How to make money on the side by selling digital products

Who wouldn’t want to earn extra money on the side, especially in crisis times? Even better if it’s mostly passive income and you can do other things while money is flowing to your bank account. Sounds too good to be true? Well, it’s totally doable and anyone can do it – but it’s no “get rich quickly” scheme. It takes upfront work. It takes learning. But don’t worry, I’ll help you get started and shorten the time to your first digital products sales as much as possible. Let’s start from the beginning.

What is a digital product?

I’m sure you know e-books. You stream music on Spotify, watch movies on Netflix and maybe listen to podcasts on your way to work. In today’s world, you get in contact with digital goods daily. A digital product is a product that only exists digitally. It’s intangible. So you already know plenty of digital products, but I’ll introduce you to some more later on. But first, let’s compare digital products to physical ones.

Digital products vs. physical products

There’s a bunch of obvious advantages digital products have over physical products:

No shipping! All your customer needs is a somewhat stable internet connection. If they have found your product online, that’s probably a given.
Instant delivery. No shipping also means you can deliver right after the buyer paid. People love to get their products right away.
Sell worldwide. You can sell digital products globally without worrying about shipping costs, import taxes or local post office reliability. I live in Switzerland, which is a very small country – but I can sell worldwide.
Sell 24/7 365 days a year. Your shop can be always open. I make most sales while I’m soundly asleep in my bed. It’s an awesome feeling to wake up and see some overnight sales.
Passive income. You’ll have little work other than the upfront one. You can create great passive income streams with digital products, especially if you automate most of your processes. Sometimes you need to answer messages and give some customer support. But if you’re smart, you can reduce that to the minimum.
No inventory. You don’t have to stockpile items in your flat or pay for expensive storerooms. All you need is some space on your hard drive. Or a few hard drives. Please, people, do yourself a favor and make sure you have backups.
No damaged products. Digital products can’t get damaged. Customers can lose the downloaded file, yes, but then they can just redownload the file and it’s all good.
No returns. Well, you can accept returns. But in most cases, it does not make sense to accept returns.Not accepting returns for digital products is the default for any digital downloads marketplace.After all, you can’t check if the customer actually deletes the files when they get a refund. It’s digital, you bought it, you keep it. Of course there can be exceptions if customers expected something completely different than what they got. But it’s usually up to you if you want to refund.
Low cost to create and sell. Creating digital products usually has little to no upfront cost or risk. You can start selling online for free.

There’s no cost for product inventory you will sell later. You can pay someone to create a digital product for you, but you don’t have to. It’s perfectly possible to start creating digital products with zero budget. I know I did. There is a lot of free software and platforms to sell which will only take a cut once you’ve actually sold a product.

Even if you go for a paid platform, it should still be relatively cheap. Think about all the brick and mortar businesses and the amount of startup capital they need! You don’t need any of that. If money is an issue, there’s no excuse for you to not start selling digital products.
And my personal favorite: Do it once, sell forever. Because you can indefinitely sell copies of your digital product, you never run out of inventory. If there is a sudden hype about one of your products, you can take full advantage of that – unless the page breaks down because of too much traffic, of course. I love this.

Of course, your product can get outdated, but in most cases, you can sell work you’ve done once for years. Or you can update the product once in a while with little effort and keep it fresh. You can create digital assets that will make you money while you sleep.

But there are also a few drawbacks to digital products:

Anyone can do it. This is also an advantage – You can do it! But as a disadvantage, literally everyone could create a digital product, and many do so. It’s becoming more accessible with new tools and platforms every day. That means there’s a lot of competition out there. You will probably read and hear “the market is already saturated” a lot.
However there is always another opportunity to find a good niche, new demands will surface with new trends, innovations and types of digital products becoming popular.
Lower perceived value. Digital products have a lower perceived value because they are intangible. For most digital products, people will only pay a few dollars, and if you sell on marketplaces, your margin is not that high or you pay a lot of fees. Because there’s usually also competition, you need a lot of different digital products to make a decent income. So be warned – this is not a quick way to get rich.
Your digital products are easier to copy than physical ones. Depending on the product, it’s super easy. Sometimes people copy the whole product listing including YOUR pictures. Some people don’t even know that it’s against the law to do so. It’s on the internet, so you can do whatever you want, right?

How to create a digital product

If I got you interested in selling digital products, you’ll probably want to know how to create your first one. The process can be refined for different types of products, but here’s a good basic process that should work for any digital product. I’ll go into more detail on all the points in further blog posts, so stay tuned!

Assess your skills and talents
Find a skill you can leverage. I would personally recommend something you like doing.

