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?
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 isgoing 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 setup 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 e-commerce 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 release, 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 e-commerce side of a website.
Affiliate marketing is perfect for people who don’t have much experience at 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”.
If you are interested in started out as an affiliate, I recommend you begin your training at a place called Wealthy Affiliate. It's where I started in 2010 with a website about computer software. From there I grew into this site you're viewing now, and eventually wrote my own book on the topic. Boy, how time flies!
I’ve found that Wealthy Affiliate offers a good balance of simple and advanced training which allows it to teach people the basics and to also provide them direction on how to grow their business as their skills improve.
But, the thing I like the most about the site is actually the community. Wealthy Affiliate has a large number of members and there is a strong focus on people helping one another and learning together. That type of social support can have a huge influence on how successful you are with your site and it’s something that most other services do not offer.
What do you think? Which path will you take? Will you be starting out as an affiliate of digital products or start by creating your own?
Nathaniell
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I’ve never thought about selling digital products before now. I’ve bookmarked this site, I want to look into all of these more.
I’m brand new to blogging and making money online so all of this is still pretty stressful to me, but the program you recommended (Wealthy Affiliate) really helps alleviate some of that stress.
Man I can only imagine how hard this was to do back in 2005, but then again maybe the potential for earnings was better back then too.
People always ask me if the train has left the station, so to say, and if affiliate marketing is dead. The answer is NO! That’ because of exactly what you said…it’s so much easier to build a website now than it was back 10 or 20 years ago. Because building a website is faster, getting found in Google and making money is faster too! (or at least easier LOL)
When I think of selling digital, I think of my own buying process. I love to buy things only, especially thru Amazon. It is easy, the price is right and I get free shipping. So, I agree that affiliate marketing can definitely make you money. Wealthy Affiliate is also an awesome way to get started, get training, and support of the community.
A “digital product’ is not necessarily something that’s just sold online. It specifically refers to something that can be consumed online. So a video course, an ebook, music, movies, software…those can all be consumed with a computer or phone, so are digital products. Buying stuff on Amazon is online shopping, but many of the products are physical, ie they need to be shipped!
You can also sell that stuff too, and many people making money doing it!
Digital products are simply awesome! I have always been thinking long hard days just trying to compare physical books with digital books because I read books myself. Economically, digital books are at least 50 times more effective than physical books because most of the hassle in the physical world are gone when you take them online. Although digital books are gaining popularity over the years, still many people would want to stick with the traditional physical book and we can’t question them about it. So it all depends on people’s preference at the end of the day. Great article you have there!
Hi there. I have read your blog before I joined WA and many other review and I agree on the fact that WA was built to help people succeed. It’s impressive that you wrote your own book only after 5 years. That is the idea I have in mind right now and hopefully one day I will gather enough information and experience to do it. I like the idea of combining being a creator and an affiliate to create multiple stream of income. Thank you for sharing!
Hi Nathaniell,
This is a great post on helping people to figure out whether to sell physical or digital products. I found myself stuck at that point when some people prefer to get physical products, that’s something that that can touch and feel. On the other hand,I have always wanted to create a digital product, probably delivering software or graphics so i can have the passive income. There are too many following-up work to do with a physical product compared to digital, for example, shipping. Between, what do you think of Clickbank and JVZoo, which sells a more reliable digital product?
These are some really great recommendations. I remember back in the day doing a lot of research about shopify and loving the platform, and then getting into affiliate marketing and learning a lot of it on the platform that you’ve recommend. I really like the way Wealthy Affiliate went step by step so that there’s no misunderstanding.
Hey! I have been following your blog for a few weeks now. I love your articles. This is one def didn’t let me down. I am actually currently working on my own ebook about affiliate marketing and now you have shown me a little bit more about selling your digital products on eBay. I know I will have a sales funnel approach with affiliate marketing on my product when I complete it. It just makes so much more sense to sell digital than physical in my opinion. The room for profit is so much greater.
Hi 🙂 It was my absolute pleasure to stumble across this post. I have recently gone into digital self publishing and was a bit overwhelmed of how to sell it. You’ve provided many great pointers and a lot of avenues in which I can learn more. Have you ever sold a book of your own?
Thank you again for the advice you gave here it was something I really needed to read. 🙂
Yes! I have my book available on Amazon that I published in February 2016. Check it out and let me know what you think!
Hi Nathaniel,
It’s good to actually listen to success story from bloggers like you. Be it selling physical digital products online, I think proper training and pool of resources matter. I mean of course one could have gone the hard way with trial and error on our own but when there’s good platform of learning like Wealthy Affiliate, why not take the faster route? Anyway, thanks for the affirmation that making money online is really a possible reality(although there are still a lot of hard work involved).
Nathaniel, you’re like Kyle of Wealthy Affiliate. Every time I read your blog post, I learn something new!
After reading through this blog post of yours, it reminded me that I am also an affiliate of Clickbank, that I should go back there again and figure out how can I make money selling digital products.
I am looking forward to your next blog posts, maybe you can write about the actual steps or techniques, on how to really make sales with Clickbank.
In sites like Leadsleap, I often see sales pages of people telling stories how they made heaps of money selling Clickbank products that I wonder if these people are really telling the truth or not.
Great primer on all the various facets of selling digital versus real products Nathaniell. Thank you. It also happens to be where my mind is now – on putting together an e-book. Did your experiences over your four years in affiliate marketing – before you wrote your book – help you in getting your book written and sold? Do you think you could have done it right out of the gate?
