How to Start a Digital Product Business: Ecommerce Entrepreneur 101

For entrepreneurs, digital products are a winning combination for ecommerce. Upfront costs are low, and the potential for passive income is high, two of the most coveted properties for ecommerce success.

So, how do you start a digital product business?

I went on a hunt for sellers with first-hand experience forging a path in digital ecommerce. As it turns out, it takes a delicate balance of key factors to stay afloat in a virtual sea of digital products.

As you’ll see, our experts offer keen insights into some of the finer points of starting a digital product business:

• Finding your place in the market
• Creating the best digital products for your audience
• Where to set up shop
• How to get the word out
• Scaling up and expanding

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How to start a digital product business

First, to learn how to start a digital product business, you’ll need to look inward to find that Marie Kondo feeling. Once you find an intersection of sparking joy and market demand, you’re well on your way to promoting your digital wares.

Finding your place in the market

You don’t have to be the next Canva or Gumroad to start a digital product business. The trick is finding a niche where your skills and passions resonate with an audience.

Finding market demand that aligns with your strengths and interests gives you a perfectly calibrated compass to guide your business decisions.

Grace Beverley, founder of Tala, took her passion for fitness to social media, sharing details about her interests and experiences. When she found herself dreading going to the gym, she started trying new things.

Feeling empowered by new weightlifting skills, Beverley knew others could relate to declining motivation and the excitement of finding something to get your mojo back. She put those personal insights to work and started creating digital content for a fitness app that she knew people would enjoy and actually use.

Here’s how you can find a pain point and test the waters:

• Research social media for observations on communities or topics where you’re already active.
• Use tools like Google Trends and Keyword Planner to find out what people are searching for
• Watch the competition to identify gaps or underserved markets
• Test your idea with a pilot product, survey, or giveaway to gauge interest

Creating must-have digital products

Digital products come in all shapes and sizes, but they all share a key trait in common. They all solve a problem or add value to people’s lives in a way that makes them happy to part with their money.

Hitting that sweet spot is not the end of the story, though. Constant improvement and refinement is where it’s at.

Procrastinators learning how to start a digital product business will be happy to hear that perfection is a long-term target, not a goal. Trailblazers in the digital product market say progress is better than perfection. It’s best to start with a good product, then put your listening ears on. Customer feedback will guide you on the best way to improve and fine-tune your products.

Digital product MVPs

Gumroad is a flat-flee ecommerce platform where you can sell physical and digital products. Its success relies in no small part on founder Sahil Lavingia’s laser focus on improvements based on user feedback.

In his book, The Minimalist Entrepreneur, he encourages would-be sellers to create a Minimum Viable Product (MVP) to test ideas without investing resources into possibly unnecessary features.

The idea is to deliver a functional product, pay attention to your users, and refine the product based on real-world user experience and feedback.

Where to sell digital products

Your online storefront is your time to shine. To start a digital product business, make sure your web presence is loud and proud in the right places for your audience.

While your website should be the foundation for your online presence, meeting your customers halfway is a must. Choose platforms and marketplaces where your ideal customer already shops.

10Web and WooCommerce

WooCommerce is a popular WordPress plugin that brings ecommerce to the masses, and 10Web is the key to making it accessible and easy to use.

The AI Ecommerce Website Builder puts you in control of an online store for digital products. AI creates the website and helps you get started with page layouts and product listings. Then, you edit and work with your website in a drag-and-drop page builder. Hands down, this is the easiest, quickest way to create and manage an ecommerce site.

With a website in place, you have complete control over your branding and website appearance, content, and products. This forms a hub connecting multiple marketplaces and sales channels for your business.

Create your online store in minutes!

Looking to sell online? Develop and launch your store with 10Web AI Ecommerce Website Builder.

Generate Your Store

Gumroad

This platform is unique in that you only pay platform fees when you make a sale, making it ideal for selling digital products. You pay a 10% fee on each sale, and Gumroad handles the rest.

Teachable

This is a go-to solution for educators and course creators. Teachable hosts your online courses, and you get a payout minus the transaction fee. Rates vary according to the plan you choose.

Etsy

Esty has an attractive, large audience that pays good money for a variety of niche products and artsy types. Transaction fees are manageable and align with similar alternatives.

You’ll need to learn the ropes to do well in this massive marketplace. Investigating successful Etsy sellers in your market space can shed some light on how they’re racking up sales.

Sellfy

This platform simplifies selling digital products with a straightforward fee structure and built-in marketing tools. You’ll pay a monthly subscription on Sellfy, but the only transaction fees you’ll see are from PayPal or Stripe.

The idea is the same across all platforms that match your product type and audience interests:

1. Customize your store so that it reflects your brand.
2. Create dazzling product pages with keyword-rich descriptions and clear images.
3. Lure in new customers with engaging content shared across your online persona.

