How to Sell Digital Products Online 2020? – A Complete Guide


2020 is an era where eCommerce is ruling the market, and it continues to grow as we speak. The market now is full of eCommerce websites and mobile applications, each of them claiming a share from this multi-billion dollar pie. Selling digital products is one of such business ideas. Unlike physical products, which require continuous replenishment of the inventory, you can create a digital product once and sell it repeatedly to as many customers. It’s clearly lesser work and better money if you know how to sell digital products online the right way. Who would not like to run an eCommerce business that doesn’t even require shipping and inventory?

This article will give you an understanding of the digital products, how to sell them, what to sell, and, how to build a personalized digital products store. We will also discuss the challenges you might face while selling digital products and how you can handle them. Let’s begin.

What are digital products?

In simple words, a digital product is an electronically deliverable asset with some value, which people would like to purchase. Based on copyrights and licensing agreements, you can sell/ re-sell a digital asset repeatedly without replenishing the inventory. Some examples of digital products are images, songs, videos, e-books, software solutions, etc. Generally, the eCommerce sites or businesses that sell such intangible assets deliver them in open-source file formats such as MP3, PDF, PNG, MP4, MKV, and AVI, or proprietary formats with encryptions.

Note: We can see the example of a proprietary file format of a digital product in music or video streaming apps. Some apps deliver music/videos in encrypted formats that you can open or play on only their proprietary applications. You cannot use any other music/video streaming application to play the songs downloaded on some other streaming application.

Be advised that downloadable files are not the only way to deliver a digital product. Based on your business and revenue model, you can also deliver via the cloud, such as SaaS-based software solutions, or through buffers, such as video-on-demand and live streaming.

Benefits of Selling Digital Products

In terms of comparable accessibility of selling physical products, digital products are one of the easiest things to sell on the internet. That’s why everyone wants to sell digital products online and bag the benefits of running an eCommerce business. The process of purchasing is almost the same as physical products. Hence, you don’t have to teach anything new to your customers. Besides, you get the benefits of hassle-free product delivery through instant downloads, cloud-delivery, or buffer stream.

There is a low overhead cost, as you don’t have to spend extra on storing and managing the inventory physically. The same intangibility of the digital assets maximizes your profit margin, as you can re-sell the same product multiple times and generate most of your incomes without investing in the pre-sale and supply-chain process for each sale you make. Moreover, the post-sale process is extremely convenient and ensures instant delivery of the order electronically without an investment in the logistics and shipment.

Challenges of Selling Digital Products

Although digital products are easier to sell, they are not easy to manage in a business environment. You will face some unique challenges that might even break your business if you do not handle them wisely.

·         Harsh Competition

The rule is simple; the easier it is to start a business, the more competitive it becomes. The benefits of selling digital products are accessible to everyone in the market. Hence, it’s inevitable that you will face competition from many other digital product sellers. Unless you have a unique and valuable product to sell, it’s not easy to generate sales.

·         Free-Alternatives

There is always a chance that someone is providing a free alternative to whatever you are selling. It might not be as good as your product, but consumers generally do not care if it’s getting the job done. For example, despite there are so many amazing, premium WordPress themes in the market, some website owners go for less efficient but free WordPress themes. You have to offer some big value with your products to acquire a trusted image, as people still consider trust as more important than free alternatives.

·         Piracy/Theft

Digital products are always susceptible to piracy or theft. Whether it’s a software solution, e-book, music track, or videos, pirates are always the biggest threats. You have to be very careful about your business model, eCommerce platform, delivery channels, and file encryption to avoid piracy. Can you recall what we talked about proprietary/ encrypted file formats? This could be one way to avoid piracy. Another way could be using a cloud delivery channel if you are selling software solutions, such as SaaS.

·         Marketplace Restrictions

The marketplace ecosystem for digital products is not as open as it is for physical products. There are various restrictions and intellectual property rights laws to follow. You cannot re-sell a product that you purchased from someone without permission. If you are not selling your own products, you might face restrictions on the number of times you can sell them based on your acquired rights for distribution or re-selling. Besides, popular direct selling channels like Facebook and Instagram marketplaces are not accessible to digital products.

