10 Profitable Digital Products + How to Sell Them in 2023 [Ultimate Guide]
Last updated: January 11, 2023
Selling digital products can be an incredibly profitable endeavor. Many entrepreneurs build businesses around intangible goods that are easy to distribute and require very little capital to produce. Selling digital products can be a great way to make money online passively, as they often do not require a lot of upkeep or effort to maintain.
This guide will walk you through how to sell digital products online successfully – including a list of profitable digital products examples and how to create your own. Additionally, we’ll provide some tips on how to market your digital products online. With these tools at your disposal, let’s explore the steps required to get your venture off the ground.
Here is a quick link to everything you need to start selling digital products online:
- What is a digital product?
- 8 reasons to sell digital products
- Where to sell digital products online
- How to sell digital products online
- How to market digital products online
- 10 profitable digital product ideas you can create with a small budget
What is a Digital Product?
A digital product is any intangible product that has been created in, or converted to, a digital format. This includes items such as eBooks, online courses, digital art, design assets, music, PDFs, software, and more.
8 Reasons to Sell Digital Products
There are many benefits to starting a business that sells digital products online.
1. Low budget requirement with high profit margins
Digital products have low overhead costs and are typically inexpensive to create. Depending on the digital products you’re selling, typically creating a digital product only requires you to have access to the internet, a computer, and allocate your time and energy into producing the products.
Unlike its physical-product counterpart, there are no warehousing or shipping costs that could cut into your profits. Once you’ve recorded your music, written your ebook, or designed your photo preset, you can sell it countless times to virtually everyone in the entire world, meaning your profit margins can be quite high.
2. No inventory and order fulfillment hassle
One of the greatest barriers to entering the eCommerce space is the cost of manufacturing, storing, and shipping inventory. But none of these is an issue with digital products. You won’t need physical space to store these items, other than the original file, and you’ll never have to worry about ordering or producing enough units to meet demand.
3. Independence from suppliers
The autonomy of a business that sells digital items means you won’t have to rely on suppliers or manufacturers. We’ve learnt from the logistical nightmare that happened during the COVID19 pandemic that a vast number of eCommerce businesses suffered losses and surge in customer support issues as they were at the mercy of the market and its logistical issues.
4. Instant “free” delivery and immediate access
In today’s world, online shoppers often expect fast and free delivery, and with digital products, you can offer those! Using platforms like Payhip, customers can download or have access to their digital products immediately after purchasing them. There are no shipping costs for you or the buyer. Plus, there are no long lines at the post office, no missing packages to track, and no risk of items breaking during shipment (hooray to less customer service headaches).
A very important benefit to this is the fact that you won’t have to be involved in the order fulfillment process because your product is automatically and instantaneously delivered to your customers through the system. This means you can earn money while you’re sleeping and you’ll have more time to focus on growing your business!
5. Low product-return rate
Because they’re downloadable, these products aren’t damaged during delivery, and there’s a very low chance that customers will receive a faulty product. This means an extremely low product-return rate. If an unsatisfied customer does require a return, you can issue it immediately without having to wait for them to ship the product back.
6. Infinite scale
Digital products can be scaled much more quickly than physical ones. Plus, it typically won’t require additional investment, storage space, or staff to upgrade your offerings or expand into additional items.
7. Passive income
Most of us wouldn’t turn down the opportunity for a little extra cash — after all, 45 %of Americans have a side hustle. Selling digital products is a great way to increase your income, because once you create the product, you simply automate the selling process and start bringing in cash.
8. Personal freedom
When your products are digital, you’re not limited by geography or by traditional business hours. You can sell your creations anytime from anywhere and to anywhere in the world.
Where to Sell Digital Products Online
The best way to sell digital products online is to create an online store via an ecommerce site like Payhip. You’ll be able to create a professional online store or website within minutes without any coding or design skills.
Payhip’s eCommerce platform comes with all the tools needed for selling digital products. Whether you’re selling digital downloads, courses, coaching, memberships or physical products, Payhip makes it easy for you to sell online anywhere.
