Can You Really Make Money Selling Digital Products Online?

The online environment has become a powerful tool for making money. One of the key reasons for this is that people are spending more and more time online, while also researching and even buying products without ever leaving their homes.

With so many potential customers online, it’s no wonder that there is so much potential for people to start their own businesses.

While there are many different approaches out there, one idea is to make money selling digital products online. Digital products offer a number of advantages, especially as they are easy to sell and to access.

Within this field, it is also worth considering whether you create your own digital product or sell one that someone else has made. But, regardless of the method for selling, how effective are digital products for actually making money?

Making Money Selling Digital Products Online

In this post, we're going to look at why digital products can work so well and ways that you can take to make money. We're focusing on realistic techniques, ones that should actually work.

Physical versus Digital Products Online

As a general rule, there are two different types of products that you find sold online: physical and digital.

A digital product is one that exists entirely online. So, a person buying that product wouldn’t end up with anything delivered to their home. For example, products like this include eBooks, online training, games, videos or graphics packages.

In contrast, when a person buys a physical product, they will end up with an item of some type – a pillow, a tennis ball, a cup. You get the idea LOL.

Of the two types, physical products tend to involve more work for somebody. In particular, those items have to be created, packaged and shipped.

At the same time, there are additional challenges involved with managing inventory and dealing with refund issues. Because of these factors and the physical cost of making products, digital products tend to have a much higher profit margin than physical ones.

In most cases, it is even possible to sell the same digital product multiple times (like an eBook) without any extra work.

This feature is particularly powerful, because it makes it possible to scale up sales of digital products without increasing costs or how much work you have to do.

For example, the amount of work involved in selling a single eBook on a site is going to be similar to selling 100 or 1,000 of those books. In contrast, the work involved in selling handmade jewelry is going to vary dramatically based on sales.

Selling Your Own Digital Book Online

For example, I created an ebook about making money online called Money Blog. I wrote it once (which took a long time), but now it exists on Amazon.com and I make sales every day. I don't have to print more books or deliver anything to anyone. Amazon handles everything and I just deal with promotion (plus book updates from time to time).

If you'd like to create your own kindle book, I suggest you take a look at my post about making money selling kindle books. Or you can jump right in and take this incredible course about self-publishing from Chandler Bolt.

Creating a digital ebook to sell on Clickbank or JVZoo is super simple. The ebook format is simply a PDF that you upload to their website (for a cost of course). I haven't sold a book on there before, but there are a lot fewer restrictions with regards to formatting.

Amazon Kindle is quite strict, but you have a lot more freedom with the two digital marketplaces mentioned above.

You, of course, need an idea and some expertise to write good information in the book, or money to pay someone to write it. For example, you could write an ebook about how to prepare your home for a tornado and sell it online.

Or you could do an eBook on how to brew root beer at home, or even how to unlock an iPhone. The possibilities are endless. Many times, even though you can find this information for free online, people will pay for high-quality info with images in an easy-to-digest format.

But all of that is more about the marketing side and how you market your ebook, which I won't cover in this post. The main thing to take away from this section is that if you know a lot about something, you can simply write down your ideas or instructions on the computer and sell it online.

The hardest part of that equation is twofold: 1) Getting traffic to your sales page and 2) Converting visitors into buyers.

Selling Online Without Your Own Digital Product!

I didn't create my ebook until I had been making money online for over 5 years. Instead, I got started with a very effective way to make money called affiliate marketing. With this affiliate marketing, you aren’t directly responsible for creating or managing the product, regardless of whether it's physical or digital.

Instead, you act as a middleman, sending people to the site of the company that you’re promoting. As a marketer, your experience is going to be similar, regardless of whether you are selling physical or digital products.

You're simply driving traffic to a sales page. The seller takes care of the rest. You get credit for sales via your “affiliate link”, provided by the seller.

However, in this post, we’re mostly focusing on digital products and your potential to make money with them. After all, there is such a wide variety of these products out there and the demand for them is significant.

Selling Your Own Products Online: Books, Videos, Courses

As a general rule, creating and selling your own products is always going to be harder than selling products from someone else. However, if you have something worth selling, then this approach can be appealing.

As mentioned above, many people create eBooks that they sell online, but you can also sell things like graphics, photographs and even training courses. Udemy is a very cool place where you can create an entire course on just about anything, then upload it and sell it on their platform.

One of the tricky things about selling your own products is developing a reputation. There are a lot of digital products out there already and you need to be able to show people that yours is worth the investment.

In some cases, it may be possible to give people a teaser of what they will be paying for but even then, actually getting sales early on is likely to be a challenge.

