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Are you looking for ways to make money while you sleep? Shorten your work hours and to-do list? Earn a passive income with minimal effort and upkeep? Diversify and open up a new revenue stream? 

If the answer is YES to all of the above, then keep reading. The best way to get on the path to financial freedom is through the art of selling digital products – and we are going to tell you exactly why and how to get started. 

Learn exactly how to start your own digital product business from the ground up by following the contents in this guide: 

Related: 13 Profitable Digital Products And Where To Sell Them

What is a digital product? 

Let’s get into it… exactly what is a digital product? 

A digital product is essentially a virtual or intangible – not physical in nature – product that can be sold and purchased through an online marketplace. It is any type of product that is made and distributed to customers in a purely electronic format. 

Just because a digital product lacks a physical form that you can touch, feel, and hold in your hands, this doesn’t make it any less valuable. In fact, there is a huge demand for digital products that is only growing, making them one of the most esteemed assets in the world right now. 

The global e-commerce market is predicted to reach $6.3 trillion in 2024 – up from $5.8 trillion in 2023. If you haven’t already jumped into the e-commerce world, now is the time to do so. Especially with the digital product industry rapidly growing. For example, online education is a type of digital product that is expected to be worth a whopping $840 billion by 2030.

When it comes to digital products, there are endless possibilities for what you can create and how your products are consumed by others. Artists, educators, writers, musicians, and freelancers are particularly drawn to this industry because of the creative freedom it offers – however, anyone (no matter which industry you are in) can create digital products to leverage their business and make money online. 

Digital products encompass a large range of offerings, which we will dive into shortly. First, let’s explore the benefits of digital products and why they are preferable over selling physical products. 

Benefits of selling digital products 

There is a reason why digital products are overtaking the online marketplace – once they are created they can be sold repeatedly to customers for easy purchase and instant download. Selling digital products takes a load off of creators and also gives them more freedom while earning a passive income.

This is why creators have flocked to the digital product market… unlike physical products, which must be constantly recreated and reproduced, digital product creators can focus on fine-tuning the quality of their offerings. 

Of course, it’s not one-or-the-other. If you already have a business selling physical goods, learning how to sell digital products will only help diversify your income.  

Additional benefits of selling digital products include:

  • High profit margins – Due to the low cost of production and ease of distribution, selling digital products incurs no recurring costs down the road. Creators who sell digital products get to pocket the majority of their sales. Plus, you can create a massive boost in your income through automating all of your processes, saving you time and money. 
  • Low overhead costs – Unlike selling physical products, you don’t need to worry about inventory, shipping, or production costs. There is also a low upfront investment for getting your digital product business up and running. 
  • Scalability – Because digital products are only created once then sold as many times as there are buyers, they can be easily scaled to accommodate more traffic to your business. The best part is that you don’t have to redo the work or create another product!
  • Efficiency and automation – Digital products save you time and effort. Without the need to manage packing, shipping, returns, or other processing costs, you have the freedom to allocate your time elsewhere. Orders can also instantly be sent to your customers for download, with no oversight needed on your end. 
  • Upgradability – You can seamlessly tweak or update your digital products so that they remain relevant and useful to your consumers. This can be very simple in comparison to updating physical products, which would require more labour and resources.
  • Flexibility – Selling digital products gives you flexibility in your business and personal life. Since everything is automated, you can focus more on how to drive customers to your business. Your digital products also are flexible themselves, as you can offer things like subscriptions and licenses for access to your content. 

Now that we’ve covered the benefits of selling digital products, let’s go over the most popular digital products on the market. 

Related: How to Build a Personal Brand (Complete Guide)

Types of digital products 

There are a ton of profitable digital products out there – probably more than you can even imagine!

Examples of digital products can range from generalized website templates to more specific niche areas, such as AI generated art. 

We are going to help narrow down some digital product options for you by exploring the 5 most profitable digital product categories out there.

