).
Examples of profitable digital products
So, what kind of digital product should you sell?
In general, most digital products are educational (teaching people how to do something) or entertainment. Once you select a topic and know what you want to sell, you can use a few different models to deliver the content.
Here are the most common ones:
- Podcast (Joe Rogan – $30 million before Spotify deal)
- Ebook (Carol Tice $45,000)
- Online Course ($1 billion)
- Newsletter (The Hustle – $27 million)
- Subscription Content (Bloomberg, New York Times)
- Premium Video (Netflix – $30 billion)
While some of these forms of content are typically free, many people are willing to pay for them if what you offer is significantly higher quality or exclusive.
For example, there are plenty of free newsletters available, yet many people are willing to pay for premium newsletters.