To be successful at selling your own digital products, it’s important to take the time to research the competition that is out there and how your own product stands. Realistically, you want to be creating something that is going to be competitive, or at least unique, compared to others that are out there. You can do some initial research beforehand to find this out.

But don't sell yourself short if you feel like the competition is stiff! Sometimes you just need to knock something out to get a feel for how to produce content, then you can improve upon your product later, or enter a different niche.

At the same time, if you are selling your own product, you have to set up some type of e-commerce system. This means that you have to have some way to let people actually make purchases and to deliver the digital product to them.

There are many different ways of achieving this, such as plugins that go on your WordPress site and services that you can sign up for like Shopify.

Now, most of these approaches will involve fees to some degree or another. Likewise, you may face some overheads in creating the product, especially if you outsource some tasks.

Nevertheless, most of these overheads are relatively low and the profit margins for digital products are good – provided that you can make the sales.

Selling Somebody Else’s Products

An appealing thing about selling products from somebody else is that you don’t have to worry about actually making the thing and you also don’t have to manage any of the eCommerce side of things. This means that you don’t have to have a shopping cart on your website or anything like that.

At the same time, you can also leverage the reputation of the company that you’re promoting. In many cases, people may have already heard about that company and what they have to offer. This can make it easier to get people interested in your site and to convince them to buy.

Nevertheless, there are disadvantages too.

With somebody else’s products, you don’t have any control over the quality and you have little influence over the experience that customers have. Yet, both of those areas will have some influence on how people view you and your site.

You'll need to do your initial research on the product, and maybe even buy it in order to give your honest opinion about it, but newer and better products may be released, so it's important as a marketer that you keep up on trends!

If it's a digital course teaching something, you might need to check in from time to time to see if it's been updated.

An additional issue is that the amount you earn is often smaller than if you own the product. In particular, affiliate marketing means that you typically earn a percentage of the amount that the product sells for.

So, big ticket items will result in more profit but you’re still only getting a percentage. You may earn as little as 5% or as much as 200% depending on what you're promoting.

In contrast, if you sell your own products, you get most of the profit (minus whatever fees you face). Keep in mind though, your startup cost as an affiliate is minimal. On a bootstrap budget, all you really need to pay is $15/year for a domain and $10/month for hosting. That's cheap to run a business!

Even with the lower amount of profit, many people do prefer selling somebody else’s products. Doing so is much easier, especially early on, when you don’t have much reputation of your own. Likewise, you have the advantage of not having to worry about customer support or the eCommerce side of a website.

Affiliate marketing is perfect for people who don’t have much experience in making money online or those who have no idea about what product to create. In fact, the process of affiliate marketing is pretty easy to learn and it’s something that works for any level of skill or experience.

When it comes to making money in this way, you can basically pick any product to promote, as long as the company has an affiliate program. Thankfully, affiliate marketing is popular and this means that there are a lot of different affiliate programs out there.

You can also turn to sites like Clickbank, which specialize in offering a wide range of digital products from many different creators. However, if you do this, I recommend being careful, as many of these sites tend to host poor quality products, which aren’t worth the time or the effort.

Combining Your Efforts As Creator & Affiliate

One of the best things about selling digital products is that you have a lot of flexibility. With no physical stock to manage, it’s easy to change up what you are promoting over time and it’s easy to adapt if one product (or company) is no longer popular.

This advantage also means that you are never completely stuck if one company that you are promoting products for goes under. That type of flexibility is powerful. It means that you are never completely reliant on a single company and you don’t have to stress about how well that company is doing.

Another reason that this works so well is that you can combine methods of making money. In many cases, this may mean that you promote products from a range of different companies. But, it also means that you can sell a combination of your own products and products from other companies.

For example, my own experience was a combination of affiliate sales and selling my own product. I was an affiliate of “make money online” products for 4 years before I developed my own product (Money Blog). The expertise I gained in years as an affiliate taught me a lot that I wanted to share with others in my eBook.

You could also reverse the process and create an eBook first. To promote the book on your website, you'll need to produce a lot of content to generate traffic from search engines.

As you produce content, you may find that there are other products sold online that your audience will be interested in. You can promote those alongside your book, and make affiliate sales along the way!

That's the true meaning behind “multiple streams of income”.

Nathaniell

What's up ladies and dudes! Great to finally meet you, and I hope you enjoyed this post. My name is Nathaniell and I'm the owner of One More Cup of Coffee. I started my first online business in 2010 promoting computer software and now I help newbies start their own businesses. Sign up for my #1 recommended training course and learn how to start your business for FREE!