Top 5 categories for trending digital products 

  1. Digital downloads

Selling digital downloads is one of the easiest ways to make money online and break into the digital product marketplace. 

Digital downloads are files that can be downloaded. Creators can sell digital downloads as digital products or leverage them for free (also called lead magnets) to obtain people’s email addresses for sales funneling.  

There are a few different ways that digital downloads can be sold. They can be sold from established platforms like Etsy or Amazon with built-in user bases, so that creators don’t have to expend their efforts towards coding platforms or attracting customers. Digital downloads can also be sold from your own website or from ecommerce platforms, such as Shopify and Thinkific, to have more freedom and avoid a third party taking a cut of your sales. 

Here are some examples of digital downloads:

  • Templates (resume, email, website, copywriting, Excel, Instagram, fonts, themes, presets)
  • Tools (plugins for media editors and UX kits for web designers)
  • PDF files (manuals and guides)
  • Printables (cards, checklists, calendars, stickers, planners, worksheets)
  • Licensed files (images, graphics, illustrations, icons, stock photos, video tutorials, webinar recordings, music, audiobooks, podcasts)

You can turn just about anything into a digital download, so get creative within your niche and find out what your target audience is interested in. 

Free Ultimate Guide to Creating and Selling Digital Products: Download Now

  1. Online courses and ebooks

As we mentioned earlier, online education is projected to reach insane profit margins and growth in the next few years, so now is the time to jump in. 

An online course allows you to monetize your expertise, turning it into a new revenue stream. If you are an expert in your field and have a passion for sharing this knowledge with others, then creating an online course is the digital product for you to sell. You also don’t need to have any prior teaching experience either – just the drive to create a profitable online course. 

The good thing is that there is a HUGE market for online learning, as these days people prefer to learn for the comfort of their homes rather than through traditional in-person lectures. 

Here are some examples of niche online courses: 

  • Sewing 
  • Guitar lessons 
  • Yoga instruction 
  • Photography 
  • Professional development 
  • Course building 
  • Coding 

Make sure to do your market research on your target audience, and create a unique product that adds value to their lives. Within each of these examples, you can get even more specific to ensure that you have a long line of customers knocking on your virtual door to sign up. 

Similar to the concept of course creation, you can also put all of your expertise into an ebook that people can download and learn from.

While creating an online course or an ebook might initially take more time and effort, once it’s done you have this digital product forever. Customers can repeatedly access your course or download your ebook while you sit back and relax!

  1. Mobile applications

Mobile applications are software applications designed for people to use on their smartphones or tablets. These app-based digital products are essentially the same as other software digital products (which are powered by code) that people use on their computers or TVs – just on a smaller platform. 

Here are some examples of apps as digital products: 

  • Games 
  • Meditations
  • Learning tools 
  • Trip planning 
  • Organizational tools 

The sky’s the limit with app development! If you don’t have any experience with app development, don’t worry. You can easily hire someone to take care of the technical and logistical side of things while you handle the creative and business side. 

Like with any kind of digital product, you should think about your niche within the app industry and how you can provide value to your customers. 

  1. Subscription or membership services

If you are looking to serve a community on an ongoing basis, then selling a digital product through a membership or subscription is the way to go. 

This means that your customers pay a monthly or annual fee to use your software, online courses, or private community. As long as they are paying customers, they will be granted access to your digital products. 

For example, a membership site could offer your customers exclusive discussion groups, workshops, and Q&A sessions. When customers subscribe to your digital service, they add to a steady, predictable stream of income for you.

Membership and subscription services can include: 

  • Coaching services 
  • Fitness classes 
  • Business tools 
  • Learning platforms 

These types of digital products help build an exclusive online community where customers receive access to premium content for as long as they like. The key is to provide continuous value to your members that subscribe to your content or services. If you can do this, you’ll gain the attention of prospective customers who feel like they are missing out. 