Payhip offers the best value and affordability because all of its amazing features are available on the forever free plan. If you’re just starting out, choose Payhip’s forever free plan, where you’ll only pay 5% when you make a sale, i.e. if you don’t make a sale, you don’t pay anything (and will still be able to keep your online store actively running). Major win!
When you sell digital products on Etsy, you have the advantage of reaching a large and diverse audience. Etsy is a marketplace with over 50 million users, which means your products have the potential to be seen by a lot of people. Additionally, because Etsy is a curated site, users are more likely to be interested in the products you’re selling. This means that you’re not only reaching a large audience, but you’re also reaching an audience that is likely to be interested in what you’re selling.
Having said that, bear in mind that selling on online marketplaces comes with several drawbacks including lack of control, lower profit margin, and more.
3. Creative Market
While Etsy is an online marketplace that covers a wide range of niches, Creative Market is an online marketplace that focuses more on design assets. This is great for artists who are looking to sell their digital products online.
However, as mentioned above, selling on online marketplaces comes with several drawbacks. Commission fee on Creative Market is even higher than Etsy (i.e. less profit going into your pocket). Your order sales are at the mercy of the online marketplaces’ algorithm, which often changes from time to time.
How to Sell Digital Products Online
1. Brainstorm Digital Product Ideas
‘Digital products’ is a broad term. It covers eBooks, video tutorials, patterns, online memberships, tools and templates. Anything that exists in a digital format and that somebody might want to buy is a digital product that can be sold online.
So your first step should be to think as broadly as possible about what you could create that would have value for somebody else. To help you with this step, ask yourself these questions:
- Do I have a particular skill or knowledge that people want to acquire?
- Have I helped other people in my life solve specific life problems? Can I replicate that with other people?
- Have I experienced any life transformations in my own life? Is that something that other people would want to experience too?
- Do I own unique skills that other people would pay for to enjoy my talents? (This particularly applies for artists who are able to gather a loyal audience who loves their art forms)
Avoid overthinking at this stage, focus on dumping as many ideas as possible on a piece of paper or a blank document.
2. Validate the Idea
If you’re going to the trouble of creating a digital product you want to be as sure as possible that there’s a market for it. Here are a few ways to get started on doing research for your winning digital product idea:
- Keyword Research. Google Trends and the Google Keyword Planner tool will give you a good idea of what people are searching for and which topics are hot trends. The Keyword Planner tool is part of Google Ads. This will tell you how much competition there is for each search term. You don’t necessarily have to choose the most popular topics. But you do want to check that there’s enough interest to make it worth the effort. The ideal scenario is a topic with loads of searches and not much competition from other creators. Trending topics will also help you refine your idea and target a profitable niche. Value comes from selling digital products online that answer specific questions and solve real and pressing problems.
- Be part of the community. Join Facebook groups, subreddits, and other online communities where you can really interact with your target audience. Don’t be afraid to ask questions to find out more about their pain points and how you can create something that caters to them.
- Research your competitors. See if there are any other creators who have made similar content to what you’re thinking of creating. Don’t be frazzled by other creators who might have targeted the same audience as you, if they’re doing well, that just means that there is a market demand for those topics! Be confident in your ability to create something unique that caters to a similar group of audience.
3. Create Your Product
Your first product is usually the hardest. You’re not only learning the ropes of how to sell digital products online, you’re also working without an income stream from existing products. There’s no harm in looking at other successful online creators for inspiration – but remember to do it your way. Be original and authentic.
Digital products are diverse. So creators use a vast array of tools including Canva, Photoshop, Lightroom, Scrivener, PowerPoint… The list seems ever expanding.
While every tool has its own file management system it can sometimes be easier to organize your work using GDrive. This is free to anyone with a Google account and the chances are you’re already using it. It’s also a really easy tool for creating PDFs. You can upload just about any file format with the confidence of knowing that everything is safely stored in the cloud.
