How to run a successful business selling digital products

Selling digital products is a great way to kickstart your entrepreneurial journey. If you look up printable schedules, meal planners, or thank you cards in search engines, you’ll find many real, profitable businesses that are built by just selling digital products online.

Selling digital products is also scalable since most digital products require little post-sale service and maintenance. 

Also, unlike businesses that sell physical items, businesses selling digital products don’t need to worry about shipping or order fulfillment. Sure, they do have their unique logistics and delivery challenges to address — Do you want to sell or rent your digital files? Would you rather use auto-expiring links to deliver your files so users can’t download them after a certain date? Do you prefer hosting your downloadables on your own site OR on a secured cloud platform? 

The answers to the questions above are often dictated by how much the advantages and disadvantages of each option weigh for your business. For example, if you are worried about overloading your website with files and making your (potential) visitors wait a lot for a download to complete, hosting the files on a cloud platform like Amazon S3 or Google Drive is something you should consider. If the number of digital products is not high and the file types don’t have big file sizes, hosting the downloads directly on the website is the standard option. Things change if your business model relies on creating expiring download links. In this case, Amazon S3 is back on the table again as the best option. Add the need for delivering downloads from extra-secure links, and you have a winner!

These kinds of decisions associated with digital products might be confusing at times, but hey, at least there are no complex supply chain dynamics to work out, like it happens in the case of a regular e-commerce business. Therefore, running a digital products business can be convenient and cost-effective. Even if the products are low-ticket, the profit margins can be high.

So let’s look at the exact steps you can take to launch a successful digital product business.

Setting up a store for selling your digital products

The first step toward selling digital products is to build an online store or website. To build yours, you have several options:

You can join online marketplaces like Etsy or Amazon. 

When you join these platforms as a seller, they let you tap into their established audiences and charge a commission on each sale. In other words, you’re a renter and you don’t really own your store. Some of the major challenges you face in this case are that you have to get noticed, you are competing with established sellers, and you have to adhere to the marketplace’s terms of service. 

Also, as these platforms handle the delivery, you don’t get access to your customers’ emails. This limitation alone rules out this option for most digital sellers. After all, if you don’t have a list of your current customers, how can you reach out to them with marketing offers? How would you announce new product launches to them? And how would you keep them engaged if you can’t email them when you post new content? The email channel generates $42 for every dollar spent. Think about it!


Get Download Monitor’s Complete Extensions Pack and build (and fully own) your email contact base, so you can:

✓ Reach out to your email leads with promotional offers 
✓ Collect feedback on your current offerings
✓ Keep your customers engaged so they turn into lifetime buyers

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You can sign up for a service like Shopify, WooCommerce or BigCommerce. 

Another option is to create a digital store using an ecommerce platform. Even though these services are easy to set up, costs add up fast. First, their fees ($29/mo) can feel a little steep to beginners. You also need to buy extensions for simple things like offering coupon codes or building your email list. And you’re still boxed inside your platform’s capabilities.

In addition to Shopify’s basic ($29/mo) plan, you’ll also need to invest in a digital products solution like Easy Digital Products, a 3rd party app for Shopify. This one, for instance, starts at $9.99/mo (for stores that sell up to 10 products). You get just 1GB of storage with this plan. You’re looking at, at least, about $40/mo just for the basic infrastructure (Shopify + a basic plan for a solution like Easy Digital Products). Beyond these, the more extensions you need the higher your costs can go.

(Easy Digital Products does offer a free plan — allowing you to sell up to 3 products — but as you can tell, you’ll outgrow it in no time. Besides, it doesn’t unlock the full solution. And anyway, Shopify’s fee applies.)
With a solution like WordPress, in contrast, you can start your downloads store by just paying for a domain name, hosting, and an annual subscription to Download Monitor’s Complete Extensions Pack. It has everything you need to run a fully-featured digital products business.

Get Download Monitor’s Complete Extensions Pack now

You can go with digital product sales platforms like Gumroad, Payhip, SendOwl, and Podia, among others. 

These are digital sales platforms that are built exclusively for selling digital products. But most of these platforms offer very limited features, and most lack important elements like a blog. Most of the fully-featured ones are very expensive. The fee on every sale can also be a problem. GumRoad, for instance, charges 9% on every sale plus 30¢. 

Also, GumRoad’s pricing structure varies based on how much money you’ve made with it. Getting that 9% down to 2.9%, means you’d have to accumulate a total sales volume of $1,000,000. Certainly not impossible but you’ll be handing over a high % of your sales to Gumroad for a few years. 

What if you could pay a flat yearly fee and just reinvest the remaining profits into your marketing efforts? 


Forget commissions and fees!
Own 100% of what you earn with your digital product sales with Download Monitor.

