How to Earn a Side Income Selling Digital Products

September 7, 2021

A whole new world of potential revenue streams await you and getting started is easier than you think. In fact, your greatest monetary gains may be the easiest you’ve ever made.

Digital products are slowly taking away market share from their physical counterparts and, in some cases, opening up new potential revenue stream opportunities. 

Take the music industry, for example.

Over the last decade or so, physical CDs and tapes have lost out to their digital counterparts as seen in the burgeoning success of platforms like iTunes and Spotify. We can understand this more tangibly by looking at CD sales in 2020 which accounted for only 5.5% of total music industry revenue compared to 90% in 1999.

In the book industry, eBooks have greatly increased their market share to a figure around 21% of total book sales as of this year. This is up from 14% in 2019 which is indicative of its rapid growth. 

There’s a lesson to be learned here: people will pay money for convenience and immediate accessibility. Even if the product costs nothing to make (because it’s digital!).

Selling digital products is a low-cost, low-risk way to experiment and start generating multiple revenue streams.

Technology solutions have made it easy to sell digital products since 2011. Platforms dedicated to giving people the freedom to work, learn, and live how they want have changed the creative landscape, abstracting away the tasks of hosting products, handling payments, and making sense of sales data.

As digital distribution and ecommerce platforms have matured over the past decade, the skills of successful entrepreneurs and creators have remained the same:  a keen appreciation of what’s worth selling, how to sell it, and the easiest way to get started.

Earning a side income from selling digital products starts with understanding what they are and why to sell them. And it depends further on envisioning, validating, and creating products in demand. In six parts, this article summarizes how anyone can turn ideas into income online: 

  • What is a digital product?
  • Benefits of selling digital products
  • Some of the best digital products to sell
  • Digital product ideas
  • How to create the best digital products
  • Tools and platforms to use

What is a Digital Product?

Digital products are anything that you can pay for and then download and consume instantly.

In other words, they are goods that can be sold in a digital form and then redeemed from an online device.

The first things that come to most people’s minds when the words ‘digital products’ are used are the ones we all know and love. I’m referring to your favorite Kindle books or your next Netflix binge show.

Yes, these are digital products!

The good news is you don’t have to have a billion-dollar budget to earn a side income creating or selling digital products. Creating a digital product may take your time, but it doesn’t require any money.

We’re going to take a look at digital products you’ll be able to produce and sell without breaking the bank (or your creative mind).

Just keep one thing in mind, if it can be viewed online, it can be sold online. You just need to figure out how your expertise can be crafted into a digital product that can then be marketed to appeal to your target audience. 

Benefits of Selling Digital Products

Before we go down the very convincing path of all the benefits of selling digital products, it is important to realize that this path can be for everyone.

You see, tech-savvy people have built companies around platforms that can make the whole process simple. Like Gumroad ;) … but more on that later.

You don’t have to be a technical savant to reap the rewards of our increasingly digital economy.

Let’s jump into the juicy benefits.

1. Little to No Startup Costs

People often face economical barriers to entry: they have a great idea and want to start selling something only to realize that they need a lot of capital to get things off the ground.

The nature of digital products means that your start-up costs are extremely low. This is possible thanks to the online marketplaces and varying e-commerce tools that are easy to use and take away most of the hassle that people think is needed to start selling.

By combining an idea with some energy and a little focus, you’ll be able to get your idea onto a platform and start selling without the need for a loan or venture capital.

All of this means one thing: Higher profit margins.

2. Flexibility is a Feature

More and more company teams are transitioning to remote work which is great, but you’re often still expected to be tied to your (home) work desk for a set number of hours or meetings. 

The fantastic thing about selling digital products is it’s your own virtual business, meaning you decide how long and from where you want to work on it. You have full control over everything.

3. No Need to Pay for Physical Storage Space Every Month

Logistics can be a real time-sink when it comes to selling products. It’s not hard to imagine - physical products require production costs, physical storage arrangements, and payments, as well as potentially troublesome shipping arrangements.

Selling digital products removes the necessity for any of this which makes it an ideal side (and full-time) hustle.

Apart from being the lowest cost products that you can sell, selling digital products means a less stressful life compared to the physical product alternative.

4. The Money Flows in Passively

Once your product is set up and starts selling, there’s not all that much you need to do, besides marketing. That’s the beauty of passive income.