4. Create an Online Store and Upload Your Digital Products
Now it’s time to create an online store from which you can sell on! Choosing the right eCommerce platform is crucial because you need to select a platform with built-in features specifically for digital products.
If you’re selling eBooks, then you need a platform that can instantly deliver the eBook to your customers as soon as they purchase it. If you’re selling online courses, you need a platform that provides a built-in engaging course player for your students. Do NOT even think about manually sending these digital products to your customers via email, that’s a sure way to bring unnecessary headache into your business.
Thankfully, platforms like Payhip are completely free to use and are fully equipped with everything you need to sell various types of digital products including downloadables (e.g. eBooks, digital art, etc), online courses, coaching services, memberships/subscriptions, and physical products.
Join over 130,000 sellers who have launched their online businesses with Payhip
For a more detailed guide on how to create an online store with Payhip, see these guides below:
- Guide to sell digital downloads online for free
- Guide to sell online courses for free
- Guide to become an online coach / provide coaching services
- Guide to set up memberships or subscriptions site for free
- Guide to sell physical products for free (to complement your digital products)
Once you’ve uploaded your product listings, don’t forget to set the appropriate selling prices for your digital products. Your research will have given you a good idea about the right selling price. As a newcomer you might not be able to charge top whack prices. But don’t sell yourself short either – particularly if you have a great digital product and not much competition. And don’t forget, there’s also a ‘pay what you want’ option where you set a minimum price and allow people to pay more if they want to help somebody venturing into the creator economy for the first time.
Lastly, put some measures in place to ensure that your digital products are protected against piracy. Payhip provides various free tools that you can use to protect your digital products such as PDF stamping, download limits, and more.
Payhip takes all of the effort and complication out of getting paid when you sell digital products online.
Best of all, if you have any questions about how to get started you can call the Payhip team and talk to a real person who will help you. Try Payhip for free and see for yourself how easy it is.
How to Market Digital Products Online
When your online store and product listings are ready, you’re all set to start selling online. Now you just need to tell the world that you’re open for business! Here are a few ways to get started.
1. Promote on social media
Get social. Content creators must be active online to build community and share their products with potential buyers. In fact, more than 80% of shoppers have found an item they were interested in on social media, which is up from 58% in 2017, according to Curalate research.
“Marketing for me is mostly through social media,” says Lea, who sells quilting patterns. “Quilters are such visual people that Instagram is a feast for the eyes. It’s a great way to find new patterns, designers, quilters and inspiration.”
And Melissa Raimondi of Raw Food Romance relies almost entirely on social networks to promote her offerings. “I market my books with Instagram, YouTube, Facebook. and other social media platforms. I have a fairly large following of 50k on Instagram and 47k on YouTube. They are growing steadily from 500-2000 new people a month, so I find there are always new people who are interested in the recipes that I have to offer. I share images and stories about my recipes, and people get excited and curious and they want to try them.”
2. Obtain social proof
Social proof includes product reviews, customer testimonials, referrals, and more, and it’s a powerful way to build trust among consumers and persuade them to click “buy”. In fact, 92% of consumers trust recommendations more than other types of advertising, and 87% of them trust product reviews as much as reviews from friends.
This is particularly important for digital products, because while there are similarities in marketing physical and digital items, there are also some key differences. For instance, customers can’t pick up your product and test it out for themselves, so it’s important to integrate social proof where you can. Encourage customers to post reviews or ask repeat buyers if they’d be willing to write a testimonial for your site.
3. Partner up
It’s easy to find a community around your particular products. Whether you sell sewing patterns or printable day-planner pages, you’ll no doubt find groups of people who blog about their hobby, post about it on social media, or discuss it on forums.
So get active and make connections with the players in your industry. Contact bloggers about reviewing your products, or team up with a fellow seller or Instagram user to do a joint giveaway or promotion.
4. Start an affiliate program
You can launch your own affiliate program for free using Payhip’s affiliate marketing tool. Affiliates can be a great way to drive traffic and sales for creators selling digital products. Find established and trusted influencers in your industry, and offer them a commission for each sale they make. You can create different percentages for different affiliates, so if someone has a massive audience, you can give them a higher commission rate to promote more and attract customers.
