Creating a digital product that sells while you sleep is the ultimate dream. However, uploading an ebook to your website won’t automatically make it sell.
In fact, you may have heard plenty of people say that digital products don’t sell online anymore and that most consumers expect to receive their content for free.
However, there are plenty of multi-million dollar businesses that sell purely digital products.
What is a digital product?
A digital product is any product that a customer can purchase and use online. In many cases, this includes some form of content, such as a newsletter, podcast, video, ebook, or course.
Most digital products are either entertainment (such as music or a storybook) or educational (such as a course or instructional ebook).
What are the benefits of selling a digital product?
If you’re considering selling a product or service, a digital product may be the best option for a few different reasons.
The first benefit of digital products is that you can reach a much larger audience without working any harder or accumulating more cost.
For example, if you want to help people cook healthier meals, you can offer cooking classes, but you’ll be limited to serving the people in your town.
Additionally, if you want to grow this business, you would have to hire more chefs and pay for more equipment and kitchen space.
However, another option is to create an ebook with your favorite recipes. You can sell it online, reach an unlimited number of people, and you’ll never have to increase your output.
Another reason why digital products are excellent is that they require very little effort after the launch and will continue to make more money.
With a service business, you only make money for hours you’re working. With an ecommerce business, people may send orders at any hour of the day, but you still have to fulfill them and keep the items stocked.
However, digital products can be purchased at any hour of the day and never have to be re-stocked. Therefore, it’s the ultimate business model for passive income.
Low startup cost
Finally, most businesses involve startup costs and overhead that can easily run a person into debt.
For example, if you have an ecommerce business, you may have to purchase some of your products upfront. Therefore, you will have to pay for not only the products, but also the storage space.
Service businesses also typically have ongoing costs. For example, if you’re a personal trainer, you may have to pay to rent gym space, deducting from your profit.
With a digital product, you only have to pay for your website and any marketing costs (which are also costs you would pay if you had an ecommerce or service business).
Examples of profitable digital products
So, what kind of digital product should you sell?
In general, most digital products are educational (teaching people how to do something) or entertainment. Once you select a topic and know what you want to sell, you can use a few different models to deliver the content.
Here are the most common ones:
- Podcast (Joe Rogan – $30 million before Spotify deal)
- Ebook (Carol Tice $45,000)
- Online Course ($1 billion)
- Newsletter (The Hustle – $27 million)
- Subscription Content (Bloomberg, New York Times)
- Premium Video (Netflix – $30 billion)
While some of these forms of content are typically free, many people are willing to pay for them if what you offer is significantly higher quality or exclusive.
For example, there are plenty of free newsletters available, yet many people are willing to pay $299 for The Hustle’s premium newsletter.
So now that you’ve seen a few of the most popular models, here is a step-by-step guide to building and selling a digital product.
The first step is to brainstorm ideas for the type of content you will sell.
In general, creating educational or informative content is much easier to sell than entertainment (such as music). That’s because the quality of entertainment is generally more subjective and more difficult to measure than informational content.
Therefore, brainstorm what kinds of skills you have. You might be surprised that many people are more than happy to pay to learn your skills.
Here are just a few examples of skills you might write down:
- You speak Spanish.
- You are fit/have lost weight.
- You can edit videos/podcasts.
- You can build Shopify stores.
- You can do SEO.
- You can cook healthy meals.
- You’ve helped people improve resumes.
- You can put together great outfits.
Notice that each of these skills can be turned into digital products.
If you still don’t think you have any skills, think about what you do on the weekends. Plenty of people are willing to pay money to improve their hobbies, so don’t write off hobby-related skills like chess or swing dancing.
The next step is to do thorough customer research. Customer research is perhaps the most important part of the entire process. If you don’t understand your customer, it will be very difficult to sell your product.
Start by creating a persona for your customer. A buyer persona is a detailed description of the title/position of your customer and their personal struggles.
This will enable you to create more targeted marketing strategies and tailor the product specifically to their needs.
For example, you may decide to create a weight loss video course. However, targeting all people who want to lose weight is too broad and will likely not sell very well.
However, as you do this exercise, you may discover that your target audience is actually women who had babies about six weeks ago and need some motivation to get back into shape. Perhaps these women used to work out and are finding the transition difficult.
Notice that this niche is much more targeted and more likely to convert women who fit the description.
Here’s a template to help you create your buyer persona:
- What is the typical gender/age/title/income level of your target?
- What is the key pain point in their life right now that your product solves?
- What are some solutions they have considered/tried before they find yours?
- What do they search on the internet before finding your solution?
