The Ultimate Guide to Selling Digital Goods Online (2024)

There has never been a hotter time for selling digital goods, with the worldwide eCommerce marketplace smashing through milestones. Its revenue in 2024 is expected to hit $6.3 trillion, whereas in 2023, it was only $5.8 trillion.

Digital goods, also known as digital products, run the gamut from eBooks to photographs and other forms of digital media. They can help you forge a new business venture as a valuable part of the eCommerce marketplace.

You could occasionally commit a few part-time hours, making it your side hustle, or you could sell digital goods as a full-time business owner. In either scenario, you need the right information to help you succeed

In this blog post, we’ll explore the different aspects of selling digital goods online, including the various types, the processes to set up your own business, the challenges, and more.

Table of Contents

Types of Digital Goods to Sell

Before I get into the how and why, let’s focus on the what, i.e., what kinds of digital goods you might focus on for your new eCommerce venture. Here’s a complete rundown.

Digital art

Who says you must only buy art with physical media such as watercolors or charcoal? Digital art also has a major moment, with its market value estimated at $4 billion in 2023. By 2030, the value should rise to $12.1 billion, partly helped by a compound annual growth rate or CAGR increase of 17.1% between 2023 and 2030.

Digital art includes everything from 3D animations to vector art, computer graphics, digital photos, animations, pixel art, digital collages, ASCII art, anime, and digital sculptures, to name just a few.

Beeple's image, one of the most expensive digital art — *Beeple’s NFT, one of the most expensive digital art, sold for $69 million*

Unlike physical art, which you must maintain over time to help it hold its value lovingly, digital art will always remain of perfect quality. Creating digital art also has more possibilities, so it should appeal to an even bigger audience.

Software

By far, software is one of the biggest and most profitable types of digital goods you can sell online. Global software markets are expected to reach $690.80 billion this year.

As consumers live their lives increasingly online, the need for digital software that assists in all their everyday tasks explains the high value of this type of digital good.

Online courses

Nowadays, people can pick up new skills online when they want to learn something. Courses that provide education and certification (sometimes) can attract massive customers.

An example digital good: digital courses — *Source*

Your course should be expert-led to succeed. As customers leave positive reviews, new customers should continue growing. Your courses could eventually have a waitlist, making them even more popular and covetable.

eBooks

This year, the global revenue for eBooks will hit $14.61 billion, while the CAGR between 2024 and 2027 is a decent 1.62%. People love digging into eBooks to learn more about a topic, which you should remember when selling digital goods.

If you want to monetize your eCommerce business, you can sell supplementary eBooks that complement the course materials in your online class or require eBooks for the class.

Fonts

Fonts are another major market for digital goods. Downloading paid fonts allows businesses and individuals to express themselves in ways they can’t by using the standard collection of free fonts preloaded into most computers and digital devices.

Downloaded fonts are also more unique, explaining why they’re so sought-after.

Templates

Are you trying to launch your website or e-zine, start an email newsletter, or announce a new product? There are templates for all of these, such as SMS marketing, forms, invoices, resumes, cover letters, and archive templates, among many others.

While you can find free templates for some of the above, the difference between those and paid templates is that the latter are more thorough and have higher value.

Business cards

Business cards still have staying power in 2024, but it takes an impactful graphic design to get emails and calls back. While anyone can use Canva to make a free business card, paying for business cards will drive more results.

Mobile apps

I’m sure you don’t need me to tell you that mobile apps have a huge market value, with the amount of app spending in the last quarter of 2023 reaching $69.9 billion. In the first quarter of 2024, the value was projected at $35.28 billion.

Today, there’s an app for everything, from games to education, social media, communication, utilities, and more.

Creating an app that fulfills a need in the market will help yours stand out.

Brand kits

Branding is an important facet of business success, but some startups struggle with determining where to start. Selling brand kits will give these new businesses everything they need to gain an advantage, including tailored typography, imagery, color palette, and company logo.

Music

If you’ve got the musical chops, there’s a lot of money to be made in digital music, with a projected sales rate in 2024 of $45.08 billion. You can make music in all genres, including vocal and/or instrumental.