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Alternatively, you can start selling digital products by creating your digital product store on WordPress…

With WordPress, starting out is easy. The domain name and hosting are usually the only costs you have to pay when you first start out. WordPress provides a big bunch of plugins designed to help you organize your files and manage your products.

In fact, to set up your digital products store with WordPress, all you need is a free plugin like Download Monitor. Download Monitor lets you upload your downloadable products to your library and charge a fee for each download. Currently, Download Monitor works with PayPal – but there are plans to add support for Stripe and more payment gateways very soon!

Selling digital products with Download Monitor is as easy as one, two, three.First, describe your product. Go to your WordPress dashboard > Shop > Add New Product.

Then upload your digital files. Click on Insert Download and you can choose to Insert Shortcode or Quick-add download (to upload your file).

Set a price:

Publish and done!

Of course, you still need to connect it with your payment accounts, but you get the drift. It’s easy.

Where Download Monitor shines is when it comes to reporting. None of our competing solutions offer in-depth stats on downloads – which pages generated the downloads, which product categories & so much more. 

While other platforms want to charge you for having a blog, going with WordPress means you get a blog – for free – out of the box And as we all know, content marketing is the single most cost-effective customer acquisition channel. 

Even more – by going with WordPress, which currently powers over 40% of the total number of sites on the Internet, you get access to over 55,000 plugins – many of which are completely free!

With WordPress, you own your digital products store and branding — 100% of the time.

Getting to know your target customers

When you can identify a “person” from these faceless audiences, you will be able to drive significantly better marketing results and more sales. Creating a customer persona lets you do this. Your ideal customer persona holds all the information you need about your potential customers and helps you get your branding and messaging just right. It has details about their age, gender, what they do for a living, what they do in their free time, their goals, etc.

Below, you have a customer persona for a flower delivery business. When you know your ideal customers this well, you can better tie your products to their needs and goals. You can also discover additional digital product ideas that might be relevant to them.

To create yours, you can use the same format and write what you know about the people who would buy from you. Research is essential to gain a better understanding of your market and to learn more about your ideal customers. But how to go about this research? You can follow the steps from this persona creation tutorial.

Let’s say you have a business based on nutrition and one of your products is a digital meal planner. Through research you find your buyer persona to be a 30-something American woman, interested in eating healthy and cooking their own food with fresh ingredients. The buyer persona is working a full-time job with an active lifestyle, so they prefer recipes of medium difficulty and that don’t require more than half an hour to make. They also like food that both tastes and looks good. Now, ask yourself where are you most likely to find people that match this profile? The answer is most likely to be Pinterest, which is a very visual platform, perfect for getting inspiration. Therefore, you’ll need a good presence on the platform to be able to market your meal planner to the target audience. Also, considering the traits of the buyer persona, make sure to customize the product’s landing page accordingly and also pay attention to the product’s design as well. Just to give another quick example, if you are a business that sells IT/Saas stock imagery and you discover (among other things) that your ideal buyers are businesses that are heavily invested in content, you’ll probably have to use content (such as a blog) to bring them to your offering. You might also want to build visibility on their popular hangouts — by guest posting on popular blogs, for instance. Or you might decide that while you sell IT/SaaS stock imagery, you want to target the high-end web graphic design agencies or the most experienced designers they hire.

Here’s more on what you can do after you’ve segmented your market and identified your ideal persona.

Carving your niche

The market for digital products — just like the market for physical goods — has many segments. And your product can’t be a good fit for each.

For context, let’s say you create digital planners. Now, list the many different kinds of digital planners that there can be. Here are a few examples:

  • A minimalist digital planner
  • A feminine digital planner
  • A business digital planner
  • OneNote digital planner
  • A digital planner for iPads
  • A planner for a Mac
  • A digital planner for Windows

And we’re only getting started. 

Your digital planner may be right for only one or a select few of these segments, and not for all.

After you have clarity, your goal is to become the go-to digital store for your type of digital planner. This is also your UVP (unique value proposition) — your single most important marketing message that speaks directly to your target customers.

Entrepreneur and author Steve Blank gives this helpful template for writing a UVP:

“We help X do Y by doing Z.”To put all this in perspective, look at this UVP for a digital planner:

Notice this digital planner seller’s UVP:

‘A must-have for the online business owner.’

As you can see, this seller’s UVP is personalized for its customer persona (business owners). 

Also, the copy reinforces the many ways the product taps into its target customer’s desires around wanting to stay productive (even on the go) or making the most of their time. Because the market for the most profitable digital products is very competitive, you need to think about branding from the very start. See how your product compares and differs from your competitors’ digital products, then translate that into a clear UVP and brand messaging. Here’s a step-by-step tutorial on how to go about doing this.