  1. Software as a service (SaaS)

Software as a service (SaaS) are web-based applications that are in the realm of digital products as they are sold, purchased, and perceived the same way as more traditional forms of digital products. 

However, they are not downloaded, but instead run in a web-browser. SaaS is a great example of a niche digital product category that is rapidly gaining attention.

For example, you may be familiar with the streaming service Netflix. They sell software to watch licensed videos on demand. 

Here are some more digital product examples for SaaS, many of which you probably know and use daily: 

  • Dropbox
  • Spotify 
  • Mailchimp
  • Salesforce
  • New Relic
  • iCloud
  • Asana
  • Coursera

SaaS products typically use a subscription pricing model that involves recurring payments where customers pay a monthly or annual fee for access to the apps or services.

Even if you aren’t a budding software creator, you can still develop a business plan to create a very profitable SaaS digital product – you just might need a little hired help along the way!

Related: How To Monetize Your Expertise

Characteristics of successful digital products

Now that we’ve covered the different types of digital products that you can create along with the benefits of them, let’s get into the specifics on how to design a successful, profitable digital product. 

In order to create a digital product that you’ll be able to profit from until the end of time, you’ll need to make sure your business model has these characteristics: 

  • Product validation – Before you invest a ton of time into your digital product, you’ll want to make sure your target audience will find value in your product and want to purchase it. Look at your competitors and see if they are missing anything that you can add to your product to provide a better user experience for customers. Research product reviews, Google trends, Reddit and Facebook groups, and conduct keyword research to learn about your customers. 
  • Accessibility and scalability – Make sure your digital products are inclusive and accessible to everyone in your niche area. Focusing on an inclusive design shows social responsibility to your customers and will boost your product growth. To scale your digital products, you’ll want to create a compelling sales strategy, optimize your page, and create a content marketing funnel to drive traffic to your digital products. 
  • User experience – Ensure you design your digital product with your customers in mind, or better yet, from the viewpoint of your customers. Factors that maintain positive user experience include mobile responsiveness, intuitive navigation, accessibility, and quality and design consistency. 
  • Regular updates and maintenance – By keeping your digital products relevant and updated, you’ll maintain your current customers while attracting new ones as well. Provide regular maintenance checks to your site and marketing techniques to ensure that they are working efficiently and that you are continuously reeling in new customers. For example, do regular keyword research to check that your digital products are optimized and that they are searchable. 

Related: How to Market Digital Products

How to sell digital products 

Once you’ve found your niche, researched market trends and demand, identified your target audience, and launched and created your digital products, you’re ready to start selling them.

Psst! For a more in-depth explanation, check out our comprehensive guide on how to create digital products.

Creating digital products is just the tip of the iceberg… once you finally have a finished digital product that you’re ready to sell, it’s time to launch, market, and promote your digital product to scale your business and earn a passive income. 

We won’t go into too much detail on how to sell your digital product here, but if you’re interested check out our guide on how to sell digital products for a more thorough overview. 

Here are 4 steps to take when learning how to sell digital products: 

  1. Choose a platform

First, depending on your digital product, you’ll want to choose a platform to sell your digital products. This is where your products will be uploaded and promoted. 

You can choose to sell your products through an existing online marketplace or you can create your own website to sell directly to your customers. 

For example, if you are looking to create and sell online courses and keep all of the revenue for yourself, Thinkific should be the first place you look. Thinkific provides you with the tools you need to create and maintain your digital storefront, and you have complete control over the design of your site. 

If you are selling digital downloads and looking for an existing marketplace, check out our pick of the 11 best online hosting platforms to sell digital products.

  1. Develop a marketing plan

Every business needs a solid marketing plan – this is how you will gain and retain purchasing customers! 

Make sure to create an eye-catching landing page for your digital products and use different social media channels to promote your product. It’s also valuable to start building an email list so that you can leverage new products and contact prospective customers.  

  1. Analyze competitors 

Take a look at other businesses who are successfully selling a version of the digital product you aspire to sell. This will help you identify strengths and weaknesses in your own business. 