It’s important to select types of music that are unlike what’s already on the market to ensure you can maximize your earnings potential.

WordPress themes

Helping people build a website is another way to sell digital goods online, with WordPress themes especially popular. Over 800 million websites online use WordPress, so selling high-quality, responsive website themes tailored to a customer’s brand could help you make a killing.

Tutorials

Do you know how to do something with more expertise than most? You can put your skills out there by selling tutorials. You could produce interactive or video tutorials, do a live webinar, or write an instructional guide, then sell it.

Memberships and subscriptions

Oh, and don’t forget subscriptions and memberships to digital services.

If yours is a new eCommerce business, selling a subscription is one of the best ways to grow. You can ensure consistent revenue that will stabilize your business.

What are the Benefits of Selling Digital Goods?

Selling digital goods is an advantageous choice for any eCommerce business, no matter the stage you’re in, whether you’re a startup or a more established business with a large customer base.

Here is what you can expect.

Low overhead costs

Selling physical products is expensive! You need manufacturing equipment, warehouse space, and packaging, not to mention all the paid services, to make the supply chain possible. For example, vendors, distribution centers, producers, and retailers exist.

You can cut out many of the above expenses when you sell digital goods. You don’t need manufacturing equipment since your products and services are exclusively digital. The same goes for packaging and warehouse space.

You also don’t have to worry about shipping since you can instantly deliver your digital goods to a customer’s email. It’s an excellent, low-cost way to realize your business aspirations.

Scalability

You have several ways to scale up your business by selling digital goods. You can move into other areas of selling digital products, as there are many to select from.

You can also expand your digital production rate to increase sales.

Global reach

Another great advantage of selling your digital goods online is reaching a worldwide audience. Since you deliver everything digitally, it doesn’t matter if your customers are located in your home state or halfway across the world.

You can still provide five-star services.

Flexibility

Business owners who sell digital products also appreciate how flexible the venture is. You only need your tools to create products and an internet connection, and you can work from anywhere on any device.

How to Set Up Your Digital Goods Business

Okay, it’s time to begin selling digital goods online! Here’s your primer on how it’s done in eight convenient steps.

Step 1: Decide what you want to sell

First, you need to choose the digital goods you’ll sell first. This is a tough decision as if you select a type of good with little demand or in an oversaturated section of the market; your first launch could be a flop.

You need to predate your product selection by doing market research. Get to know the world of digital goods, including which areas are the most and least saturated. Learn about your competitors and hone in on their weak points.

Market research aims to help you identify a portion of the market where your digital products could fit. Perhaps your competitors haven’t capitalized enough in a niche, or a subset of the market seems promising, and you want in.

Market research will guide you in the right direction, so take the time to commit to the work early on.

Step 2: Identify your target market

You can narrow down your target audience once you’ve found your product niche. Market research will help with this, as will reviewing any analytics tied to your brand, such as those from social media or your website. You should also review who has engaged with your advertisements.

Additionally, you could survey prospective customers. The goal is to identify their needs and pain points so you can determine how your digital goods will solve their challenges. Once you have this data, you can craft customer avatars to make selling and marketing easier.

Step 3: Plan your first products

Based on what you know about your industry or niche, your competitors, and—most importantly—your audience, you can determine what digital products might interest them the most.

Since they’re digital, you can start with a more robust launch than a company selling physical products, upwards of 20. This number of products will benefit your marketing, as you can target more long-tail keywords.

Step 4: Select an eCommerce platform

Before your first launch goes live, you should explore specialized digital eCommerce marketplaces, such as:

Amazon
Shopify
eBay
Gumroad
Envato
Teachable
FastSpring
SendOwl
Podia
Stan

Some platforms for selling digital goods are more generalized, like eBay and Amazon, allowing you to sell almost all types of digital products. Others, like Etsy, focus on homemade goods, while Gumroad is known for its music options (although it offers other digital products), and Teachable specializes in digital coaching or courses.