I’ve never created my own product to sell though I’d like to because there’s always scope to earn enormous revenue. I currently sell other peoples products, which isn’t bad but your sales are always based on commission.
I do very well in affiliate marketing, earn good revenue and love what I do so I’m not sure I’d change it anytime soon. Wealthy Affiliate have taught me well.
Actually, I have a full article about affiliate marketing and selling other people’s products online! I’m glad to hear that you are doing well with affiliate marketing. It’s the main thing I recommend to people because it’s worked out so well for me. I like that I don’t have to think of, build, or sell my own stuff. Of course commissions are not as big as when you create your own product and reap all the profits, but you also have a lot more expenses like staff, promotions, and paying affiliates!
Hey Nathaniell,
I myself am a fan of selling digital products online. The pros of promoting or even creating your own digital products are much more compared to selling physical products. For one, I don’t have to make the product or worry about inventory.
I know there are some internet marketers that prefer to create and sell their own products, but for now I’ll stick to affiliate marketing.
I am interested in writing my first eBook, do you have any tips or recommend any particular training?
You said you didn’t write your first eBook until five years after you got started; was it because you weren’t ready or you just weren’t interested until that point?
Anyways, thanks for sharing this post. Hopefully I can become a creator and an affiliate pretty soon… that’s one of my business goals right now.
Diana
This is such a great article for someone just starting out. I love how you go into detail about the steps you need to take to get started with a business online and insight into how to sell digital products. When I think about affiliate marketing, I think most would think of physical products. It’s great that you highlighted the digital market. Nice post!
Hey there, great article on digital products. You know, it’s a topic that I thought about for a long time now and after reading your post I think that this is a great opportunity. At first I will stick to affiliate products, and after earning a good income from them – I will go on making mt own digital products!
Thanks for the article again, many folks will benefit from it !
Hi Nathaniell,
Awesome article!
You provide a lot of information, very valuable for people like me who are still searching their way on the internet where to start. What works and what doesn’t.
I think the power of a supporting community certainly helps to grow faster in business.
Can I ask you how long it took you to write a book? And is it hard to do?
Thank you for the ideas and explanation.
Kit
Wow you really knocked your socks off, A great way of telling people on how to sell digital products online.
a wonderful way of promoting amazon products, I need to figure out how you got the amazon pop up on your website. I want that on my website as well.
I will enjoy having a cup of coffee with you.
Nice job
Very informative article Nathaniell,
I have been a physical affiliate marketing since starting my business, I have considered some digital products lately but I have not found any which really has impressed me enough.
I am sure most people battle the idea of which type to promote, many promote both which is good business sense for sure.
If you can get the marketing down, then it really doesn’t matter if you go physical or digital. However, I’ve always had more luck with digital products. I’m working on a physical product website right now, but so far, not many sales. I do have some luck with the one I built using this WordPress theme for Amazon (earnings shown).
I think if you are going the digital route however, you really need to consider what type of information people NEED. For example, I watched some YouTube videos the other day on how to paint a house. The guy was selling an ebook, but I didn’t buy it because I didn’t really need the info. Basic info was enough.
But if it was how to build a chicken coop, even some YouTube videos wouldn’t give me the exact plans I need. I’d need a downloadable book for that!
I have been thinking of selling a digital book for quite some time. In addition to my full time job and online business efforts I take photographs of abandoned buildings (urban exploring). I have thousands of pictures… and actually made a test book a while back.
Now I’m thinking of either printing up physical books and selling online or selling a digital e-book with pictures and stories. I should probably do both…
Making a book of abandoned buildings sounds awesome. Do you have an Instagram account with your photos? That would be a great way to advertise your book!
Hey Nathaniell, great page. Reviewing yours was much more pleasant than one I did the other day: dude, I want to shake your hand just because you know how to spell and use good grammar!! Lol!
Your page is an excellent synopsis of what you’re doing – what you’ve done – to assemble a working model of getting your beans while sipping coffee. As you stated, you’ve got several businesses going and it seems to be working great for you!
Just as an aside, and this is something I found out about yesterday. I read where you leaned pretty heavily on being an Amazon affiliate. All in all, that’s not a bad idea. But. I wish I could do that. Be an Amazon affiliate. You see, I went to amazon.com yesterday to sign up so I could experiment on my blog. They wouldn’t take my state. Come to find out, I live in one of six or seven that have banned Amazon Affiliates because Amazon refuses to collect and distribute sales tax for them. I know, I know. It’s small of them, the states that is. Doesn’t surprise me about my own (Louisiana) but I’ve got a better chance of winning the Powerball than that law getting changed. Worse still, I read that it affects eBay as well. I’m sure that I will eventually work around that, but it takes away a lot of options.
I love the idea of selling digital products online. I really want to learn how to create an ebook because I would either like to give one away for free as a thank you or a gift for signing up to my newsletter or at least sell one. Great article about making money selling digital products as it is definitely possible to make good money doing that.
I had a lot of fun (even though it was work) creating my ebook available on Amazon. Now it makes about $100 a month, which isn’t a ton of money, but not bad considering I don’t have to do any work to maintain it! If you have expertise in a subject, I highly recommend that you write your book and sell it on Amazon. I prefer it to places like Clickbank or JVZoo because so many people buy Kindle books nowadays!