Create a pro and con list of things you notice about their business model, as this will help streamline some of your own processes. Analyzing your competitors also gives you key insights to your target audience and potential customers. This will allow you to learn your customer demographics, their interests and wants, and what they are looking for in a digital product. 

  1. Collect feedback and review

It’s essential to ask for customer reviews to help your business grow. If customers aren’t satisfied with your digital product, it’s better to know sooner rather than later so you can make necessary adjustments. This will help you improve your content. 

Some ways to ask for feedback along with reviews include surveys, interviews, and comments. Going over their feedback will help you refine your digital products and eventually become your audience’s most trustworthy resource. 

Related: How to Create Digital Products

Future trends for digital products 

As the demand for digital products increases, we predict that the way digital products are developed will change in order to meet this demand and keep up with evolving trends. 

  1. Integration of Artificial Intelligence (AI) 

AI will most likely be a main component in many digital products, with the goal of improving customer service, automating tasks, and powering market research. For example, many businesses are integrating AI into their digital products to power chatbots, providing customers with a more realistic and relevant solution. 

We will also see more predictive analytics with the use of AI to help reduce errors and increase efficiency. AI is already here and being used by many, but we expect to see digital products fully embrace the help of AI in the future. 

  1. Enhanced Personalization

As we start to see an influx of digital products on the market, many businesses will start to add more options for customization to help their digital products stand out against their competitors. 

User experiences will become more personalized and streamlined. To stay ahead of the game, collect feedback from your customers and think about how you can offer a more custom user experience with your digital products. 

  1. Blockchain Technology Integration

For bigger companies, we expect to see more of a focus on cyber security and supply chain transparency in digital products. Blockchain technology will help with this process, and allow access for everyone involved to see new changes. This integration of blockchain into digital products will also boost and create effective customer loyalty programs. 

Related: How Dietitian Deanna Made $1.2M from Online Courses

Key takeaways 

Are you ready to sell some digital products? 

Now that you’ve learnt about the lucrative industry of digital products and all of the different types of digital products to choose from, it’s time to get started creating and selling your own!

Remember, if you can leverage your expertise, find a niche area, create value, and market your digital products by listening to the needs of your target audience – then you’re all set to start creating. 

Try Thinkific for free today, and use this all-in-one platform to help you create, launch, and sell digital products from scratch. 

Free Interactive Guide to Digital Product Strategy: Download Now


  1. What exactly is a digital product?

A digital product is any product or service that is delivered and consumed electronically through an online marketplace. Some examples include online courses, ebooks, templates, online memberships, and software programs. 

  1. What is the difference between physical products and digital products? 

Digital products are intangible, meaning they hold no physical form and exist purely in digital format. On the other hand, physical products are tangible goods that can be touched and felt.

  1. Can I make money by selling digital products? 

Absolutely! You can monetize your digital products and earn a passive income through providing a valuable product to your target audience and marketing it well. There are various pricing models to consider such as, membership and subscription services, one-time purchases, licenses, and freemium models. 

  1. Are there any risks associated with digital product development?

As with any business, there will always be risks involved. Some risks include cybersecurity threats, piracy and intellectual property infringement, and rapid technological obsolescence. Be mindful of creating a unique digital product and take proper security measures to help mitigate these risks. 

  1. What are some examples of successful digital products?

There are many small business owners who sell their digital products off of Esty, Amazon, or through their own website and make hundreds of thousands of dollars a year. Some larger businesses who have developed successful digital products include Netflix (streaming service), Spotify (music streaming), Canva (graphic design software), and Coursera (online learning platform).

  1. How can I create my own digital product?

If you are determined, creating your own digital product is easier than you may think. Start by developing your expertise and passion, and then identify a gap in the market and your target audience needs, conduct market research, create a marketing strategy, and collect feedback and listen to reviews. 

shows a screenshot of thinkific digital downloads page