Step 5: Do a product launch

Now is the moment you’ve been eagerly waiting for: your first digital product launch. It’s been a long, hard road to get to this point, but more work must be done.

Step 6: Promote your products

Namely, you must advertise and market your brand and products to grow your audience. Depending on the eCommerce platform you select, you might have built-in advertising and marketing measures at your fingertips.

If you have room in your budget, you should consider your promotions, such as paid social media ads or PPC campaigns.

Step 7: Review analytics

How did your first digital product launch go? Hopefully, it was a rousing success, but the only way to be sure is to track the numbers. Here’s what to begin measuring:

Organic versus inorganic website traffic
Returning visitors
Time spent on page
Bounce rate
Unique visits
Total visits
Rate of qualified leads
Total customers acquired
Net Promoter Score
Total webinar/online course registrants
Total webinar/online course attendance
Return on advertising spend
Total sales-qualified leads
Total marketing-qualified leads
Cost per click
Cost per lead
Email open rate
Email click-through rate
Brand mentions
Social media follower rate
Engagement rate
Impressions
Reach
Branded keywords
Share of voice
Brand sentiment
Repurchase ratio
Keyword rankings
Conversions
Sales

Step 8: Make changes for improvement

Your first campaign will likely not be perfect, and that’s okay. You live and learn, or in your case, make mistakes and grow from them.

As you improve your future campaigns, you’ll strengthen your techniques, improving conversions and sales.

How to Create Compelling Digital Products

Of course, you don’t have to exclusively learn from trial and error how to create high-quality, engaging digital content that sells. You can always follow these pointers.

Identify your expertise

While sure, you could go straight for the cash cows of the digital goods world, targeting the products that will make you the quickest buck, which can sometimes be a mistake if you lack the expertise.

After all, you have to assume that your competitors chose that product because they know how to make it and get people to buy it. If yours is second-rate or lesser-than, you’ll never drive the sales you want.

Instead, you should consider what you’re talented at and skilled in when deciding where to start selling digital goods.

Stay abreast of your audience’s needs

Here’s the thing about audience needs: they change. You might understand your customers now, but what about six months or a year later? Audience research is not a one-and-done task; it’s something to commit to regularly.

If your products don’t continually meet your customers’ needs, they’ll begin seeking out other brands that might understand them better. In other words, they’ll fall right into the laps of your competitors, which is the last thing you want!

Determine the right pricing model

Pricing digital goods can be tricky. You don’t have to worry about shipping fees or processing, so how do you do it?

Well, it depends on the digital product. Some, like software, typically have tiered pricing plans. The most affordable plan has the fewest features, and the most expensive plan has the greatest features.

Alternatively, you could consider dynamic pricing, which determines the cost of your digital goods based on demand.

While you can omit the processing and shipping when pricing your orders, don’t forget about the small charges here and there that you have to pay to run a digital goods business. For example, marketing, advertising, and website hosting exist, so you need to offset those expenses.

Build a website

Speaking of website hosting, yep, you need a website. Even if you’re part of a major eCommerce network like Teachable, Amazon, or Shopify, I would recommend that.

Your website allows a potential audience to discover more about you and buy your products directly.

Offer multiple payment methods

While you might only be able to support several payment options initially, you should continually aim to expand the payments your eCommerce website accepts.

The more payment methods are available, the easier it is for customers to complete a purchase, which increases your bottom line and conversions.

Marketing Strategies for Digital Goods

Are you ready to gear up for growth? You can take your digital goods further through the power of marketing. Since digital marketing is so expansive and an omnichannel approach performs well with the average consumer, you should be ready to reach out across these touchpoints.

Content marketing

Do you want more lead gen? Of course you do. Since 51% of the content the average internet user consumes derives from organic searches, you need a good marketing campaign to connect with your audience.

There is no shortage of content types for you to explore as your eCommerce business grows. Here’s a rundown of the promotional content you can make:

Blog posts
Checklists
Infographics
Videos
Newsletters
Whitepapers
Podcasts
Case studies
eBooks
Memes
Guides

The key to successful content marketing is understanding your audience’s pain points and responding accordingly with your content. Relevancy is another trademark of high-performing content, which requires you to do keyword research to understand what your audience prioritizes when searching online.

