Digital Product Creation Business Model Explained

​What is Digital Product Creation?

Digital product creation is the process of creating non-physical products which customers can download from your website or a digital marketplace dedicated to products of this type.

For many years the only type of digital product sold online was the eBook, but times have changed, and now digital products can include video tutorials, software products, smartphone apps, digital templates, Kindle books, audio tutorials, stock photography, stock audio tracks, or any other type of content that can be produced in a digital format.

Example of digital products to sell onine

This type of online business model is often viewed as the most profitable online business to operate because you create a product once and then sell it to thousands of different customers all over the world.

This means that once you’re finished completing your digital product that you’re now free to focus on marketing that product to your audience, and possibly even creating new digital products to complement it.

Digital products can create passive income streams for any budding digital entrepreneur, with almost unlimited income potential possible for the right product in the right market.

These types of products can be created quickly, and at a very low cost (if you know what you are doing).

How Digital Product Creation Works

Everyone has a skill or area of expertise you can teach to others, and that other people want to know about. This can be something as mundane as your favorite hobby, as complex as relationships, or as popular as how to lose weight and keep it off forever.

Years ago you might only be able to share this knowledge with other people through direct mail video or printed products, or via evening classes.

The age of the Internet means that digital products allow you to solve other people’s problems from the comfort of your home, and they get the answers to their particular questions almost immediately, and in a format they can use on their home computer, or even on their smartphone.

A digital product can take many forms, with the following being the most popular:

  • eBooks/Kindle books
  • Software products
  • Games or apps for smartphones
  • Themes for WordPress, Joomla, etc
  • Video and audio products
  • Downloadable templates or content
  • Stock photographs
  • Doll Dress Patterns
  • Chicken Coup Plans

The beauty of digital product creation is that once you’ve created your product it can go on making money for you for years to come.

It also gives you the opportunity to create additional products for your existing customers, generating even more income without having to do any additional marketing.

Digital products are, generally speaking, easy to create, cost almost nothing and are potentially one of the best ways to generate a full-time income with an online business.

How to Make Money from Digital Products

The first step in creating a successful digital product is to research your market before you do anything else. If we look at the example of downloadable knitting patterns this is a market that might be profitable for you.

Looking at the example of a golf product on how to improve your swing, we can guarantee that the right product in this market will be profitable.

Never assume that a particular digital product will be successful because you think it’s a great idea – a market either exists, or it doesn’t, and if you create a product for a non-existent market you won’t make very much money.

Once you’ve established that a market exists for your product you then need to go about creating it. This can be as simple as putting the information together in Microsoft Word and then compiling it as a PDF file, or you might take the route of interviewing several experts on a particular topic and then assembling that as an audio product.

Focus on quality more than quantity, and always aim to answer the most burning questions in any given market.

When your digital product is ready you have the option of either selling it directly from your own website or using a digital marketplace such as ClickBank or Udemy.

There are pros and cons to each one, but beginner digital product marketers can simplify the process by using a company like ClickBank, or another digital marketplace.

They do all the hard work for you, and can also save you a lot of money in the early days of your digital product business.

Udemy is designed specifically for those of you interested in creating video tutorials, but they’re a great example of what can be achieved by relatively new product creators in a very short space of time.

Most digital products will use a certain amount of free content to attract visitors to a site, either through paid marketing or free search engine traffic. Once your audience experiences the quality of your free content this is the perfect opportunity to ask them to subscribe to your mailing list.

You can then actively market to these subscribers via email until they either decide to purchase your product, or unsubscribe and look elsewhere.

How Much Can I Make from Digital Product Creation

A successful digital product has almost unlimited income potential, and there are dozens of examples of successful digital marketers earning millions of dollars each year from products they released several years ago.

These examples span across individuals selling products directly from their own websites, or through digital product vendors.

Selling directly from your own website means you pocket every cent of the profits, whereas using a third party vendor means you’re splitting your profits with them.

How much money you earn will be decided by the market you create your product for, your pricing structure, and if there’s any way of generating additional income from people who bought your first product i.e. can you create a new product that they’d be happy to purchase from you.

What we can share is that the most successful digital product creators earn at least US$1,000,000 per month online (yes, that is one MILLION), and have been doing that now for several years.

Bear in mind that the launch of your product can be the difference between total success and absolute failure, which is true of any product in the history of marketing.

Examples of Digital Products

3WeekDiet.com

3weekdiet - weight loss digital product

The weight loss niche is one of the most profitable in digital marketing, so if you have a unique product idea for this market then it’s worth doing more research on it. 

This ​particular product has been one of the top-selling diet programs on Clickbank for over a year and I’m sure the owners are pulling in over a thousand dollars a day.

