How to Create and Sell Digital Products That Generate Passive Income

Introduction

Creating and selling digital products is the most popular and effective method of generating passive income online.

Don’t get me wrong: selling services online is also a great way to make money.

However, there is only so much you can do with your time.

If you want to scale your online business and unleash your potential online, digital products are the way to go.

This blog article will give you all the steps to create and sell digital products and start making passive income.

Ready to take your online business revenue to the next level?

Let’s get started!

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What are digital products?

Digital products are any products that can be delivered electronically, such as eBooks, online courses, software, music, and graphics.

They are popular among creators and entrepreneurs because they require little to no physical inventory, can be sold globally, and have the potential to generate passive income fast.

With the rise of technology and the internet, digital products have become increasingly popular and accessible to both creators and consumers.

If you are an online business owner, creating digital products is an amazing way to increase your business’ revenue.

Why create and sell digital products?

Creating and selling digital products can be a lucrative way to generate passive income.

Unlike physical products, digital products can be created once and sold repeatedly without the need for additional inventory or shipping costs.

Additionally, digital products can be easily distributed and accessed by customers worldwide, making it an easily scalable business model.

By creating and selling digital products, you can leverage your skills and expertise to create valuable resources for your audience while generating a steady income stream.

What is passive income?

Passive income is a type of income that is earned without active involvement in the day-to-day operations of a business or investment.

It is a source of income that requires little to no effort to maintain and can continue to generate revenue over time.

Digital products are an excellent way to generate passive income. Once created and published, they can be sold repeatedly without any maintenance.

Of course, creating an amazing eBook or paid course takes time.

A lot of time.

However, after hitting “publish” on your product, creating a sales page, and setting up an email marketing automation, you will be able to make money on autopilot.

A paid product can make you money for years with minimal effort to update it.

This is why digital products are such a powerful way to make money.

Step 1: Define your target audience

Niche down and identify your ideal customers

If you have launched your online business, you may have already defined your target audience.

To create a digital product that will help your readers, you need to zoom in on your audience and identify your ideal customers for this product.

Conducting thorough research to understand their needs, preferences, and pain points will help you create a product that will genuinely help your customers.

Do not underestimate the research phase.

It will help you create digital products tailored to your audience’s specific requirements, which will make them more likely to sell.

You can use various tools and techniques to gather information about your target audience, such as joining Facebook communities or using social media to survey your followers.

Additionally, you can analyze your competitors’ product reviews and marketing strategies to gain insights into what works and what doesn’t in your niche.

The idea is to identify your ideal customer and get a general idea of how your competitors are addressing their audience’s needs.

Identify their pain points

To create a successful digital product, it’s important to identify your audience’s pain points.

This means understanding the exact problems and obstacles they face to complete a specific task and achieve a goal.

There are many different ways to identify your audience’s pain points.

However, the most efficient way to do so is by interacting directly with your readers.

Survey them on social media or by email if you have built an email list already.

Ask for what competing products they have already purchased and study these products in detail. Doing so will give you a clear picture of what’s already on the market.

You will need to create more than an average product to beat your competition. You must create something so different that your audience will be excited to pay for it.

And to do it, you need to focus on the next point on this list…

Find a gap in the market and make it your USP

The internet is an unlimited resource of information.

So why would people be willing to pay for a product when plenty of free information already exists?

The answer is simple: if your audience is ready to pay you to help them solve an issue or achieve a goal, it’s because there is a gap in the market.

One of their needs is not fulfilled by free resources available or other paid products.

And that’s when you enter the chat.

Your role is to find your audience’s pain points and identify how you can help them differently.

This will be your Unique Selling Proposition (USP), and it will make all the difference.

Step 2: Create your digital product

Choose the type of digital product you want to create

Now that you know what’s missing on the market and how you can make a difference, the next step is to choose the type of product you want to create.

The most popular options are:

• eBooks
• Online courses
• Software
• Memberships
• Webinars
• Templates

Each type of product has advantages and disadvantages, so choosing the one that aligns with your skills, interests, and target audience is important.

• eBooks and templates are popular choices as they are easy to create and can be sold on various platforms.
• Online courses are great for in-depth content and can be sold at a higher price point.
• Printables, such as planners and worksheets, are a great option for visual content.
• Webinars are perfect for live interaction with your audience and can be recorded and sold as a digital product.

Take the time to research and evaluate each option before making your decision and keep in mind the amount of work each option would represent.