So even if you have a full-time job, earning a side income selling digital products online can still bring in money every month. 

The beauty of digital products is you’re not selling time for money, which can set you well on your way to living the kind of life you prefer with more freedom.

If one of your goals is to build wealth, then a passive income stream is one of the sure-fire ways to accomplish this.

5. No Ceiling on Earning Potential

The longer you sell digital products, the more your profit margins increase and improve with time. The reason for that is simple - you don’t need to spend more money to produce more items of whatever it is that you’re selling.

For this reason, selling digital products has (almost) unlimited earning potential. The virtual nature of what you’re selling means that you’ll be able to sell your product to anyone that has a working internet connection and an email account.

6. You are in Complete Control

Thanks to the elimination of unnecessary logistical overhead like shipping, storage, and manufacturing your product, we arrive at the sixth advantage of selling digital products - you are in complete control.

You decide everything - what to create, what price to sell it for, and where to sell it from. 

You have the potential to sell to anyone in the world thanks to the lack of any physical constraints.

Some of the Best Digital Products to Sell Online

Videos and Online Courses

Think about the last time you had a question that you searched for on Google.

Chances are you’ve seen a video as a suggested answer.

Most of us love to learn new things, but HOW we learn it makes all the difference.

Some prefer video, some audio, and some text.

Besides the popularity of video learning, it’s also generally more expensive than eBooks or other digital products.

Which means you can earn more $.

So whether you’re looking to create a video on “how to set up landing pages from scratch using the latest tech” or a series about “how to start an art career as a beginner”, you might as well monetize it.

A top earning creator on Gumroad who does this well is Daniel from Cold Email Wizard. He started selling an eBook for $17 and over time, started adding videos to his course which now sells for over $200.

You can view his course here

eBooks

eBooks represent one of the many fantastic benefits of our tech-centric life: convenience.

By creating and releasing an eBook, you’re giving access to your knowledge in a form that can be consumed on e-readers, phones, tablets, and computers. This means content that your readers can take with them anywhere.

It’s a perfect alternative for introverts and it’s super easy to publish.

Here’s the in-depth guide on creating and publishing an eBook:

  1. Open Google Docs or Microsoft Word.
  2. Write the content.
  3. Design a cover on Canva.
  4. Save it as a PDF.
  5. Create a Gumroad account (it takes 2 minutes).
  6. Publish it to Gumroad.
  7. Start selling.

We have so many amazing creators selling eBooks on Gumroad.

Adam Wathan and Steve Schoger sell a popular eBook to become a better web designer.

Kristina Garner sells an extremely popular home-schooling curriculum as PDF documents.

Templates and Designs

Templates and designs are a lifesaver for UI designers, artists, photographers, designers and web designers too. 

It saves so much time, and when you can save time for others, you can make money from it.

Jingsketch is one of our top creators selling illustrations, tutorials and brushes.

Mateusz sells UI Kits for Figma.

Kyle sells Tailwind templates.

Pablo sells hand-drawn illustrations.

Audio

If music is your passion and you've worked in music production, why not make killer beats and start selling them online?

This could be soundtracks, songs, loops, and even sound effects.

Film studios, podcasters, streamers and content creators are always looking for new audio to use in their productions. 

You already have the talent and skill, why not learn how to monetize from your passion and creativity so you can start generating a side income too?

Even better, why not create a video course teaching others to become a musician as well?

Win-win.

Digital Product Ideas

Now that you know some of the best digital products to sell online, let's dig a bit deeper into more ideas of what you can offer.

Yep, there are hundreds of examples, but here are a few popular examples to consider:

For the tech savvy:

  • You could sell website themes, apps or other software that can then be sold as service (SaaS).

If you’re good at explaining:

  • You could create video tutorials, eBooks or paid newsletters explaining a process or skill.

If you’re a talented speaker:

  • You could create a premium podcast people can subscribe to.

If you love cooking:

  • You could create a recipe book, diet plans and cooking classes.

If you love to design things:

  • You could create PSD files, templates, icon packs and design courses.

If you love photography:

  • You could create lightroom packs and photography courses.

The takeaway here is that you can make a living selling a skill and love doing it too! :) 

Let’s take a look at Gumroad by the numbers:

How to Create the Best Digital Products 

Build an audience

One of the best ways to create a popular digital product is to first create an audience.

