Understanding digital products

A Gartner survey conducted at the end of 2020 revealed that demand for new digital products, digital content, and digital services had increased by 83% during the first year of the pandemic. The digital product market has only expanded since then, and it won’t be slowing down anytime soon.

This comprehensive guide delves deep into the world of digital products, explaining the different types of digital products and offering insights into effective strategies for creating and selling them.

Whether you're a seasoned business owner or a budding entrepreneur, understanding the intricacies of digital products can be a great first step to generating new passive income streams.

What is a digital product?

A digital product is any product that exists in a digital form rather than a physical one. This broad category encompasses a diverse range of items, from downloadable software and digital art to online courses and mobile apps. The digital nature of these products facilitates easy delivery and accessibility over the internet while providing many creative possibilities.

If you currently sell a physical product, you can easily turn it into a digital one to increase sales and profitability. For example, you can turn paper goods like bespoke invitations and planners into printable digital forms for people to download and customize at home.

Benefits of digital products

A primary benefit of digital products is that they have a higher profit margin than physical ones — since you can sell an infinite number of copies without incurring additional production costs, leading to a higher profit margin. This scalability allows businesses to generate passive income, a key factor in establishing a sustainable and resilient business model.

Cost savings

Compared with traditional physical products, the production and distribution costs of digital goods are significantly lower. There are no manufacturing, packaging, or shipping expenses, and these low overhead costs are especially advantageous for small businesses and individuals looking to establish a robust online presence without the financial constraints associated with physical products.

Increased efficiency

Digital products are typically much easier to create and deliver than physical products. Automation increases efficiency and allows businesses to focus on core activities. And this increased efficiency translates to faster turnaround times and the ability to adapt quickly to market demands.

Improved customer experience

Digital products often provide a seamless and instant customer experience. With digital product delivery service, customers can access their purchases immediately after payment, eliminating the wait associated with physical shipments.

High-tech B2B companies and content creators have reported a 10% to 20% cost reduction as a result of transforming their customer experience processes. Customers don’t have to wait for their products, sellers don’t have to wait to be paid, and little money is lost in between.

The environment

Selling a digital item is more sustainable than selling a physical one, for several reasons. One significant reason is the elimination of the physical waste and resource consumption associated with the production, packaging, and transportation of traditional physical goods. Trucks don’t have to use gas to cart the goods around because they’re delivered via email or download.

Additionally, the lifespan of digital products is virtually infinite, as they do not degrade (and if they go out of style, you can just update them!). This reduces the need for customers to replace their goods with more goods — fewer goods equals less manufacturing, which equals less pollution!

Examples of popular digital products

The world of digital products is vast and diverse, offering opportunities in many industries. Here are some examples of the best digital products that SendOwl users regularly sell:

• Online courses: interactive and educational content delivered digitally, catering to a growing demand for continuous learning across various niches — an online course can be about anything.
• Ebooks: digital books that can be downloaded and read on various devices, providing a convenient and portable reading experience.
• Digital art: digital media created and distributed online, allowing artists to reach a global audience without the constraints of a physical medium.
• Graphic design templates: pre-designed templates for various purposes, catering to businesses and individuals seeking professional and customizable designs.
• Video content: streaming videos, tutorials, and entertainment content, capitalizing on the increasing consumption of video content across online platforms.
• Membership sites: exclusive access to premium content for paying members, creating a sense of exclusivity and loyalty for your digital content.
• Printable planners: digital planners and organizers for productivity, combining the benefits of digital organization with the tangible aspect of printable planners.

How to sell digital products

Successfully selling digital products involves considering various factors such as payment solutions, delivery methods, and user experience. Here's a detailed breakdown of key elements to focus on:

Online payment solutions

Integrating reliable and secure online payment solutions is crucial for a smooth transaction process. Providing multiple payment makes your products accessible to a broader audience and encourages more conversions, contributing to increased sales and revenue. For example, may want to offer the ability to pay via PayPal, Google Pay, Apple Pay or credit card. The easier you make it for your customers to complete a purchase, the better.

Automated delivery systems

Efficient delivery is a cornerstone of the digital product experience. Utilizing automated delivery software ensures that customers receive their purchases as soon as they complete the payment process. This not only enhances customer satisfaction but also reduces your workload and facilitates those passive income streams. (Learn more about a leader in automated delivery systems, SendOwl.)

Checkout options

Streamlining the checkout process is essential for minimizing cart abandonment and maximizing conversions. Offering a guest checkout option, simplifying form fields, and implementing a progress indicator can contribute to a positive user experience. Additionally, incorporating trust badges and security assurances can instill confidence in customers during the checkout process. (Learn how SendOwl has perfected the customer checkout experience.)

Marketing strategy

A robust marketing strategy is crucial for promoting digital products and reaching a wider audience. Leveraging social media platforms, blogs, search engine optimization (SEO), and email marketing can help create awareness and drive traffic to your online store. Identify your target audience, collect their email addresses, and work to provide them with the digital assets that they want.

You don’t need to spend a ton of money on digital product marketing — post on your socials and gather email addresses for blasts. Many SendOwl users suggest additional, complementary products when their customers get to their carts — helping to increase their sales without any outbound marketing at all!

It might seem overwhelming, but we have a few tips and tricks for you when it comes to maximizing your marketing.

User experience

You might have seen the term “user experience,” or UX for short, tossed around. The UX (user experience) of your online store (like a Wordpress site or Shopify store), and of your digital products, plays a pivotal role in customer satisfaction and retention.

Research shows that digital transformation and a greater focus on the UX can generate a 20% to 30% increase in customer satisfaction and a 20% to 50% increase in profits.. The bottom line is that investing in user-friendly storefronts and product designs contributes to a positive user experience and repeat customers and referrals. A lot of SendOwl users use Notion and Linktree to successfully sell digital products

Pricing strategy

Determining the best way to price your digital products requires careful consideration. Factors such as production costs, perceived value, and market demand should influence your pricing decisions. Experimenting with different pricing tiers, discounts, and bundling options can help you find a pricing strategy that maximizes revenue while remaining competitive in the market.

Do some research on products similar to the ones you want to sell, and base your own prices on that research to make them competitive. To learn more, check out our blog post on how to price your digital product.

Now you’re ready to start selling!

Embracing the world of profitable digital products opens up a realm of possibilities in innovation, scalability, and profitability. The wide variety of digital product ideas, from online courses to digital art, allows merchants to cater to a wide audience and tap into an endless supply of new markets.

By leveraging the right online platforms, implementing effective marketing strategies, and prioritizing user experience, businesses can establish a strong online presence and reap the benefits of selling digital goods.

So, if you have an idea and an internet connection, start selling digital products with SendOwl today — for free. It’s the easiest and most secure way to sell your digital products and grow your business.