Write a digital product brief

It’s now time to start thinking about your digital product’s content and make a product brief.

A product brief summarizes the goal, scope, and direction of your product. Your product brief will help you organize your ideas, figure out your approach and guide you through the development process.

Make a summary of the points/chapters/sections you want to include in your product, their order, and content.

Writing a product brief before starting to create your product will help you:

• Establish guidelines for your product, such as requirements, design, and pricing. 
• Increase efficiency: when you know exactly what you’re doing and where you’re going, you work faster to achieve your goals. Writing a product brief reduces time wasted on re-clarification and keeps you focused on the finish line. 
• Design a coherent product: writing a summary of your digital product’s content will often make you realize you need to include additional chapters or sections to make a coherent final product.

Create high-quality content

Creating high-quality content is crucial when it comes to selling digital products that generate passive income.

Your content should be informative, engaging, and valuable to your target audience.

It’s important to conduct thorough research and provide accurate information that is backed up by credible sources.

If you are your own source and share information based on your experience, including screenshots and other means of proof is important.

Additionally, your content should be visually appealing and easy to read.

This can be achieved through the use of images, infographics, and formatting techniques such as bullet points and headings.

By creating high-quality content, you will establish yourself as an authority in your niche and attract a loyal following of customers who be willing to pay for your digital products.

Design an attractive cover and designs

Once you have created your digital product, it’s time to design an attractive cover.

This is important because it’s the first thing potential customers will see, and it can make or break their decision to purchase your product.

Your cover should be eye-catching and visually appealing, while also conveying the essence of your product.

You can use tools like Canva to create professional-looking covers and promotional content.

Make sure your promotional graphics include all the necessary information about your product, such as its features and benefits.

Test and refine your product

Once you have created your digital product, it’s important to test it thoroughly before launching it to the market.

This will help you identify any issues or bugs that need to be fixed, and ensure that your product is user-friendly while meeting the needs of your target audience.

Gathering feedback from your customers is key to refining your product and improving it.

To do so, you can either offer a pre-launch discount and ask customers to review your product or offer the customers who send you feedback a valuable free resource or discount on your next product.

The key to success with digital products is to continually iterate and improve based on customer feedback and market trends.

Doing so will help you create a product that will actually help your community and serve your brand.

Step 3: Set up your sales funnel

Choose a platform to sell your digital product

Once you have created your digital product, it’s time to choose a platform to sell it on.

There are many options available, including popular marketplaces like Sendowl, Etsy, and Gumroad.

Additionally, you can also create your own website to sell and promote your digital products.

Having a self-hosted website and starting a blog will give you more control over the sales process and will help you increase brand awareness.

If you decide not to launch a website and sell your products on 3rd party platforms only, be aware that each platform has its own features and fees.

Do your research carefully to find the platform that best fits your needs and budget.

Create a landing page for your product

The goal of your landing page is to effectively showcase your product and convince potential customers to make a purchase.

Your landing page should include the following:

• A clear and concise product description
• Images, gifs and/or videos of your product
• Customer testimonials
• A FAQ section answering questions customers may have
• 2-3 calls-to-action depending on the length of your page

The resources you will use to create your landing page will depend on the platform you choose to sell your product.

If you decide to host your landing page on your website, you can create it using Beefree‘s beautiful templates, export the HTML code and import it on your website.

Another simple way to create landing pages if you own a self-hosted website is to use Convertkit.

If you decide to create your landing page with Convertkit, do not forget to change the DNS settings to self-host your page.

By creating a well-designed and persuasive landing page, you will increase your chances of generating passive income from your digital product.

Set up an email marketing campaign

Once you have hit “publish” on your first digital product, it’s important to implement a communication strategy to keep your audience and potential customers engaged.

That’s where email marketing comes in.

By setting up an email marketing campaign, you will nurture your potential customers with valuable information to educate them, showcase your expertise and promote your product.

To do so, choose an email marketing platform (if not already done), create a sign-up form to collect email addresses in exchange for a free resource, and create an email sequence.

Be sure to provide value in your emails, such as helpful tips and case studies, to keep your subscribers engaged and interested in what you have to offer.

Nurturing your email list with valuable content is a great way to build trust and promote your products.

Optimize your sales funnel for conversions

It’s now time to focus on optimizing your sales funnel for conversions.

This means ensuring that every step of the customer journey, from the initial landing page to the checkout process, is designed to encourage visitors to make a purchase.