This is how Arvid Kahl got started.

He spoke about how he grew a SaaS (Software as a Service) on his podcast and social media channels, and he soon started getting regular questions on how he did this and any tips he can share.

What did he do next?

He created a product, of course

Zero to Sold was born from his audience creating the demand.

Takeaway:

  1. Talk about what you enjoy and what you’re knowledgeable in.
  2. Then create a product based on the demand and interest from your audience.

Complete beginner? Get our free Grow Your Audience course here.

Refine and improve

Sure, you can sit back and start relaxing after your first product – and you should – it’s a massive celebration.

When you’re ready from your vacation, it’s important to keep refining, improving and adding to your product range.

As we said earlier, Daniel from Cold Email Wizard started with an eBook. He now has various courses and his products have just been getting better and better.

This approach is not only good for your customers, but it also leads to more sales too.

Consistent sales

Some of us may not like the “sales” part, but if your product is helpful, why not confidently promote it and get the word out?

It might be easy for you to launch your product, but how do you keep generating regular, consistent sales?

That’s THE question.

And luckily, we have the answer for you

We go through it step by step in our Sale Every Day course – you can get your copy for free here.

Platforms to Help You Sell Digital Products Effectively

There are so many platforms you can use, but why not cover the “insert superlative here” one?

(switching to third person)

Gumroad

Gumroad is a fantastic platform because they make it abundantly clear that they care about their creators.

It’s their philosophy that creators deserve to get paid for their work and their value offering is making it incredibly easy to get started and to start selling as a creator.

Going through their landing page, you'll probably find yourself nodding along with their points as I found myself doing – “escape your 9-5 desk job, take off your suit and tie, end your commute, get paid for your craft.”

They also offer a bunch of great features for someone wanting to sell their digital products.

Let’s take a look at a few:

  1. You’re able to customize a landing page using their builder with the option of using CSS.
  2. Get access to data with nice visuals that can help show you what’s working for you and where you could be doing better.
  3. Selling products is easy with a host of customizations that allow you to offer exactly what you want in the format of your choosing.
  4. Your customers have access to what they’ve bought from you the second they’ve bought it. Instant access means happy customers.
  5. If you wish to add physical products to your offering, Gumroad makes it easy to do just that.
  6. Gumroad handles the VAT and Sales Tax.
  7. Gumroad is super easy to use – both for you as the creator, and for your customer to make a purchase.
  8. It's completely free to use Gumroad (you can sign up here).

Gumroad lets you focus on what matters – create quality products and get paid for your work.

Take Floortje Visser and Jesse Enkamp as examples who took the opportunity to turn their passion into a career with the help of Gumroad.

Visser is a Dutch artist who created Art With Flo, a digital art business offering beginner and advanced video tutorials to draw and paint. She started as an individual freelancer who used Instagram to post the process she used to create an image and not the image itself.

She even started posting YouTube videos to show the process of creating an image until she discovered Gumroad. Visser's first Gumroad product was a set of basic brushes designed for Procreate on iPad Pro and today, she's selling more than 20 products on the platform.

Meanwhile, Enkamp is a karate lover who also used Gumroad to continue his craft while earning an income.

Enkamp used to write blogs about his experiences and has attracted other karate nerds and then decided to turn these blogging skills into writing books.

Now he is a well-known international educator, national team athlete, best-selling author, and founder of KARATEbyJesse. He publishes educational content and teaches seminars around the world.

Both have now been earning six figures selling digital art products.

This can be you, too.

Now of course there are other platforms you can use to sell your digital products, and many of them are great alternatives to Gumroad.

The best is for you to test and see which one suits your needs better.

Conclusion

Everyone wants to earn passive income, but most think it’s not possible to achieve.

This is simply not true.

Earning a side income selling digital products online has never been easier with the fantastic online tools available to curate and sell our knowledge and expertise.

The low start-up costs and reduced barrier to entry mean that you really can apply the “It’s better to try and fail than never to try at all” saying without fear of losing everything.

Who knows, even if you're slightly successful, you’ll still have passive income rolling in regardless of whether you step into the office or not.

Sounds like a win-win to us.

Get started with creating your first digital product on Gumroad here.

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