- What are indirect desires they have that your product will solve (indirectly)?
Here’s an example of this buyer persona in action with the weight loss example:
This helps you understand not just how your product will solve a single pain point (such as losing weight), but also how your product will impact their life (she will look like the perfect mom).
Note that you should be talking to potential customers to fill out this form rather than just guessing. If you’re guessing, you’ll miss out on a lot of key pain points and underlying struggles.
Now that you have a rough idea of the product and your customer, the next step is to consider a pricing point. This is essential, as a $5 ebook will require much less work than a $300 monthly subscription newsletter or $3,000 course.
In addition, some niches may not have a market for a high price point. For example, while many people would be happy to pay $1,000 for an SEO course, you may find that there simply isn’t a market for a $1,000 swing dancing course.
Therefore, the best place to start is by doing competitor research. Are there any competitors in your niche selling a digital product similar to the one you have in mind? If so, what’s the price point?
Note that the price point does vary drastically based on:
- The quality of the content
- How you present the product
- Additional bonuses (community, Q&A, etc.)
Therefore, even if you see an SEO course on Udemy for $100, that doesn’t mean that you can charge $2,000 for a similar course … even though some people will only pay for higher-priced products because they believe they have more value.
Just be sure you can find other courses in your niche similar to the price point you want to charge.
Note that most of the courses with higher price points are typically not listed on course websites, so you may have to Google around or ask in a forum like Quora for the best courses in your niche.
Ideally, you want to see plenty of competition in your space (fitness, SEO, cooking, etc.). If there’s a lot of competition, that means that plenty of people have this pain point, and you’ll be able to tap into the market.
However, your course needs to offer some unique value that would make people want to buy it over other courses.
Therefore, you would take each of the courses mentioned above and look for reviews on them. What are the most common complaints? What are things people liked about the content?
For example, here’s some feedback on Brian Dean’s course that I found in a review blog post.
In addition, here are some questions people had on Reddit that they wanted to see in the course:
While this process is a little more difficult to do with newsletters or ebooks, you can ask people on social media or in Slack groups for newsletters/ebooks/podcasts in your niche that they have paid for and what they liked/didn’t like about them.
Now that you have a few ideas of unique selling points, you can create an outline of the course or your unique value proposition (if you’re doing a podcast, newsletter, etc.) and get people on a waitlist for the product or presell it (with an estimated timeline of when the product will be delivered).
Once people have handed you money for your product, then you can go and build it. If you try to build it first, you may find that you built a product that nobody wants.
So, if you’re going to do any step in this process, it’s validate your idea!
Typically, the best place to start validating your idea is with friends. (Note that while it may be awkward to ask friends for money, it’s essential. Simply asking if they like the idea is not the same as handing over cash for it).
However, if you have a B2B niche and not many friends/following in the space, you may want to build a quick landing page with a tool like Instapage, put up your offer (no, you don’t need a product to make the offer), and then run Facebook or Twitter ads to it.
If you have an email list, just send out a quick email asking people if they would like to purchase it at a discounted rate.
Here’s an example from Julian Shapiro:
Now that a few people have handed over cash, it’s time to create the product.
If you’ve already done the steps above, creating the product is fairly straightforward. If you have cash on hand, you might consider hiring people to help you out.
For example, you may outline the ebook and then hire a writer to write most of it.
If you’re doing an online course, you may record the videos and then send them off to someone on Upwork to edit them. The most difficult aspect might be figuring out technical aspects, such as uploading your podcast to Apple Podcasts or finding a great designer to help you with your ebook.
Here are some guides to help you get started with each of the various content types:
Build an audience (quickly)
As you’re building your product, you should simultaneously be building an audience.
Unfortunately, building an audience usually takes time, which is a commodity you don’t have. Therefore, these tactics are the most effective way to build an audience as quickly as possible.
As a general rule, you should spend about 20% of your time creating your course and roughly 80% of your time building an audience for the course launch.
Get on podcasts
One of the best ways to build an audience quickly is simply doing podcast tours. Look for podcasts in your niche and tell them about your experience, results you’ve helped achieve, and pitch them an angle on how you can provide value to their audience.
For example, if you’re launching a fitness course for women with infants, consider getting on a podcast for moms.
The key is to pitch them a story and unique value proposition of what their audience would like to hear.
While Clubhouse is still relatively new, some people have managed to leverage it to achieve remarkable results.
For example, Eric Siu managed to achieve $50,000 in book sales through Clubhouse during his book launch.
He recommends people with no following contact people with a substantial following and offer to rent their room. Many people have been open to it for a few hundred dollars, and you can then answer people’s questions about your product and give a pitch at the end.