Consistency is the third pillar of content marketing. Develop an editorial calendar so you can post regularly.

Content marketing can build your authority, brand recognition, and audience trust and loyalty, so it’s worth doing.

Email marketing

Email marketing is still very much alive and kicking in 2024. If anything, it will only continue to be paramount to marketers, as the number of email users in 2026 is estimated to reach 4.73 billion people.

The best part about email marketing is that you can reach customers and leads at any point in the sale funnel by tailoring email content to their needs. For instance, you can provide educational information for leads at the beginning of the funnel, encouraging them to make a purchasing decision sooner.

You can use email content to connect with existing, longer-term customers, driving their loyalty with referral programs, exclusive content, and VIP deals.

Social media marketing

As one of the biggest driving forces in today’s digital landscape, social media can make your brand more visible. You don’t need to make viral content or have a million followers to do it, either, even if that helps.

The keys to social media marketing success are not all that different from content marketing. You need to segment your audience and tailor your message to their needs. Keep your marketing message relevant and consistent.

Social media allows you to connect with larger swathes of your target market than ever, with an estimated 5.44 billion internet users worldwide in 2024. You can use it to build your brand and drive more sales, especially if your online store offers social commerce.

Let me fill you in if you’re unsure what I’m talking about. Social commerce allows consumers to purchase goods and services without leaving Facebook, Twitter, Instagram, or whatever social media platform they’re using.

It sounds like an excellent way to drive sales. That’s because, indeed, it is.

Contests and giveaways

You can always increase awareness of your brand and digital goods through a giveaway or contest. It’s a well-known fact that people like freebies, so offering them to your audience should get them to visit your website, subscribe to your email newsletter, follow you on social media, or whatever objective you’re trying to achieve.

Better yet, you can let new audience subsets try your digital goods.

Reviews and testimonials

How many testimonials does your eCommerce business have? What about reviews? If the answer is woefully few, you must change that ASAP. Reviews and testimonials are excellent forms of social proof, with 88% of consumers trusting them to the same extent as a personal recommendation.

Obtaining reviews is often as easy as just asking for them. Yes, seriously! If you send a follow-up email (and feel free to use automation for this) asking your audience to review the product they just purchased, they should be willing to, especially if you give them something for their trouble, like a discount code.

Events

This one might seem like a strange inclusion since we’re talking about digital events, but not really! You can attend in-person industry events and set up a booth with a QR code for potential customers to scan so they can learn more about your digital goods.

If not, you can look into hybrid or all-digital events, where you’ll surely be at home.

How to Protect Your Digital Goods

There’s this misconception among some people that just because a product is digital makes it worth less in the marketplace than a physical good. You can right-click and save an image, then voila, it’s yours without paying.

However, just because that’s how some people perceive it doesn’t mean that’s the reality. Your digital products are as real as anything in a store, requiring protection.

These tactics will help you get it.

Use watermarks

This tip only applies to digital visual media such as art and photographs, but watermarks are personal stamps that tell others you created the digital work.

Of course, unscrupulous people can remove or obscure watermarks, so they’re not a cure-all, but they’re better to have than not.

Copyright materials

If the digital good is original intellectual property, it should be copyrightable. Seeking a copyright over your IP makes you the rights holder. In that position, you can determine who can perform, display, adapt, distribute, or copy your work.

If someone violates the copyright law, you could take them to court. That doesn’t mean everyone on the internet will necessarily respect your copyright, but they should take it more seriously than only a watermark.

Institute download limits

Another good way to prevent people from getting too grubby with your digital goods is to set up a download limit. This will help you better understand who wants to use your products, although you could undercut your profits with this strategy.

Apply for licenses

Similarly, users must have a license to use your digital goods. The license should come with the customer’s purchase and be easy to set up. Some people might see the license requirement and scoff, so you could again hurt sales.