Attracting, building, and nurturing your community

For long-term success when selling digital products, you need a digital marketing plan for your store — one that helps you build a steady and engaged customer base. There are three parts to this; let’s look at each.

Attracting qualified leads to your digital products store

To help people find your products via search engines like Google, use the right keywords inside your website copy (SEO!). Also, use them in your title tags, headlines, URLs, product titles and descriptions, and page meta-descriptions. Optimize your images with descriptive alt tags as well. Also, create a page for every product you sell. To get your site architecture and on-page optimization right, closely follow your top-ranking competitors.

Social media platforms are another source of leads for digital products. To drive digital product sales with social media, revisit the target personas you created and figure out their popular social hangouts. Next, create a presence on each. Another effective way to generate qualified leads for your digital goods is through content. Create a blog strategy and publish an article every week on topics your target readers search for. Start by looking at what other brands are covering.

Building your list

Just like any other ecommerce store, you need to build your list too. The emails you collect are actually the leads you can market to. Freebies are a great way to build up your email list. Download Monitor’s Complete Extensions pack gives you a host of extensions to collect emails. The Email Lock extension, for instance, lets you offer freebies to your users in exchange for their emails.

In exchange for their email addresses, you can also offer discounts or coupons. Just export the list of emails Email Lock generates, import it into your email marketing software, and email your list their coupon codes!

Expert tip: Place your opt-in/freebie prominently across your website! With Download Monitor, you can use shortcodes to drop your email opt-in boxes anywhere inside your pages and posts.

Creating a communications plan

To keep your audience engaged, schedule regular communications to your email subscribers and social media following about the new posts from your blog.

If you don’t have original content to post, you can curate stories from the web that will be of interest to your customers and leads.

Also, plan email marketing campaigns and social media shoutouts around new product launches, updates, and special promotions like Black Friday and Cyber Monday deals. 

Creating a product development plan

Just like any other online business, you, too, need a roadmap for launching new products and updates to the current ones.

For products that need regular updating (like an annual digital or printable calendar), this is a must as you’re required to launch a new one at a regular cadence. But even for those that don’t (like a non-dated weekly schedule), this is a nice-to-have. You could launch a new product line and say “Your favorite weekly calendar — now in three more of your favorite colors.” Or, “New designs just in!” And so on.

From time to time, also think of launching customization offers. Choose customizations that you can do at scale and offer it to your tribe for a small fee. 

To get a head start with this, subscribe to your competitors’ digital stores and note how often they launch product updates. You can closely mirror their update timelines.Expert tip: your best customers are the ones you have already! These are the easiest to upsell/cross-sell to.

Selling digital products: A few more logistics

Here are a few more things to keep in mind when selling digital products:

Usage terms and conditions: What does purchasing a download from your store entail? Can buyers resell or distribute their purchases? Or is doing so a violation of your terms and conditions? Answer these questions. 

Also, communicate clearly to your users the difference between licensing and ownership. Digital sales allow users to use your product, not to own it. Different types of digital products need different kinds of protection when it comes to usage terms and licensing. Check out this Etsy seller’s terms of use. The TL;DR on the listing looks like this:

USES:

-For personal use only

-Not for any commercial use

-Can’t be resold as is or altered on its own

YOU MAY NOT share, resell or redistribute our products. Please read our policies carefully for more information on allowed uses. If you use Download Monitor to sell your digital products, you can get our Terms & Conditions extension and make your users accept your terms and conditions in order to download your files:

Pricing strategy: If you price your digital products too low, your potential leads might discount their real value. Price them too high, and you’ll lose sales to your more budget-friendly competitors. 

For example, you can get good SEO courses on Udemy for just $10. However, a good portion of users will discount their value, because of their price. 

On the flip side, other users might hesitate to take up an online course that “feels” too expensive. You get the drift. Again, return to the personas you created to understand their pricing sensibilities. Do a thorough competitive analysis when pricing your digital products. Look at the top ten competitors and get a sense of what the “going” rates are. Also – don’t be afraid to price higher if you’ve got a high-quality product or a good differentiator like a more rich feature set.Customer service: Don’t overlook this. If you’re serious about generating repeat purchases from your customer base, offer exceptional customer service. This is especially helpful if the product you sell involves a membership or a monthly fee for access. You can use a free WordPress help desk solution (like KB Support) when you’re just starting out and upgrade as you scale.

Wrapping it up…

Just like physical product makers, once you launch a successful digital product and build a decent customer base, you can launch newer products and boost your profits.

Remember that your store plays a big role in this. So don’t sign up for any quick solutions. Instead, build your own website with flexible tools like WordPress and Download Monitor that scale as you grow. 

Ready to open your digital products store with WordPress? Take Download Monitor for a spin. Download the free plugin and get all that you need to get started and upgrade once you’re ready.