Selling digital products: Another revenue stream for your online business

by Michael P. Hill June 21, 2018

Selling digital products: Another revenue stream for your online business

In addition to services and products, you can leverage your Shopify theme and the Shopify platform to sell another kind of amorphous product — digital downloads.

Some stores sell nothing but digital products, which can range from digital files of photography, software programs, electronic books, videos or guides.

Getting started

As with selling services, there are some unique steps that are required to sell digital downloads:

  • Digital downloads generally won’t have shipping costs associated with them, except in cases where a customer can opt to have discs or hard copies of the files shipped in addition to a download.
  • In general, digital downloads won’t need to have inventory tracking either, though there are exceptions to this case, such as limited edition downloads.

Shopify digital downloads app

  • While digital download orders can be processed manually, in most cases you’ll want to consider an app to help streamline order processing. Shopify develops a free app for this with basic features — though additional third party apps can add additional features and functionality.
  • In addition to shipping, whether or not digital downloads are taxable will vary greatly based on your location, so be sure to research local laws and regulations.

What you can sell

If you already have a product or service-based Shopify store, it’s worth considering adding digital downloads as an additional revenue stream — one that has particularly low overhead since there’s no inventory to stock and track. Here are a few ideas to get you started:

  • Create a digital book, guide or video series that covers advanced uses of some of your most popular products. You likely don’t want to alienate customers by forcing them to buy what could be viewed as a “manual” that covers basic usage, but advanced users may be willing to pay extra for some pro tips or bonus tracks.
  • Consider selling digital add ons that can enhance or add to your physical products. For example, if you sell paper journals or notebooks, you could sell templates that customers could download and print. If you sell beauty products, downloads could include schedules or checklists for skin care regimens.
  • Think creatively and think of ways that you can make it easier for your customers to use your products and services. For consumable goods, digital downloads that encourage or remind customers to use your products can lead to repeat orders.
  • For high end lifestyle brands, assemble seasonal ideas or lookbooks with high quality photography that can be downloaded for a small fee.
  • Even services can have “add on” downloads — such as workbooks or reference guides to accompany training or classes or a custom lookbook for personal shopping sessions.
  • If you sell downloads there are often creative ways to increase cart totals by offering additional downloads, such as printable guides, tutorials or other value-added downloads.
  • If your brand has a loyal following, consider selling branded wallpapers for tablets, computers or mobile phones that customers can download for a small fee.
  • When pricing digital downloads, it’s generally a good idea to keep the costs on the lower side, though this will obviously vary based on what you are selling.
  • From a business standpoint, adding a digital download to an order can be a great way to boost profitability, especially on lower margin items, so think strategically about that when considering what digital products you can offer.
  • Lastly, you can also consider adding completely free digital downloads as a promotional tool to help build brand exposure and get people interested in your full product or service offerings. The goodwill generated with a free ebook, photo, style guide or other goodies may indeed result in some new fans and customers.

Creating digital products

Creating digital downloads can be quite simple, or it might require you to work with some freelance designers, writers or developers:

  • If you have design skills, a variety of free and paid software is available that can be used to design and export files as PDFs or in other popular formats.
  • You can also hire copywriters, designers and other pros to help brainstorm, design and produce digital downloads.
  • Keep in mind that freelancers who can help you on this type of work aren’t necessarily Shopify-specific, so be sure to check a variety of general freelancer sites.

Downloads as special offers

In addition to being an additional source of income, digital downloads can also be a great, low cost way to build special offers or marketing campaigns around.

For example, customers could receive a free download with every purchase made, or only for purchases using a certain threshold. Downloads can also be a great “first time customer” offer.

Shopify digital download special offers

In many cases, you can add value to your offer by giving your downloadable product a “list price.” Not only will this allow you to sell your product and leverage the features that come with product and order fulfillment, but it gives your offer a perceived value that can make it more enticing to customers.

To automate the process of using a download as a special offer, Shopify’s existing discount code functionality can be used to create a discount for the full amount of the download list price. Restrict the code’s use to only the product you want to ensure the offer isn’t used incorrectly or use the new “Buy X, get Y” feature.

Downloads for content marketing

Finally, digital downloads can be a great jumping off point for creating content marketing and blog posts around your digital guides. Providing customers with a preview of what’s in your digital guides, for example, is a great strategy to not only encourage them to purchase your digital goods, but also portray yourself as a market leader.

Michael P. Hill
Michael P. Hill

Michael P. Hill is a Shopify, Shopify theme, content marketing, digital marketing and product management expert based in Chicago. Follow him on Twitter at @michaelphill or connect on LinkedIn.



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