10 Profitable Digital Products to Sell Online with a Small Budget
If you’re an excellent writer with a big idea to share, convert your skill into cash by selling eBooks online. Ebooks are digital publications. Their content can range from marketing pieces and thought leadership for your company to personal narratives to novels.
With the multitude of self-publishing tools available today, anyone can share their ideas and expertise and become an author. And there’s serious profits to be made in the ebook business. In fact, eBook sales revenue is $1.1 billion annually, and half of those sales come from self-published authors.
Author Joanna Penn, pictured above, has even turned her writing into a full-time pursuit, and she uses Payhip as one of the avenues to sell her variety of fiction and nonfiction titles.
But no matter what kind of book you write, there are several steps to creating a high-quality ebook that people will want to buy and read. Check out our guide to writing an ebook, and learn how to convert your readers into longtime customers.
Ebooks are relatively inexpensive to produce. Creators don’t need pricey tools or software to create their products—they simply need to write well and be able to convert their work into a downloadable (usually PDF) file. Consequently, the cost of many eBooks is little more than the author’s time.
Most authors price their eBooks between $2.99 and $9.99. With the right ebook pricing and a large audience, these are good margins that can help you make money quickly. Indeed, eBook sales revenue is $1.02 billion annually.
Tips for eBook creators:
- Think twice before publishing on Amazon. The company is very well-known, yes, but it will also claim a huge percent of your royalties. If you choose to sell your book directly from your own website, you retain full control of the process—and the profits.
- Maximize your profits by creating a series of eBooks. Serializing your content is a great way to generate recurring revenue and engage your audience.
- Once you’ve launched your eBook, make sure you have a comprehensive marketing strategy to optimize revenue. Be sure your readers can find (and buy) your book!
- Set up a book funnel: an effective marketing strategy for authors that generates leads, or potential customers.
Whether you’re recording your own hit single or making royalty-free music for other creators, you can sell your MP3s online.
Instead of uploading your music to YouTube and allowing listeners to access it for free, sell it online and make money from your talent.
What it is: Files—often MP3 or wav format—created either for fans of your music or for other creators looking for royalty-free music to include in their A/V projects.
Why sell it: A huge market exists for digitally downloaded music; digital music revenue is projected to reach $7.62bn by 2027. Both pleasure listeners looking for new favorites and content creators seeking royalty-free tracks are constantly on the hunt for new tunes.
If you’re a talented musician, you have a range of product options at your fingertips. You can sell sound clips, loops, or full songs for a variety of buyers at a range of prices. If you want to share your music with the world, you should profit from your passion.
Tips for music creators:
- Sell your music on your own site. Third-party vendors will claim a sizable percentage of your sales. iTunes, for example, takes around 30% of sales, which can hamper your growth potential.
- Determine your optimal pricing strategy by conducting market research. Will you charge for each individual download? By monthly subscription? Understanding your customers and their purchasing patterns will help you select the best approach.
3. Online Courses
Monetize your experience and expertise by creating online courses for purchase. Courses can be created with video, through text, or with learning platforms, and there’s no limit to what you can educate customers about.
Why sell them: More than perhaps any other industry, the COVID-19 pandemic has made an incredible impact on the education sector. eLearning, which was already growing in popularity, is here to stay.
This presents a lucrative opportunity for instructors, particularly as the global online education market is projected to be worth $319+ billion by 2025. With current opportunities to gather and learn in-person becoming increasingly rare, both students and hobbyists are interested in expanding their horizons with eLearning opportunities. What’s more, you have infinite possibilities for the content of your course.
Tips for course creators:
- Bundle your course with other downloadable assets (like an eBook, for example) for more revenue-generating opportunities.
- Course prices are widely variable. Be cognizant of how much time you’ve invested in creating the course, and price it accordingly.