Start by analyzing your website’s traffic and conversion rates:

• What percentage of website visitors visit your landing page?
• What percentage of website visitors who visit your landing page actually make a purchase?
• What about abandoned carts? How many people add your product to their carts without making a purchase?

Conversion rates can vary greatly depending on your niche.

Experimenting with different colors, fonts, and CTAs and studying their impact on conversions will help you tweak your sales page to make it more persuasive and increase the likelihood of a sale.

By continually testing and refining your sales funnel, you will increase your conversion rates and generate more passive income from your digital products.

Step 4: Drive traffic to your sales funnel

Use social media to promote your product

Social media is a powerful tool for promoting your digital products and reaching a wider audience.

You can use platforms like Facebook, Twitter, Instagram, and Pinterest to share information about your product, increase brand awareness, offer special promotions, and engage with potential customers.

Make sure to create eye-catching graphics and videos that showcase your product’s features and benefits.

Don’t forget to include a call-to-action in your social media posts, encouraging followers to visit your website and purchase your product.

Being active every day on these platforms will help you grow an audience over time. With the right social media strategy, you will increase your product’s visibility and make more sales.

Related read: How to Use Pinterest to Promote Your Business in 2023

Use paid advertising to drive traffic to your sales funnel

Paid advertising can be a powerful tool to drive traffic to your sales funnel and increase your digital product sales.

Platforms like Pinterest, Facebook, Instagram, and Google Ads allow you to target specific audiences based on demographics, interests, and behaviors.

By creating compelling ad copy and visuals, you can entice potential customers to click through to your sales page and make a purchase.

If you decide to get started with paid advertising, learning how to track your ad performance is key to ensuring your money is well spent.

Take a look at your analytics and adjust your targeting and messaging as needed to optimize results.

While paid advertising can require an upfront investment, it can ultimately lead to a significant increase in passive income from your digital products.

Optimize your SEO to drive organic traffic to your sales funnel

Optimizing your SEO is crucial to driving organic traffic to your sales funnel.

By using low-difficulty and medium-to-high-volume keywords and phrases in your product descriptions, titles, and tags, you will increase your visibility on search engines like Google.

Additionally, creating high-quality content such as blog posts and videos can also help improve your SEO and attract potential customers to your website.

It’s important to regularly monitor and adjust your SEO strategy to ensure that you are staying up-to-date with the latest trends and algorithm updates.

Ahref, Keywords Everywhere, and Ubersuggest are great resources to help you find the best keywords to target and take your SEO strategy to the next level.

By doing so, you will increase organic traffic and chances to make sales.

Related read: 31 Best Blogging Tools and Resources for Beginner Bloggers

Step 5: Scale your digital product business

Create more digital products

Once you have successfully created your digital product and automated your sales funnel, it’s time to start thinking about creating more products.

Creating multiple digital products in your niche will help you diversify your income streams and reach a wider audience.

Consider creating products that complement your existing ones.

You can, for instance, develop 3 versions of a digital product for beginner, intermediate, and advanced levels.

Or repurpose existing content into new products, such as turning a blog post series into an ebook, creating a course based on a popular topic in your niche, or creating a paid community to help customers implement your course material.

Don’t be afraid to experiment and try new things.

The more digital products you create, the more opportunities you have to better understand your audience’s needs and develop new income streams.

Expand your reach to new markets

Expanding your reach to new markets is crucial for the growth of your digital product business.

One way to do this is by leveraging social media platforms to reach a wider audience.

Or simply explore selling your products on different platforms or marketplaces to reach a broader customer base.

By expanding your reach to new markets, you will be able to increase your online business revenue without having to create new products.

Continuously improve and refine your products and sales funnel

Once you have launched your digital product and sales funnel, it’s important to continuously improve and refine them to ensure they are meeting the needs of your target audience.

This will involve gathering feedback from customers, analyzing sales data, and making necessary adjustments to your product or marketing strategy.

By staying up-to-date with industry trends and customer preferences, you will ensure that your digital products remain relevant and valuable, ultimately leading to increased sales and passive income.

Additionally, regularly updating and improving your products will help you stay ahead of competitors and maintain a loyal customer base.

Final Thoughts

Creating and selling digital products is an amazing source of passive income.

Indeed, once a digital product is created, it can be sold repeatedly without little to no additional effort.

Developing passive sources of income will allow you to focus your time on activities that will grow your online business.

With the right marketing strategy and a high-quality product, you will create a sustainable stream of passive income that can supplement or even replace other forms of income, leaving you with more time to enjoy life and grow.