Use piracy protection tools

You should also do some digging into piracy protection tools. I like DLGuard, which provides secure sales and download links.

You can also use DLGuard to build membership sites or promotional coupons, so it has multiple uses outside of protecting your eCommerce business.

Challenges and Solutions

In addition to the risk of piracy, a handful of other issues could crop up as your eCommerce business grows. Of course, like every problem, there are solutions you can lean on so you can focus more on selling digital goods online.

Here’s what you need to know.

Market saturation

The very reasons that might have inspired you to sell digital goods are the same ones everyone else wants to do. They want low overhead costs and the freedom to create beyond physical limits. This can lead to a very saturated market that’s, dare I say it, perhaps oversaturated.

So, what’s a new eCommerce business to do? That’s simple.

You need to niche down. Targeting a niche market will help you avoid oversaturation. However, be ready to pivot, as sometimes even small niches can become bloated if too many eCommerce businesses catch on.

Competition

The competition will continue to grow in eCommerce, as its earnings seemingly have no ceiling, and data shows nothing but an upward trajectory. Besides, who do you think is oversaturating the market but your competition?

Again, niching down is the answer, but don’t stop there. You need to research your competitors to see what they bring. Next, evaluate what your eCommerce business can do differently or better to gain a clear advantage.

Low sales

Low sales are the worst, but they happen, especially if you’re new to eCommerce. Pinpointing the source of your disappointing sales is the most important part of the process but also one of the most difficult.

You need to dig deep into your analytics to find the culprit. Are you targeting the wrong portion of your audience? Is your audience not segmented enough? Did your marketing campaign underperform? Was it the product itself that’s just no good?

Once you can figure out where the trouble emanates from, you can make amends to make your next product launch more successful.

Spending too much on marketing and advertising

Whoops! We’ve all done this a time or two, but if you overspend too frequently, you’ll destroy any profits you could have made, as you’ll have spent them all. The solution to this dilemma is also simple. You need a marketing budget.

If you’re in B2C, the rule of thumb is to spend only five to 10% of your earnings, and in B2B, two to five percent.

Too long between products

When you exist primarily online, you risk the “out of sight, out of mind” attitude by your consumers. They need to see you to remember you exist. Email and content marketing will help, but you need new products regularly to keep people excited.

There’s such a thing as product overload, so instead of every month, maybe a few times a quarter (or even once a quarter). It’s better to take your time rather than rush through a product to say it’s new, especially if we’re discussing software, templates, WordPress themes, or apps here.

These things take time to test and work the kinks out before you unveil them. If you skip those parts of the process, you’ll have angry customers complaining about the bugs.

Conclusion

Selling digital goods online is an excellent opportunity to expand your income, especially considering the low overhead costs. However, you have to carve out your corner of the eCommerce world to have a chance to succeed, which means knowing your audience and your competitors and finding a niche all your own.

Leveraging the digital landscape to innovate and profit is key!

EngageBay is an all-in-one marketing, sales, and customer support software for small businesses, startups, and solopreneurs. You get email marketing, marketing automation, landing page and email templates, segmentation and personalization, sales pipelines, live chat, and more.

Frequently Asked Questions (FAQ)

1. What are digital goods?

Digital goods refer to any products that only exist in a digital space, such as webinars, digital art, eBooks, online courses, and WordPress themes.

2. How do I price my digital products?

You can follow a cost-based (based on what it costs to make and distribute the digital product), value-based (based on what you believe the digital product costs), or competition-based pricing strategy (based on what your competitors charge) when selling digital goods.

3. What are the best platforms for selling digital goods?

eBay, Amazon, Etsy, and Shopify have the most name value, and better yet, these platforms are great for all sorts of digital products, not just one or two types like some other platforms.

4. How can I protect my digital products from piracy?

Copyrighting your digital products, requiring a usage license, limiting the number of downloads, and using anti-piracy tools will help safeguard your work.

5. What are effective marketing strategies for digital goods?

You should use email marketing, advertising, social media marketing, and content marketing to expand your audiences and lead flow.