As you can see from this website it’s full of testimonials from people who have purchased the product and want to show off their new figures, encouraging even more people to buy this PDF-based product.

Type2DiabetesDestroyer.com

Clickbank offer that makes alot of money

This is another digital product (PDF format) that is marketed on Clickbank. It sells for just $37, but we’re certain that it’s generating several thousand sales each month because it’s answering a specific need for people who are willing to do almost anything to improve their health.

The obesity epidemic in the western world has led to millions of new diabetes sufferers who are desperate to find a solution that doesn’t involve injecting themselves with insulin each day.

PaidSocialMediaJobs.com

Make Money Online digital course

Who wouldn’t want to stay at home and earn money by fooling around on Facebook, Twitter, and YouTube all day?

The employment market is volatile right now, so more people than ever are looking for ways to earn some extra income from home, maybe even replacing their day job in the process.

Making money online has always been, and will always be, one of the most popular markets for digital product creators, but do bear in mind that it’s a saturated and highly competitive market and full of outdated junk! 

This is not a recommendation!

I don’t know anything about Paidsocialmediajobs.com, but I would not recommend buying it as your actual earnings will probably be nowhere near the $700 the single mother in the sales copy made.

You are more likely to make several dollars a day from something like this.  Spend your time building a REAL online business instead​.

Pixiefaire.com

Site that sells digital downloads of doll patterns

Pixie Faire runs the Internet’s largest marketplace for doll clothing patterns, featuring more than 50 indie designers, as well as online training courses on design, sewing, pattern-making, and craft business. 

If you think that doll clothing patterns isn’t a niche you could really make a lot of money in, you would be wrong. In fact, Pixie Faire make around $600,000 per year selling their digital products! 

Getting Started With Digital Product Creation

Here is what you will need to set up and sell your first digital product:

Website

Creating your very first digital product will require that you have a website of some kind, and ideally one hosted on your own domain.

You can buy a domain name at Namecheap for around $10.00.  

For hosting your website I would go with Bluehost. They have hosting plans starting at $2.95 a month and that should work fine until you start getting a lot of traffic. 

Now that you have your domain name and hosting package you will need to set up your website.  

Just use WordPress – it is an awesome platform, it’s free, and super newbie-friendly. Bluehost provides one-click WordPress installs so setting up your website can’t get any easier.

You will also need a WordPress Theme to make your site look nice. The stock WordPress theme is boring as hell and no one in their right mind uses it. The theme you choose will vary greatly depending on what you are selling, and how you are selling it.  

Three of my favorite themes for selling digital products are Digital Pro, Altitude Pro, and Showcase Pro. They are all made by Studiopress and cost $99.95 each.

Product Creation

One of the most important things you’ll need is an idea for a product. The best way to find one is to research markets where digital marketers are making a lot of money, and look for a gap in that market you can fill.

Product research can’t guarantee success, but it can help you avoid the failure of creating a product nobody wants.

Once you have a killer idea you need to actually create the product. The easiest and most popular format for digital products is an Ebook. You can write the book in Microsoft Word (or a free alternative) and then export it as a PDF.  

If you don’t want to write the eBook yourself you can hire someone else to write it for you on Upwork.com, Freelancer.com or Fiverr.com.  

Ebook lengths range from 10,000 – 50,000 words depending on the topic.  You should plan on spending .02 cents per word for a halfway decent writer. 

Selling It!

You will also need some sort of sales copy to convince people to buy your product. Hiring a professional copywriter can be VERY expensive!

One of my friends just paid $7,000 for sales copy for his VSL (Video Sales Letter)​ – but he made that back in 2 days after launching the product so it was well worth it.  

If you know the topic, and your target market I would try writing this yourself. There are several great courses on how to write sales letters and I have included them below in the Training Material section. 

Taking payments from customers will be handled automatically if you choose to use a digital product vendor like ClickBank or Udemy. But, if you’re planning on taking payments directly on your own website you’ll need an eCommerce solution which can integrate with PayPal.

Email Marketing Tools

My friends who own digital products make around 50-60 percent of their profits from their email lists, so setting up an autoresponder from the get-go is a MUST!

ConvertKit is hands down the best autoresponder for this business model, but if you want to start off a little cheaper GetResponse is great too and will certainly get the job done.

Best Digital Product Training Courses

This is a pretty complex business model with many moving parts so I would definitely recommend investing in some sort of training before you dive in head-first. I have listed my favorite courses below:

Clickbank University

Clickbank University does a very good job of giving you an overview of how to create and sell digital products on Clickbank. The modules are well laid out and are very slick and professionally put together.

The training is $47 a month and if you buy it you will be offered a massive amount of upsells. They are a bit annoying, but one of the things they will teach you in this course is that you make most of your money from upsells and downsells when selling on Clickbank, so I guess they are just practicing what they preach.