If you are just in for the money, that’s fine too. In that case, pick something you are really good at and that allows you to create digital products quickly. Selling digital goods is not a “get rich quickly” thing though – it takes a lot of upfront work and time to get first sales. Even if you did everything right it can still take time for algorithms to pick up your product and show it to people. I noticed that on Etsy, I need to wait for at least a month to be sure whether a product sells or not, unless there is almost no competition and very high demand.

You can pay someone to create products for you, but you still need some skill or knowledge to decide on what to create and give specific instructions. If you’re not sure what you’ll like to do, try a few different things and create a few quick product drafts to get a feeling of whether you want to do that or not.
Pick a product type you can create that matches your skills and talents
Find some kind of product you’d like to create (e.g. e-books, online courses, coloring pages…). Preferably you know how that product works. Make sure you’ve taken an online course at some time if you want to create online courses. If you want to sell planner pages, you should have at least used any.

No idea what you could sell? Find some inspiration in this list of digital products to sell online.
Find a problem your product can solve.
There must be a reason for people to buy your product. If it solves a problem for them, that’s a very good reason to purchase it. The bigger the pain of that problem, the better.
Find a niche for your product and do a lot of research.
You’ll need to aim your product at specific people. People are much more likely to buy something from you if they think that is was created just for them. Nobody gets excited about generic mall products.

Investigate different niches and find out how many people are in there. You might find an interesting topic, but it’s so special, there are only a few thousand people worldwide really excited about it. You’re going to need a much bigger market than that.

Once you decided on a niche, you will also want to dive deep and become very familiar with it. Join Facebook groups, go through the whole Reddit section about the topic and, if possible, talk to people who belong to that niche.
Find out where to sell and set up your seller profile or shop there. You don’t necessarily need a brand/logo etc. for all the platforms, but you should take the time and create it. It helps customers to trust you. If you’re confident that you can drive traffic to your own website or shop, that’s even better. Remember that when you sell on a marketplace, you’re at the mercy of that company and its search algorithms. They can shut you down any time if they feel like.
Write the required copy to sell your product. At a minimum, you will require a good product title, a product description and tags. Do more keyword research and good copywriting.

Don’t forget to research the marketplace where you want to sell for keywords for your product. Unless you want to drive all traffic to your product yourself, people need to search for your product on that marketplace. If they don’t, reconsider your product or marketplace choice.

I used to write descriptions and tags after I created the product. Then, often when I created the listing, I realized that my product was missing important features. So doing your research BEFORE you create the product will:
- Force you to find out what the product should do. What’s the benefit your customers get? Why should they choose your product over competitors?
- Make it easier for you to create the product because you already have a detailed description of what it is and does. You can then just go and create it.
Create your first digital product
- If you decided that you want to pay someone to create it for you, find someone and give them the necessary, very detailed instructions. That’s easier if you did step 5 already.
- Try software / decide for one: Maybe you already know software to create the product with; If not, you will need to find one and learn it. There is a free option for almost everything, though I find it worth paying for the adobe suite for professionalism and convenience.
List your product.
You’ll need the texts you wrote in point 5 and images that will sell your product. The pictures you create for your listing will be crucial to whether your product sells or not, so make sure they are very enticing and professional. They need to be absolutely click-worthy, especially the first primary pictures that people will see first.
Market your product: If you sell your product on a marketplace, you might get organic sales without doing anything. It never hurts to get some additional traffic though! Don’t pay for traffic until you know how to get free traffic. If you have your own shop, you’ll need to make all the efforts to drive traffic to it. Pinterest, Instagram and Facebook are a good point to start, and you will need to learn a lot about SEO for Google.
Be patient and keep going. You have to expect failures and you might need multiple tries with different products until you get your first sale. It took me years to be able to create a product that’s going to sell with a 90% certainty, and it still does not always sell as much as I thought it would. Stick to it, keep hustling! Most platforms favor sellers with more than one product and a lot of activity, so after you created your first product, create more. It also builds trust with potential customers if they see that you have multiple products and upload new ones regularly.
Get excited like a little child when the first sales trickle in and tell everyone about it
Don’t annoy people though, at some point they’ve heard enough about how you made a few dollars online. Stay reasonable. But celebrate your success and use the momentum and motivation it will give you.
Create more products, explore, experiment!
Selling digital products is all about learning, creating, experimenting, analyzing and then applying what works.

So that’s it – now get to work!

If you have any questions, let me know in the comments! As I mentioned, I will go into more detail about everything in future blog posts, and I’m happy to write about topics you want to know more about.