How To Start A Digital Product Business

Published by Owolabi Abdulmujeeb A. on

Digital products cannot be handled, tasted, or touched. Everyone consumes them—from music to films, ebooks to online courses, and everything in between.

Due to their popularity and ease of distribution, many entrepreneurs construct businesses around these intangible things or develop digital products to sell alongside the physical items or services they provide.

How to start a digital product business
How to start a digital product business

Learning how to sell digital products is appealing because they can create once and repeatedly sold to different customers without replenishing inventory, making them ideal for creatives, bloggers, educators, and freelancers looking for low-effort ways to make money online.

What are digital products?

A digital product is an intangible asset or piece of media that may be sold and disseminated multiple times online without the requirement for inventory replenishment. MP3s, PDFs, movies, plug-ins, and templates are typical examples of digital files downloaded or streamed.

Examples of Profitable Digital products

So, what kind of digital product should you sell?

Most digital items are instructive (teaching people how to do something) or entertaining (entertaining people). You can employ a variety of delivery models once you’ve decided on a topic and what you want to sell.

Here are a few of the most common:

  • Podcast (Joe Rogan – $30 million before Spotify deal)
  • Ebook ($45,000; Carol Tice)
  • Online Course ($1 billion)
  • Newsletter (The Hustle – $27 million)
  • Subscription Content (Bloomberg, New York Times)
  • Premium Video ($30 billion) (Netflix)

While some of these types of content are usually free, many people prepare to pay for them if the content is of much higher quality or is unique.

Numerous consumers are willing to pay for premium newsletters even though many free newsletters are accessible.

How do Digital Products Come to Life?

I’m happy you inquired. Every digital product begins with a concept; this is the foundation. And while we all have ideas, we don’t always know how to turn them into reality. Three key phrases bring a digital product idea to life before a single line of code is written: Ideation, Research & Planning, and Design.

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In this article, I’ll go over each of these phases and the roles that each one plays, using an example that even a grade 10 kid can relate to improving the elementary school lunch process.

Step 1: Ideation

“I have a digital product idea for schools who wish to make the lunch ordering process easier and faster,” for example.

If you don’t clearly define a market for your digital product, it won’t work. If you don’t, you’ll be stuck with a rudderless product that won’t sell and won’t meet the needs of your customers. During this phase, people frequently dig into a prototype or build convincing mockups to include in a sales or pitch deck. Your original prompt will confirm by creating user personas, buyer personas, and their needs, wants, and pains once a target market has been determined.

There are several key roles to be played.

  • Product managers are essential in assisting in prioritising the most critical areas to concentrate on.
  • Product researchers and product managers will collaborate to identify your market and stakeholders, useful in the next phase.

Step 2: Research & Plan

“We should speak with teachers, students, parents, cafeteria staff, and administrators to learn about their needs, wants, and pains,” for example.

If you don’t base your features and design on real-world facts, feedback, and research, you’ll end up with a product that may or may not meet the users’ needs. What’s on the line? A priceless, unusable, and unmarketable product.

Start with a solid concept and thorough study to avoid creating or developing a product that will not sell. It is the stage where you start to filter down the outcomes of your brainstorming session.

How to start a digital product business
How to start a digital product business

There are several key roles to be played.

  • Following up on ideation, product managers assist in aligning research with larger corporate objectives.
  • The value of well-trained researchers cannot overstate. They make sure that your questions aren’t leading, that your sample sizes are correct, and that the results are both confirming and surprising.
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Step 3: Design

“This app should provide food alternatives, take orders, organize by grade level, allow for adjustments, and so on,” for example.

Dream up and visualize everything your app could accomplish, then create a minimum viable product (MVP) for everything it should do initially. These processes assist you in communicating the large picture, while an actionable strategy allows you to be resourceful and evaluate viability rapidly. If you don’t prioritize, you’ll end up with a “Frankenstein” solution that doesn’t answer the user’s defined needs, wants, or pain points.

There are several key roles to be played.

  • Product managers create early roadmaps to guide short- and long-term development.
  • Product designers turn study findings into eye-catching idea designs.

These three processes, of course, lead to product development, which is supported by product branding and marketing efforts to convey your product’s story in a way that will resonate with the target audience. But that’s a topic for a different dinner table discussion.

Sales and Marketing Tips for Selling Digital Products

Keep these pointers in mind whether you’re starting a new business or adding online digital products to an existing one:

  • Make a fantastic product. The primary criterion for developing digital products is that they must bring value to your customers’ lives. Because you’re up against free stuff on the internet, invest in creating a product that customers can’t get anyplace else.
  • Make use of a lead magnet. Create a light version of your product for free, regardless matter how much it costs. A free product can aid in the development of an email list to which you can sell in the future. It also allows for upselling and retargeting of potential clients through various promotions. Free establishes a relationship of trust between your company and potential clients.
  • Begin an affiliate marketing program. For producers offering digital products, affiliates are a significant source of traffic and sales. Find influencers in your business who are well-known and reputable, and pay them a percentage for each sale they make. You may set different compensation rates for other affiliates, so if someone has a large following, you can give them a more significant commission rate to encourage them to market more and bring in more consumers.
  • Collect pre-orders. Giving a discounted “early bird” price is a terrific method to generate early sales. If you’re launching a new digital product, you can provide the first 100 purchasers with a 50% discount, give the following 100 buyers a 25% discount, and then sell the product at a total price once the 25% discount expires. To reward their loyalty, collect feedback, and boost pre-launch sales, you can only offer a 50% discount to your existing audience.
  • Offer a money-back guarantee. It’s understandable if you’re afraid to offer a warranty on your products. Some consumers may purchase and utilize your product before requesting a refund. But it’s all part of the package when it comes to owning an online business. The benefits of increased conversion rates outweigh the tiny number of people who would try to take advantage of the program. A money-back guarantee demonstrates to potential purchasers that you’re willing to put your money where your mouth is and that you’re taking the risk, not them.
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