Put it on blast with targeted marketing strategies

Social media is a fertile ground for ecommerce. If you want to learn how to start a digital product business, rubbing elbows with your audience provides an irreplaceable opportunity. As a sales channel, social media is unique in that you connect directly with your audience.

It’s the online equivalent of hanging out on your front porch while chatting with the neighbors. You share a little of yourself, and everybody gets a chance to connect and enjoy common interests.

If there’s chemistry, maybe some of those chatty visitors will turn into customers.

Tala’s Grace Beverley emphasizes that social media “enables you to create audiences that would be really tough to create otherwise.” She adds that these platforms are “hugely important in creating communities of people who really care about my businesses and what they’re doing and what they’re going to do next.”

Platforms like Instagram and TikTok form the foundation of some businesses, allowing them to create connections, showcase products, and get instant feedback.

That’s how Amanda Okafor rode in on a swell of interest surrounding her African net sponges. She used TikTok’s viral nature to promote her sponges and became a business owner.

I think stories like Beverley’s or Okafor’s are encouraging and exciting for new business owners. Maybe you should bring that up at the next online neighborhood gathering! As consumers, knowing the story behind the business or product we’re buying helps us feel good about the purchase.

Getting the word out

Marketing tactics for selling digital products online:

1. Social media: Focus on authenticity and engagement. Share your journey, post behind-the-scenes content, and showcase testimonials.
2. Content marketing: Write blogs, shoot videos, or create tutorials that educate while subtly promoting your product.
3. Email marketing: Build a list of subscribers and tempt them with exclusive offers or valuable insights.
4. Collaborations: Partner with influencers or brands to expand your reach.
5. Paid ads: Use targeted campaigns on platforms like Facebook or Google to drive traffic.

Customer service for the win

Happy customers are your MVPs. They tend to share their love of your products, eventually turning others into loyal fans. Here’s how to keep everyone coming back for more:

1. Feedback: Provide multiple chances for customers to provide feedback. This is how to improve your products and services. Be sure to act on suggestions, positive or critical.
2. FAQs: Keep the answers to commonly asked questions accessible and visible. Ditto for store policies on payments, fulfillment, guarantees, and so on.
3. Responsive support: No one likes to send an email out into the void with no indication of what might (or might not) happen next. Reassure customers with quick responses and resolutions. Chatbots can offer 24/7 assistance to help cover any gaps.

Personalized customer support is an opportunity to build trust and credibility. Don’t be shy! A thoughtful response goes a long way. Customer feedback is equally important. Remember, you’ll need to find out what resonates with your audience to expand.

Moving on up: scaling your digital products business

With a successful launch under your belt, it’s time to focus on sustainable growth. Fortunately, with all that great customer experience and their feedback on products, you’ve got a lodestone to guide you.

Gumroad’s Lavingia touts the value of the rapid feedback loop provided by social media. The ability to share ideas allows him to understand how to meet customer needs effectively. This leads to efficient product improvements and additions.

Customer-centric philosophy

Providing value to customers by solving a problem or improving a daily issue is a roadmap to sustainable growth. Ankur Jain’s success with Bilt Rewards is a prime example of the power of addressing real problems.

Jain built a loyalty program centered around a real-life issue, enabling renters to earn rewards while paying rent. His customer-centric approach addressed a widespread need and allowed Bilt Rewards to scale effectively, growing its user base and increasing its market presence.

Practical scaling strategies

1. Expand your catalog: Let customer insights drive product development, then use that experience to identify and test new products.
2. Automate everything you can: Use tools for marketing, payments, orders, customer management — anything that optimizes operations and frees up time. Consider bringing in outside help for time-consuming or routine tasks.
3. Encourage customer loyalty: Reward repeat customers with discounts, loyalty programs, exclusive offers, and a personalized experience.
4. Collaborations: Partner with other brands, community voices, or influencers to tap into new audiences and revenue streams.
5. Paid advertising: Use paid advertising with Google Ads, Facebook, Instagram, or social media platforms to target different demographics and fuel growth.

Try your hand at some of these strategies and keep an ear out for feedback that will help you achieve long-term success and build a loyal and engaged audience.

For a head start in selling digital products, try using the AI Ecommerce Website Builder to create an online store.

Once you set up your website, you can use it as a foundation to build your brand and:

• Publish content to captivate your audience and improve SEO
• Integrate marketing and ecommerce tools
• Encourage traffic from marketplaces to a website you control
• Start a digital product business and sell without the platform fees

Why wait? Setting up a shop takes only a few minutes, and you can start promoting and selling digital products right away!

Create your online store in minutes!

Looking to sell online? Develop and launch your store with 10Web AI Ecommerce Website Builder.

Generate Your Store

FAQ

Create your online store in minutes!

Create your online store in minutes!

Develop and launch your store with 10Web AI Ecommerce Website Builder.

Generate Your Store