4. Social Media Presets
Though in-person meetings and travel have slowed in recent months, people all around the world are still using social media to connect with one another. If you have a knack for design, sell your social media presets to content creators to make money quickly.
What they are: Graphic designers and artists can use Adobe’s Lightroom to create pre-made filters (“presets”) that influencers, photographers, and filmmakers can use in their work and on social media.
Why sell them: Demand for high-quality social media imagery continues to grow. A Harris Poll from this past spring reported that between 46% and 51% of US adults had increased their social media use since the start of the pandemic. While social media influencers in industries such as travel and fashion took an initial hit, business has boomed for influencers in the healthcare, food, and fitness industries. They need high-quality, attractive presets so they can maintain their social media output.
Alternatively, if you’re an influencer looking to diversify your sources of revenue, you could sell presets you’ve already created and that you already use.
Tips for preset creators:
- Organize your presets into themed bundles so users don’t have to sift through each individual filter before they click “Add to cart.”
- Price your presets appropriately for your target customers. Some will be willing to spend over $100 for a bundle of presets, while others will only have a few dollars to spare.
- Sell your presets on your own website. If you sell them on a marketplace like Etsy or Adobe Add-ons, you’ll be subject to terms that can change quickly.
Turn your talent for photography into a lucrative side hustle by selling your photos as digital downloads.
What it is: Fine art or royalty-free photography for purchase by art enthusiasts or marketers and content creators.
Why sell it: A huge market exists for both fine art and commercial photography. The global digital photography market is projected to reach $58.41 billion by 2030. If you’re a talented photographer, you can seize some of that sum.
Modern marketing departments, web designers, and content creators are always seeking high-quality, non-stock photos. If you already have a high-end camera and some talent, you can make money easily without spending an additional dollar. A single stock photo costs, on average, between $1 and $15. If you can generate enough downloads, you can realize healthy margins.
Tips for photographers:
- Price your photos appropriately based on the quality and differentiation of your work. Buyers are willing to pay more for higher-quality photos.
- Determine your optimal pricing strategy by conducting market research. Will you charge for each individual download? By monthly subscription? Understanding your customers and their purchasing patterns will help you select the best approach.
Quilters, knitters, and other creatives are often on the lookout for original designs they can’t find anywhere else, so it’s no surprise these digital products have taken off.
And with the community aspect of this niche, socializing with fellow crafters is not only essential to a seller’s success but also part of the fun for both creators and customers.”Sewists now want connection,” writes Abby Glassenberg, who teaches sewing and sells her own patterns. “They want to know the pattern designer and feel connected with her company, and with her as a person.”
7. Lightroom Presets
Photographers, videographers, and social media influencers often rely on presets for Adobe Lightroom to save time and give their creations a consistent look. And fellow content creators can purchase these presets to emulate the look of their favorite pics and create their own content faster.
Here’s how to get started selling Lightroom presets.
Any item you print out — such as calendars, meal plans, worksheets, day planners, and coloring pages — can be sold as a digital product. Payhip seller Pen to Publish has even created a career out of selling printables and coaching people how they can do the same.
Check out our guide selling printables.
9. Design Assets
There are tons of design assets that you can sell as a downloadable including graphics, fonts, templates, brushes, color palette, 3D models, and many more.
You can also sell memberships, which give subscribers regular access to new content — no matter what you create! If you’re an online course creator, consider selling memberships so that your students can subscribe to your upcoming content and continue to get mentorship from you outside of your course.
Final Thoughts – Make a living selling digital products
Some sellers of digital products get started to indulge a passion, while others are looking for a side hustle to bring in extra income. Regardless of your reasons, launching your own online business has the potential to become a full-time job.
There are countless ways you can create the best digital content to create a profitable online business. When you combine a little ingenuity with an upfront investment of time and effort, you can create irresistible digital products that pay for themselves in no time. When you’re ready to get started sign up for a free account on Payhip— it takes less than 5 minutes to get set up, no payment info required.
If you’re keen to learn more about selling digital products, check out these additional resources: