From SaaS startups to marketing agencies and ecommerce websites, the internet presents an endless amount of business opportunities with reasonably low barriers to entry. An entrepreneur’s dream, if you will.

What’s even more jaw-dropping is that many entrepreneurs are finding great success in selling products on the internet that their customers can’t even touch, feel, smell or taste. Due to the popularity and ease of distribution, many entrepreneurs have built successful businesses around these intangible goods.

Are you ready to use this lucrative business model to generate passive income? Or maybe you are hoping to add a revenue stream to an existing business model? If so, you have come to the right place.

This guide walks you through the steps to bring your concept to life, from identifying the right idea to successfully launching it. Get actionable, clear steps to make your digital product a success—one that meets real needs, stands out in the market, and keeps customers coming back for more.

Let’s dive in.

What is a digital product?

A digital product is an intangible item delivered online. The most common digital products are digital goods, but they can also include access to a service or software.

You can sell digital products on a pay-per-download basis, like movies on Apple TV or ebooks on Amazon. You can also sell digital products through subscription plans, where users pay a certain amount per month to access a product like TV shows on Netflix.

Because there are no inventory or shipping costs, selling digital products can be an inexpensive way for entrepreneurs to start a business.

Some other benefits of selling digital products include…

>> Access to a global market

>> Lower overhead costs

>> Higher profit margins

>> Automated delivery

Let’s look at some popular types of digital products sold on the market today.

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Online courses

Online courses are an excellent opportunity to teach others new skills. They often require upfront preparation, such as creating a guide, or presentation, or recording a video walk-through.

You can create an online course on how to cook, how to build a website, or how to grow a successful vegetable garden. The sky is the limit.  An online course is a perfect way to build your email list or create an additional revenue stream.

For example, the Write of Passage is an online eCourse that teaches you how to write online and harness the power of the internet.

Downloadable Content

Downloadable content is also known as “digital goods” or “digital assets.” These products can be anything from photos, audio recordings, PDFs, PowerPoint presentations, and even video games.

Take Epic Games as an example. Their free battle royale video game Fortnite has built an audience of more than 80 million monthly active users. Talk about a massive following. But how do they make any money if the game is free?

That’s where downloadable content (DLC) shines.

Another example of downloadable content is design templates. A design template is a ready-made way for everyday users to create marketing materials and other branding elements. These templates are customizable, but they can also come with preloaded content like logos or wording.

People who use design templates tend to be less experienced designers or marketers. They might want to save time creating their designs and find the cost of hiring someone else prohibitive.

Take Freepik, a company that specializes in digital design products, for example. They drive users to their website by offering free vector graphics. Yes, these vector graphics are free to use, and that’s the point. The free use drives potential new customers to the paid content.

This freemium model allows users to test out design products before investing entirely. After returning a few times, they trust the product and are willing to pay the nominal fee to upgrade to the premium templates for more complex designs.

Memberships

Memberships are also a popular digital product and with good reason. They’re a great way to build your audience, capture their attention, and keep them coming back.

You can create a more intimate relationship with your audience by giving them exclusive access to your content through memberships. You can choose how often they get access, what kind of content they’ll be able to see, and how much they’ll pay for it.

Memberships can also be spawned from physical products. Peloton has built a passionate fitness membership community with almost 1 million digital subscribers. The app is home to a variety of fitness content, from strength training to boxing and, of course, cycling. 

The great thing about the membership model is that it generates monthly recurring revenue. Nothing beats a constant revenue stream.

Start with a Great Digital Product Idea

Your Own Passions & Interests

Creating a digital product starts with the right idea. A well-chosen idea focuses on solving problems that people care about, ensuring your product is both needed and valued. Think about your own skills, hobbies, or interests that could translate into a digital product. High-demand, low-competition niches offer ideal spaces to explore; the key is to find something you’re passionate about that also fills a gap in the market.

Your own enthusiasm for the topic will keep you motivated, and your focus on real audience needs will help ensure your product resonates with the right people. Let’s start with the steps to make this happen.

Explore Market Trends

Start by researching what’s trending. Market trends reveal which topics are popular and which areas are underserved. Use tools like Google Trends to gauge interest in keywords related to your product idea. Look at what’s popular on social media, and pay attention to any gaps in available digital products. High-demand, low-competition products are the sweet spot, offering the best chances for success.

