With millions of people around the world looking for ways to start making money online or to start a business on the internet, there are countless ways to go about it.
From Affiliate Marketing to Amazon FBA, coaching to creating your own digital agency, there are a lot of shiny objects out there to pull your attention as you look to start your business.
However, one area that gets missed TOO often is the power of Digital Products.
In this short article, we’re going to talk about WHY digital products are the best place for you to start your online business!
What Do I Mean By Digital Products?
When it comes to Digital Products, there are hundreds of products that you can build out and the only thing holding you back is your imagination.
Digital products can be anything from simple word documents and pdf files, to photos you’ve taken. You can create a video series or even write your own e-book. I have another article coming with a full breakdown of digital product ideas you can take to create your own.
But let’s use me as an example. We built our most successful online business on the back of digital products. The very first one we sold was a 19 page word doc that contained sales copy and graphics for people within our niche. We then turned that into a monthly release.
As we expanded, we started offering graphic packs, added on a digital planner, a printable binder, pdf guides and workbooks and even an excel tracker that can be used specifically for the audience we serve in that business.
In that business, we now have over 180 different digital products we sell, and have even turned our monthly product into a monthly membership in which we accept recurring payments EVERY SINGLE MONTH!
So obviously I’m biased when it comes to digital products, but let’s go ahead and walk through why this could be the best place for you to start.
1. Low Cost of Entry
One of the most common hesitations people have when thinking about starting a business is how much your new startup will COST you! Of course it is and it should be. We need a low cost of entry so the level of risk you put up is at a minimum.
This is my first reason Digital products are the best way to start your new online business. If you already have a computer, tablet, or even a smartphone… then you have the tools you need to start a digital product business.
You can literally sit down and have your first digital product made TONIGHT! You just need to sit down an do it.
Regardless of your niche, there is a digital product you can create. Even if the idea has been out there before, you can still create your own version.
If you can create a word doc step by step, an excel tracker, or a PDF quick start guide in Canva, then you can build out a digital product.
Our first and still most successful digital products are Microsoft word files that we built out sales copy that we sell to our customers. Our second most popular is a financial tracker built in an excel format, and our third is a time organization binder for our niche.
The only thing it cost us to make was our time. But once it’s built, guess what… its built and it’s ready to go!
2. Zero Inventory Overheads
When you’re selling Digital products, you’re selling a version of a file. You don’t have to develop anything physical, and there is absolutely no inventory you have to worry about. All the testing, design, engineering…nope, don’t have to worry about that.
Anytime you’re selling a physical product, you add problems. Even if it’s not YOUR physical product. Even as an affiliate, if your supplier is out of stock, so are you.
But with digital products, once it’s made, it’s made. It is now in stock and ready to go. Then you can decide through which platform you want to sell your product.
With any business, you need to consider your “COGS” or “Cost of goods sold”. This gives digital products a huge advantage over any physical product in this way since you really don’t HAVE cost.
This leaves you to focus your costs more on the platform in which you’ll be selling it.
Think of it this way. You spend 10 hours building a product. You equate your time to $40/hr. So maybe it cost you $400 worth of time to build, but since you don’t have to purchase inventory, the moment you hit $400 in sales, the rest is pure… yeah see the next headline.
3. 100% Profit On Your Products
While you can definitely find success selling physical products or being an affiliate, you can never pull 100% of the profits. With any physical product, whether through dropshipping or through Amazon FBA, you’ll be dealing with margins.
And on the side of being an affiliate, you’re pulling in the commission % that they are offering to you. You’re not getting the price the customer is paying.
But with your OWN digital products, once you’re done creating it, your cost is locked in. From there on out, it’s profit. You put up a $10 digital product, you’ll receive $10 minus the payment processing fees.
Now this is not to say that you shouldn’t eventually incorporate affiliate products or physical products into the product list of your company, but the more you can produce from a digital product standpoint, your overall margins will stay nice and healthy.
4. Your Products Can Last Forever
Running your business in the world of digital immortality has it’s benefits! As a digital product, once it’s published, it can live forever and continue to produce passive income.
Now that’s not to say you don’t have to continue to market your products in order to see results, but having an e-book up on amazon, or a selection of designed printables on your website allows you the opportunity to continue to make passive income as long as you continue to host it somewhere.
The only thing that can bring it down is if you remove it. Lending itself again toward the benefits of starting a business with physical products. If you want to continue to sell your product, you have to continue manufacturing and ordering.
Really the same goes with affiliate marketing as well. If the product you’re promoting is no longer available, then the links you tossed out into the internet won’t matter anymore anyway. At least when it’s your product, you have control, and it live till you take it down.
5. You Can Easily Combine, Package, or use as Freebies.
Your first digital product can be something as simple as a series of email templates to an excel tracker for a board game, but as you continue to grow, you can start to package things together, or include things in a larger product, thus selling a bigger ticket item.
Also, if your product could become a monthly release, you could even build a membership or subscription around the monthly release of your products. You could earn passive reoccurring incoming from your members/subscribers as long as you continue to show up and deliver value.
Also, as you start selling your digital products, you can take one that you know has some value and use it to entice new people to jump onto your email list by using one of your digital products as a freebie. This is incredibly common and something we do all the time to move the needle in our business.
And lastly, as you work your way into a bigger course or bootcamp, you can use prior made digital products as part of your value stack to get new students signing up to your big ticket course.
Start With At Least Two Digital Products!
So hopefully by now, you can see the potential of starting a digital product based business. Now it’s time to actually get to work and get this thing started! But if you’re going to start, you need to start with TWO!
You first need a simple digital product you can put together… a little 40 page e-book, or a handy PDF guide to get your audience started. This is going to be your freebie!
This first digital product is going to be what drives your email list to start building up your audience. I’ll put together a more comprehensive training on this part, but if you haven’t started your email list, DO IT!
I recommend ConvertKit for simple landing pages that can house your freebie and it’s easy to put together a simple page and delivery email to put it together.
Your second digital product will be a step up from the freebie to add even more value! This product should range in your business between $7 and $47 dollars and should be an impulse buy from your new customers.
Sendowl is a great program that provides an easy cart structure and simple checkout for your customers and gives you easy links that you can put into emails, facebook groups, social media posts and more if you don’t have your own website yet!