Run paid promotion
Another great way to start driving traffic to your website is to run paid ads (Facebook, Twitter, or Google) to a landing page where you can announce the launch and perhaps offer a snippet of the digital product for free in exchange for their email address.
If you keep growing your email list and nurture subscribers weekly, you’ll develop relationships and have at least a small audience by the time you launch. You can also offer to presell them the digital product.
Partner with influencers
If you can partner with an influencer to review your product and promote it to their email or social channels, you’ll generate some great initial traction.
The key to making influencer partnerships a success is to ensure that the audience aligns with your high-quality digital product.
One excellent way to partner with influencers is to include them in your product. For example, this could be including their quotes in an ebook.
Ideally, it should require little to no work on their part to be included in your product.
An excellent example of this is when Eric Jorgenson created an Almanack of Naval Ravikant, which he calls the Navalmanack. While this is a little extreme in that the entire product is based on Naval, it had a similar effect.
Eric didn’t ask Naval for anything, and Naval willingly promoted it, which made it a massive success. Having Naval as a backer also opened the door for him to acquire a forward from Tim Ferriss.
So, think about how you can creatively involve influencers. You can also always find a relevant influencer on one of these platforms and pay them to review or promote your launch.
Once you’ve done all of the work above, the launch should be relatively straightforward. Have a checklist for all of your social channels and email lists that you need to hit when launch day arrives.
Even if you’ve prescheduled everything, be sure to double-check that there are no glitches. If you’re working with any influencers, reach out to them on launch day and ask if they need any help.
In addition, you probably have at least a few followers now, so consider going live on social media (you can use a tool like Switchboard to hit all of your channels at once) and host a Q&A about the product.
The most important thing on launch day is to make sure that everything is working and people can easily download or access your content.
Long-term marketing plan
Once you’ve launched, you’ll probably close the offer again and then cycle your subsequent launches. Therefore, while the initial launch is done, you’ll want to keep building a strong online presence.
It will help your digital product get more exposure over time.
There are a few key components of a successful long-term marketing plan:
- Content Marketing
- Social Media
Each of these channels takes time to build, which is why they’re not top priorities in the first phase of building an audience, though they are essential to your long-term success.
SEO enables you to rank for keywords like “best fitness course” and “how to lose weight” on Google. Showing up for these keywords will bring ideal customers directly to your doorstep, so don’t overlook the power of SEO.
While you’re welcome to read our guide to SEO, the main components you should analyze are:
- Strong technical foundation
- Mobile friendly
- Great user experience
- Logical architecture
- Optimized for keywords
While SEO is a great place to start, the problem is that all of the other websites trying to rank for your keywords are also optimized.
So while SEO is necessary to rank, it won’t propel you to the top of search results. That’s where content marketing comes in.
To properly execute a content marketing strategy, consider all of the searches your customers make in Google before buying your product.
For example, a woman interested in purchasing a course such as fitness for new moms might Google something like:
“How to get back to the gym with a newborn”
“Motivation tips for new moms to work out”
For moms who are ready to buy, they might Google something like:
“Best fitness programs for new moms”
To appear for these kinds of search terms, create blog posts with informational content providing tips and tricks.
Though before you start writing anything, do a Google search of your target keyword. Chances are, your competitors have already written something on the topic.
So, how can you outrank them?
The best way to outrank a competitor is to produce better content. After all, Google’s goal is to present the best information to the searcher.
To produce better content, consider how you can:
- Provide more comprehensive information
- Provide original stories and case studies that hold the reader’s attention
- Present the information in a more organized manner (headers, table of contents, better design, etc.)
- Provide more visualized illustrations of the information
Finally, your email list will be essential to the success of your business. When people purchase educational content, they want to feel as though they really know the person selling the digital product.
Email is the best way to build this relationship.
For example, Ramit Sethi sells almost all of his courses exclusively through email and has had launches range up to $5 million in just a week.
To build a strong email list, email regularly in a personal tone of voice. Here’s an excellent example of one of Ramit’s emails.
As you can see, it isn’t all about selling. A lot of Ramit’s emails are discussions of his own beliefs that provide value to people.
He may tie it into a sales pitch, but they are still fun to read, even if you never have any intention of purchasing his products.
Find your audience and solve a problem they have
Creating a digital product is relatively easy. The hard part is finding your audience and communicating why your product in particular is ideal to solve their pain point.
Even if you’ve tried launching a digital product before, these tips will help make your next one a success. If you take it seriously, you could turn your idea into the next multi-million-dollar digital product.