Surveys are another great tool. Create surveys or use social media polls to find out what your target audience cares about most. By understanding what people want, you can focus on a niche that aligns with their needs and your product’s potential.

Solve a Real Problem

The best digital products solve real problems for people. Start by asking yourself, “What can I help people accomplish or improve?” Conduct research to understand your audience’s pain points, and look at existing products to find any gaps you can fill. Read customer reviews of similar products to see what’s missing or could be improved.

When you create a product that addresses these needs, it immediately gains more appeal. Keep your target audience in mind and refine your product based on their feedback. This way, you’ll end up with a digital product that’s not only valuable but also likely to succeed in the market

Narrow in on a Vision

A good vision statement should be clear and concise, and it’ll help you stay focused on what you’re trying to achieve.

Choose one digital product you want to create by focusing on solving pain points and providing value to your consumers.

Conduct Market Research and Analysis

With a solid idea in place, conduct market research and analysis to prove your concept. Is there room in the market for your product? Market research is essential for understanding customer behavior, preferences, and trends. Without it, you risk creating something that doesn’t resonate with your audience. Use this step to get a clear picture of your potential customers, the challenges they face, and the solutions they’re looking for. This information helps you develop a product that truly fits the market.

Market research also reveals opportunities and gaps, so you can tailor your product to fit specific needs. Thorough research now will save you time and help your product gain traction once it launches.

Leverage Google Trends to see what people are searching for online. This free tool provides insightful data such as the average monthly search volume over time, related topics and queries, and top searches by region and device.

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Identify Your Target Audience

Knowing your audience is key. Create a detailed profile (or buyer persona) that includes your target customer’s demographics, job title, and the challenges they face. Personalized surveys are a great way to gather insights directly from potential customers and ensure your product hits the mark.

With this understanding, you can create a targeted marketing strategy that speaks directly to the right people. A strong positioning statement, based on this research, will help your product stand out from competitors and attract a loyal customer base.

Analyze Competitors

Don’t sleep on your competition. Use your competitors as guinea pigs to learn what’s working and what things to avoid. 

Competitor analysis helps you see what others in your space are doing well—and where they’re falling short. Study their products, read customer reviews, and note any common complaints. This feedback will guide your product improvements and help you position yourself to fill those gaps.

By taking the time to understand your competitors, you’ll be able to offer something unique and valuable that gives customers a reason to choose your product over others.

Plan Your Digital Product

Once you’ve identified your idea and audience, it’s time to plan. Effective planning streamlines the creation process and avoids costly trial and error. Set up a product roadmap to keep everyone aligned and establish a clear timeline. Having a solid plan from the start makes the entire process smoother and helps you stay focused.

Outline Your Product’s Features

Think through the specific features and benefits of your product. What will it include? How will each feature add value for your audience? Listing these out creates a clear roadmap for development and helps you prioritize what matters most.

Continuous improvement is key. As you develop your product, gather feedback and adjust features as needed to keep your product relevant and useful.

Set Clear Goals

Clear goals keep your project focused and purposeful. A product roadmap aligns these goals, sets a timeline, and helps prioritize tasks. These goals ensure every step contributes directly to the product’s success, making the entire process more efficient and organized.

Create Your Digital Product

With your plan in place, it’s time to build. Digital products have unique advantages: they don’t require physical storage, are easy to deliver, and can generate passive income for years. Design elements like illustrations, fonts, and layout all impact the user experience, so pay attention to details.

Automation tools help manage various aspects of digital product sales, keeping overhead low and allowing you to focus on refining the product and delivering a great experience for customers.

Develop a Minimum Viable Product (MVP)

An MVP (Minimum Viable Product) is a scaled-down version of your product that delivers core functionality and value. The goal is to test the product concept with real users and gather feedback for improvement. Before you launch your product, building a minimum viable product (MVP) allows you to test the viability of your digital product idea before getting too far into development.

An MVP is a product with just enough functionality to test with a few early customers to get feedback on what they value most.

An MVP won’t be perfect. It’s simply a stepping stone on the path towards launching a full-fledged final version of your digital product. The feedback gathered from your MVP is the “secret sauce” for creating the best possible version of your digital product that you are proud to take to market.