Luckily, none of the challenges can stop you from making profits by selling digital products. With the right business solutions, revenue model, marketing, and customer acquisition strategy, it is possible to overcome all the challenges.

Profitable Revenue Models to Sell Digital Products Online

Based on the prospects and challenges, we have classified the revenue models into two major categories. You can form an overall business model on one, two, or all of these revenue streams:

Free, Freemium, and Premium Channels”

There are three main ways to make money from the revenue channels in this category:

  • Free: You can offer your products free of cost to your customers and make money from associated sources, such as showing Ads or collecting email data. For example, let them download an e-book free of cost by signing up for email newsletters. The best example is YouTube. It lets us see the videos without paying anything, while it shows us Ads to make money.
  • Freemium: This the most common revenue model followed by the digital products sellers. They offer something free of cost and keep a more valuable aspect of the same for premium streams. For example, trial versions of premium software solutions. Software vendors offer restricted versions of their solutions free and ask customers to purchase premium versions for a better experience. YouTube fits in this category too. YouTube’s Premium service is an example of how you can combine your free and premium revenue channels to drive all kinds of customers.
  • Premium: As the name suggests, everything in this model is for selling; nothing is free of cost. The revenue course in the income from sales made. For example, Netflix. However, you can sophisticate your premium model further to attract more customers, which we will see in the next classification below.

One-time Purchase and Subscription Model

You can adopt one or a combination of following revenue models to maximize the profits through direct selling channels:

  • One-time purchase model: The model lets you make money from each sale individually. Just like physical products, customers will be paying you an upfront cost each time they purchase a digital product from you. Not always, but most of the time, customers get the ownership of the products they purchase. For example, open-source code eCommerce platforms, premium pay-per-movies etc.
  • Subscription model: You won’t be selling the products here individually. Instead, you would be selling a subscription plan that would allow the customer to use the product under a contract for a limited time. For example subscription of music streaming, video streaming, or SaaS-based software solutions, such as Shopify, Grammarly, Spotify, etc.    

Digital Products Ideas to Sell Online

A decade ago, the choices were limited. You could sell only downloadable products. However, today we have cloud computing, which has made selling digital products easy like never before via different business models and revenue channels. You can sell-

  • Online courses in both pay-per-course and subscription model
  • E-books and subscription packages for the digital version of magazines
  • Licenses to use your digital assets, such as stock photos, stock music, etc.
  • Membership for access to your digital assets, such as SaaS solutions.
  • Templates, plugins, and themes for different eCommerce platforms. 
  • Your content and streaming rights, such as music, podcast, and videos.
  • Membership plans for different services such as gym, swimming club.

Tools for Selling Digital Products Online

Honestly, the range of tools differs widely from product-to-product and different business models. The market is full of both free and premium solutions to sell digital products online. Some of them are dedicated to digital products while many others can sell both physical and digital products. Here is a list of few you can use:

  • Selz: A dedicated solution for digital products with a complete package of website and shopping cart.
  • SendOwl: A digital product delivery solution, which integrates with your existing website. You need a website to use this solution.
  • Easy Digital Downloads: A dedicated Shopping cart plugin for digital products that convert your existing WordPress site into a digital products eCommerce site. 
  • PrestaShop, Magento, OpenCart: Free to use eCommerce platforms that support both physical and digital products.
  • Shopify, Wix, BigCommerce: SaaS-based eCommerce solutions to sell both physical and digital products.

All of these tools are useful for selling digital downloads. However, you would need some other kinds of solutions to sell subscriptions and memberships of certain products and services, such as digital magazines, music streaming, video streaming, and live streaming, etc. You may consider using a good turnkey solution, such as Netflix clone script, Spotify clone script, YouTube clone script to sell content. There are different vendors in the market who sell these scripts. You can know about them by simply Googling these keywords.

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I am a professional blogger, guest writer, Influencer & an eCommerce expert. Currently associated with ShopyGen as a content marketing strategist. I also report on the latest happenings and trends associated with the eCommerce industry. Follow me on Twitter @Jessicabruc (

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