I’m not sure if any of the upsells are any good, so you will have to make that call yourselves. Just remember that you have 30 days to get a refund on ANYTHING you buy on Clickbank. So, there is very little risk of getting ripped off here.

One important thing to note – this course is owned and operated by Clickbank, so don’t expect any juicy, insider secrets here. Would you expect Google to tell you how to game their search engine?

Nope!

If you want to get insights from a guy who has been in the trenches, selling on Clickbank for the last 10 years then take a look at Day Job Destroyer below.

Day Job Destroyer

Day Job Destroyer was created by a good friend of mine named Rob Wiser. Rob was one of the first Internet marketers I met when I moved to the Philippines way back in 2010. We hit it off right away because we both had very similar backgrounds in the film industry.

Back then Rob was absolutely killing it with a line of digital products, most of them in the Men’s Dating space. In the last 9 years, I’ve witnessed Rob break into multiple niches with his digital products, and make big bucks in all of them.

For the past six years, Rob has been an elite Platinum-level member of Clickbank.com, the world’s #1 marketplace for digital products. This means he was in their top 1% of earners!

So, yes… Rob Wiser is the real deal and the information locked in his brain is priceless.

I’m still kicking myself for not diving headlong into Digital Product Creation while I still had Rob here as a mentor and drinking buddy.

Alas, Rob has since moved to Thailand with his hot Filipina fitness model girlfriend – but he was kind enough to send me a copy of Day Job Destroyer – which I loved. The course is not as slick as Clickbank University, but the information is pure gold.

Since I used up so much space here talking Rob up, I think I will just let you go on over to his sales page to see what the product is all about.

Even if you aren’t interested in buying the product, his sales page does a great job of explaining the real-world benefits of the digital product creation business model, so it is worth looking at.

Fast Path to Cash Product Creation System

Digital Product Blueprint is an awesome course, but I totally get that many of you can’t afford to shell out $1,997 at this stage in your online careers, so, I spent the last couple hours searching the web, trying to find an alternative (cheaper) training course.

I was thrilled to come across a new course by my all-time favorite Internet Marketer John Barker – formerly known as “X”.  It was his affiliate marketing course, Affiliate Black Book, that was responsible for the online break-thru that allowed me to quit my job and go full time online.

This guy is the real deal. Here are the kind of comments he gets when he puts out a new product…

“X – You didn’t even need what little sales copy you have. Next time just put up a buy button. Can’t wait to take a look at this one.​”

That was from The Warrior Forum and it perfectly reflects my sentiments about Mr. X – which is why I have no problem recommending this course even though I haven’t bought it yet.  

The course is called Fast Path To Cash Product Creation System and it looks like the main purpose is to help newbies get a product up for sale as fast as possible.  I’m sure it’s gonna be Awesome!  And if it’s not, there is always the 30-day money-back guarantee!

Udemy Courses

If you’re not familiar with Udemy, it’s a website that allows you to sell your online courses. Your digital course is added to the Udemy library where visitors can choose to purchase your course. Udemy takes a percentage of the sale.  

While I’m not a big fan of selling my digital products on Udemy, I do think that they have some pretty legit online training courses for a reasonable fee.

Please be aware that I did not purchase these courses – I am just going by the preview materials, customer reviews and the table of contents of the courses.

So, here are 2 that look pretty good and should teach you the basics of Digital Product Creation:

2-Hour Digital Products: Learn How to Create & Sell Online Online Business Create & Sell Your First Info Product

How Long Will it Take to Make Money with Digital Products

There are a lot of factors which come into play with how quickly you can generate money from a digital product business. If you have a successful launch in a waiting market then you can generate thousands of dollars overnight. The biggest product launches in digital marketing history generated over $1,000,000 within 24 hours of the product becoming available.

Another deciding factor is whether you rely on free search engine traffic from Google or Bing, or you choose to use paid advertising via Google AdWords or Facebook, for example. Using paid marketing means that you can generate income almost instantly.

Pros/Cons of Digital Product Creation

Pros of Digital Product Creation

  • You never have to keep stock of your product because it’s digital
  • A single digital product can generate income for several years
  • You can create additional products for the same market
  • There’s a very high profit margin in digital products
  • Digital products can go hand-in-hand with authority websites
  • There’s very little technical knowledge required
  • You can outsource the product creation and marketing
  • Digital products can be created quickly using a variety of methods

Cons of Digital Product Creation

  • There is no guarantee that your product will sell, even in the right market
  • You will need to market your product extensively
  • You will need to hire a copywriter to create your sales letter/video
  • Refund requests are part of running a digital product business
Scroll to Top

Which Online Business Model is Right For You?

Take The Quiz

8 Questions -100% Free - 2 Minutes