For example, if your product is software you might create wireframes and clickable mockups to visualize the product and simulate user experiences.

Again it’s imperative to gather insights from beta testers and observe how they interact with your MVP. This feedback lets you optimize and refine before a full-scale launch, ensuring your product aligns with customer expectations.

Use the Right Tools and Platforms

Choosing the right tools and platforms makes creating and selling your digital product easier.

If your producg is a course you might consider platforms like ThriveCart Learn+ or Thinkific for hosting your lessons combined with Spotlightr for hosting your videos. Tools like ActiveCampaign for managing marketing campaigns work well along with Canva, a great design tool for creating templates or visual assets.

If you’re using a WordPress eCommerce site, features like payment processing and software licensing can simplify transactions and improve the customer experience. With the right tools in place, you’ll be able to run your digital product business efficiently.

Conduct Quality Assurance Testing

You’re almost ready to launch your digital product into the world. But, as the saying goes, measure twice and cut once.

So before you gear up for the big day, take one last step to double-check your work and conduct quality assurance (QA) testing with a small sample of users.

QA testing tells you if users can find what they need, understand what they’re supposed to do, and get the results they want without difficulty.

Before the complete launch, this online tool went through multiple rounds of QA testing to ensure an optimal customer experience, which is especially important for digital products. There’s a lot of competition for digital products on the internet, so to stand out, you need to be better, easier, and faster than the rest.

Price and Position Your Digital Product

Pricing and positioning are crucial for your product’s success. Your pricing strategy should balance production costs and customer value, ensuring profitability while attracting customers. Some customers equate higher prices with higher value, so it’s essential to set a price that reflects the quality and benefits of your product.

Positioning is about differentiating your product in the market. A compelling positioning statement highlights your product’s unique benefits and speaks directly to your target audience. Keep this statement in mind throughout development to maintain focus and appeal to your ideal customers.

Competitive Pricing Strategies

Explore different pricing strategies to find the right fit for your product:

Value-Based Pricing: Set prices based on the perceived benefits your product provides.
Tiered Pricing: Offer multiple versions of your product at different price points, catering to various customer segments.
Subscription Pricing: A recurring fee is ideal for products that deliver ongoing value, like courses or membership content.
Freemium Model: Offer a basic version for free and upsell advanced features in premium packages.

Competitor analysis helps you understand what pricing approaches work best in your niche, allowing you to set a competitive price that maximizes profitability.

Craft a Compelling Positioning Statement

A positioning statement defines your product’s role in the market and its appeal to customers. Describe your target audience and what makes your product unique. Keep this statement at the forefront during development, so your product remains aligned with its market and customer needs.

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Build an Online Presence

A strong online presence keeps customers engaged and promotes your digital product effectively. Start with a website that’s easy to navigate and visually appealing, then use social media to build a community around your product. Engaging influencers or creating valuable content helps establish credibility and keeps your audience interested.

Create a Landing Page

Your landing page is where customers learn about your product and decide to buy. Make sure it has a clear call to action and showcases the key benefits. Keep it mobile-responsive, as many customers access sites on their phones.

Highlighting your product’s features and benefits on this page is crucial for driving conversions. By optimizing the landing page for clarity and impact, you’ll increase the chances of turning visitors into buyers.

Implement SEO Best Practices

SEO helps your product show up in search results, attracting organic traffic. Use relevant keywords in your content, titles, and meta descriptions to improve visibility. Creating high-quality, valuable content on your website boosts your search engine ranking and helps more people discover your product.

Develop a Go-To-Market Strategy

You can’t just make a product and expect users to flock to it. You need a strategy to get your product in front of people and then convert them into customers.

Focus on creating a go-to-market strategy by answering these questions:

Price point: What price should you charge?

Sales channels: Where do customers buy your digital product?

Marketing funnel: How do you attract potential buyers and convert them into paying customers?

Sales cycle: How long does it take to turn a lead into a customer?

Some of the most popular channels for selling digital products include products like Kajabi, Thinkific, or Teachable. If you prefer to avoid third parties altogether (more money in your pocket), you can also sell your digital product directly on your website.

Build a buzz through social media to spread the word about your product ahead of your launch day. Building hype makes sure your potential customers are interested in your new product when it finally goes live.

