Sometimes I try to explain to friends or people I just met what I do for a living and it becomes very clear that many people don’t know what digital products are.
And some of them are business owners themselves, with either a local business or an online shop selling physical products.
When I travel, or take time off, people are intrigued by the fact that my business carries on making revenue, despite my “absence”. And that happens because digital products are fantastic passive income earners once you figure out the steps to create, promote and automate delivery on autopilot.
So, in this post I will talk about what digital products are and why I believe every business should have them (alongside their other income generating services and/or products).
What are digital products?
Digital products are any asset that you sell online which does not require you to ship anything for your customers or to replenish your stock.
Most of the time these products are also consumed online (the exception being printables), as many can be just downloadable PDFs, ebooks or Canva templates.
Examples of digital products
- Ebooks
- Workbooks
- Online courses
- Online workshops
- Printables
- Creative assets like patterns, graphics and clip art
- Templates (this is what I sell!)
- Stock photos
- Spreadsheets and calculators
- Slide decks
- Presets
- Design themes
- Softwares
- And many more…
If you still can’t put your head around all these different kinds of digital products, I have this digital product ideas list that is a comprehensive resources giving you plenty of examples of digital assets for you to sell online.
How can digital product generate passive income?
One great advantage of digital products is that, in case of an evergreen asset, you only need to create that product once and keep selling it repeatedly without the need to add extra work, huge amount of maintenance, inventory and logistics management.
Depending on your type of digital product it may even eliminate any follow up customer services. Many sellers of digital products offer no refunds for their products, and some digital assets simply require no follow up questions or guidance.
And that is how digital products have the potential to create passive income. You create the product once and sell it for years to come with no extra work.
However, not all digital products generate passive income in the same way. And some may require quite a bit of active work before you start earning passively with them.
So, one thing to remember is that there is always some level of active work involved before you can make passive income with digital products.
How can my business take advantage of passive income with digital products?
If you already have a business online, be that a service-based freelancer, a coach or an online shop owner, then you could come up with a digital product idea that will compliment the services or products that you already have.
This is where most people get stuck. And my solution to that is always going back to basics and thinking like a beginner (not the expert that you are).
What kind of problems beginners have related to your industry and the products/services that you offer?
For instance, I have a friend who is the owner of a gluten, dairy and sugar-free bakery. She sells delicious baked goods (physical products) in a physical location (the bakery).
It might look like her business model has no space for digital products, right? Wrong!
She has a strong online presence with her social media and does a fantastic job promoting creating buzz for her brand through her channels. Her website is also set to receive online orders for custom baskets and other seasonal products.
In fact, she has all the back-end tools already in place to sell digital goods (website, checkout page, payment processor…).
But don’t feel discouraged if you don’t have that! You don’t need all the bells and whistles to get started in this business, there are plenty of online marketplaces and simplified checkout software out there that can get you started in no time.
For my friend, this opportunity is really staring her at her face. She just needs something to offer the customers when they already have their credit cards in hands and are ready to make a purchase via the website!
So what digital products could she offer? Let’s think like a beginner for her audience.
Say I just discovered my child has intolerance to lactose. I don’t know the first thing about cooking without dairy products. I would have questions such: What foods are lactose free? Does he need supplements? How can I adapt my family’s menu to make sure it is suitable for him? What are the best substitutes to dairy products? And so on…
The next step would be coming up with a digital product that solves one problem for her audience.
Now, imagine me finding her online channels and all the great info and delicious dairy-free images she posts online. I get excited because I can finally buy a birthday cake that my son can eat!
I go order it online, and just as I am perusing the site I see this great dairy-free recipe ebook that I can purchase at the same time as the cake. Or I see this online workshop offer teaching me how to substitute dairy dairy products in my every day cooking. Chances are I would buy them, because it is information that can help me solve a problem I have!
And that’s how you go about coming out with digital product ideas, but I have a post with many more ideas and examples to help you come up with digital product ideas for your business too.
