How to run a successful business selling digital products

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

If you can create a digital product with decent demand, you, too, can build a business. Selling digital products is also scalable since 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, order fulfillment, or delivery. This makes running one convenient and cost-effective. Even if the products are low-ticket (like most digital products are), the profit margins are 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 fee for each sale you make on them. You’re a renter and don’t really own your store. Aside from getting noticed, competing with established sellers, and adhering to the marketplace’s terms of service represent some major challenges. Plus, you can’t build your private customer base. 

You can sign up for a service like Shopify or BigCommerce. You can easily create a digital store using these ecommerce platforms. 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 in your platform’s capabilities.

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; most lack features 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 5% on every sale. Plus, there’s a charge fee (3.5% + 30¢).

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. This digital downloads plugin offers a bunch of payment options, including PayPal.

Selling digital products with Download Monitor is as easy as one, two, three.

First, describe your product:

Then upload your digital files:

Set a price:

Publish and done!

Of course, you need to connect it with your payment accounts, but you get the drift.

You also get many ways to organize, display, and track your downloadables.

WordPress also lets you add a blog to your digital product store. This is a valuable channel for driving digital product sales. Plus, you have free WordPress plugins for adding all the functionalities that you need to add to your store — for example, for building your email list, adding landing pages for promotions, and more. 

With WordPress, you own your digital products store — 100%.

Getting to know your target customers

Identifying your real target market is another crucial step to building a profitable digital product brand, as depending on what you create, your digital products could appeal to quite broad or very niche audiences.

For instance, if you develop a Yoga tutorial video series for kids, you could be looking at a far wider audience. 

In contrast, with a digital meal planner, you would be targeting a very niche one.

Similarly, if you sell stock photos or templates to a particular market, such as IT or SaaS, you’d be catering to another very specific type of audience.

You get the idea.

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, use the same format and write what you know about the people who would buy from you. Research to know them better.

If you realize that your ideal parent persona is a homely, well-settled male in his mid-thirties, you’ll most likely find them in Facebook groups. So you’ll need some strong Facebook group marketing.

If you identify your digital meal planner buyer to be a 30-something American woman, you’ll probably find her on Pinterest. So you’ll need a good presence on the platform.

If you discover that your ideal IT or SaaS buyers are businesses that are heavily invested in content, you’ll probably have to use content (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.

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 just a few:

  • 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 or 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 how this digital planner seller uses a UVP that’s personalized for its customer persona (business owners). The copy, too, reinforces how it resolves the target customer’s pain points. 

Also, because the market for the most profitable digital products is very competitive, you need to think about branding from the very start. A good website, a clear value proposition, and a professional logo can help you stand out. 

See how you compare and differ from competitors’ digital products. And then translate that into better branding and messaging. 

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. Emails you collect are actually the leads you can market to. Freebies are a great way to build up your email list. In exchange for their email addresses, you can also offer discounts or coupons.

Your checkout page can also contain opt-in boxes that allow you to contact your customers with cross-sell and upsell offers. Collecting your customers’ emails also helps you collect testimonials from them.

Also, include opt-in offers on your key website pages and blog posts. 

If it makes sense, you can also create a private social media group for your tribe or a membership website.

Creating a communications plan

Regularly reach out 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/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 age (like an annual digital or printable calendar), this is a must. You absolutely have to launch a new one every year.

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 at 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.

Keep in mind: 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; they don’t own it. Different types of digital products need different kinds of protection when it comes to usage terms and licensing. 

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. So do a thorough competitive analysis when pricing your products. Pricing is naturally more complex for the more complex digital offerings like online courses or software.

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 support desk solution 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 the quick solutions. Instead, build your own website with a flexible tool like WordPress and 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.