Here are some tips for building a buzz on social media:

>> Tweet regular updates about your product

>> Share testimonials from customers who used the product during QA testing

>> Ask influencers or colleagues in your industry to share the details of your launch

>>Create lead magnets that offer a free product to build your email list

When launch day arrives, use email marketing tools to schedule and share the big announcement with your email list.

Launch and Market Your Digital Product

Your launch strategy can make or break your product’s success. Email marketing is a powerful way to build anticipation and engage your audience. Growing an email list and sharing sneak peeks or exclusive offers can create excitement before the launch. Consider offering a free sample or preview to encourage sign-ups and generate buzz.

Early marketing efforts like social media announcements or a waiting list can set the stage for a strong launch. A checklist that covers all launch essentials—social media posts, email blasts, and Q&A sessions—keeps everything organized and effective.

Pre-Launch Marketing

Pre-launch marketing builds excitement and prepares your audience for your product. Set up a waiting list, create a dedicated landing page, and start promoting features and benefits. Optimize the landing page with SEO techniques to improve search visibility and attract early interest.

Collaborating with influencers who align with your brand can boost awareness and credibility, expanding your reach and generating authentic content that engages potential buyers.

Post-Launch Strategies

Keep the momentum going after launch. Collect customer feedback to create testimonials, which serve as social proof for your product. Continue promoting through paid ads and content marketing to reach new audiences and maintain visibility.

By focusing on both pre-launch and post-launch strategies, you’ll keep your product top-of-mind and drive sustained growth.

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Gather and Analyze Customer Feedback

Now that your product has officially hit the market, your job isn’t over yet. Keeping a close eye on customer feedback will help improve your product and grow a loyal following.  Customer feedback is invaluable for improving your product and enhancing customer satisfaction.

Reviews and surveys help identify what users love and where they see room for improvement. After launch, continue to collect feedback regularly and use it to guide product updates. Automate follow-up emails to check in with customers a few weeks after purchase, encouraging them to share their experiences.

If a particular feature isn’t working well, it’s essential to tweak or remove it. Continual improvement keeps your digital product relevant and competitive. Responding to feedback with updates and enhancements shows customers you value their input, which can build loyalty and improve retention. The key to long-term digital product success is quickly adapting to changes in consumer demands.

Scaling Your Digital Product Business

As your digital product gains traction, scaling your business becomes the next step. Digital products offer unique growth potential because they don’t require inventory or restocking. Use email sequencing, guest blogging, affiliate marketing, and SEO to reach more customers and increase revenue.

Expand Your Product Line

Adding products that complement your original offering helps you reach new customer segments and increase sales. Consider creating different product tiers or offering variations of existing products. Testing new ideas with surveys or small launches can help gauge interest and ensure they fit your audience’s needs.

Leverage Automation

Automation saves time and lets you focus on growing your business. Use tools like email marketing platforms, social media schedulers, and analytics software to streamline your operations. As your business grows, automation becomes essential for efficiency and scalability.

In Summary

There you have it.  Creating a digital product is an excellent way to generate passive income or add another revenue stream to your business model.

The steps to creating a digital product don’t have to be overwhelming as long as you follow several key steps: start with a unique idea, conduct thorough market research, plan and develop the product thoughtfully, and launch it with a strong marketing strategy. With the right approach, you’ll not only meets customer needs but also thrive in the marketplace. 

To increase the odds of a successful digital product launch, find a market with some demand and then test if people will buy your solution. Continue to refine your idea to create a long-lasting product that people are willing to pay for years to come.

Frequently Asked Questions

How do I identify a profitable digital product idea?

Brainstorm around your skills, hobbies, and what’s trending in the market. Focus on areas with high demand and low competition to increase your chances of success.

Why is market research important for digital product creation?

Market research helps you understand customer behavior and preferences, guiding you to create products that truly address their needs and attract a loyal customer base.

What is a Minimum Viable Product (MVP)?

An MVP is a simplified version of your product that still delivers value, letting you test your concept with real users and get feedback before fully launching.

How can I effectively price my digital product?

Consider competitive pricing strategies like value-based and tiered options to balance profitability and appeal to your customers.

What are some post-launch strategies for my digital product?

Use positive testimonials to boost credibility, keep promoting through ads and content, and continually improve your product based on user feedback to build a stronger brand over time.

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