Digital Product Development: A Beginner’s Guide

Written by Tiara Jones
January 5, 2024
Digital Product Development

Entrepreneurs who are looking for unique revenue streams and creative ways of making money might want to consider getting into digital product development. Digital products include everything from website templates to ebooks, online courses, and software applications. If your set-up is solid and you’ve done the homework, digital products can provide a reliable source of passive income. 

Let’s get into the benefits of selling a digital product, how to develop a digital product, and the tools used for digital product development. 

What Is a Digital Product?

A digital product is a non-physical item exclusively sold online to customers. This means you won’t have to think about inventory, shipping, or other challenges that come with physical products. Typically, revenue is generated by paying for access to an online newsletter, course, digital download like an ebook, or subscription to an app or membership. Digital products are not limited to one type of business but can be leveraged by product-based, e-commerce, brick-and-mortar, or service-based businesses. Below, we discuss various types of e-commerce product examples to help explain the types of digital product offerings out there. 

Multi-passionate creatives can use digital products to not only diversify their income but also use their gifts to provide products in various forms to their customers. For example, a web designer might choose to start a digital marketplace where customers can buy pre-made website templates, flyers, or stationery products for customization. These kinds of marketplaces could also offer downloadable icon packs for websites, email and logo templates. 

Educators or professionals well-versed in a subject could create a central hub with downloadable e-books or a subscription to online courses. Online courses can be fantastic for niche industries. For example, a nutritionist might advertise a monthly meal plan based on criteria you input. An educator may provide a series of extra lessons in a specific subject to provide valuable e-learning resources. A chef could provide detailed tips, recipes, or grocery lists for their interested customers.

Benefits of Selling a Digital Product

There are many benefits to selling a digital product, particularly for industries such as education, fashion, logistics, and real estate. Let’s review a few additional benefits of offering a digital product in your business:

Low overhead

There’s no need to buy office equipment, invest in machinery, or pay high office rental costs. Selling digital products is one of the most cost-effective ways of starting a new business. 

No major setup costs

I fully understand how funds can be very limited initially. We recommend digital products as a great starting point for new entrepreneurs because they require minimal upfront costs. The most important cost that often can’t be avoided is your digital host or where people will come to find and buy your digital product. This could be your own website, which would require a website host like Siteground and a domain from a vendor like Squarespace, or you could purchase a subscription to a third-party platform that could host your product for you (we will discuss a few of these platforms later in the blog in Tools to Develop a Digital Product). There are many options to choose from based on your budget to keep this cost at a minimum. 

Passive income

One of the advantages of digital products is the time and effort it takes to go from idea to selling to your audience. Your effort and direct involvement are only needed in the creation and designing process. After the digital product is complete, customers will be able to purchase that product over and over with little to no involvement from you. As they say, time is money, and you want to use it wisely. Digital products aren’t a once-off purchase. Each time someone downloads your product, you earn money while you are sleeping, on vacation, or working on a different service offer or product in your business.  Diversifying your income using digital products can also help you fund other areas of your business, especially while in the startup stage. 

How To Develop a Digital Product

The key is developing a digital product in an industry you know well and enjoy.  Leveraging your experience and knowledge can be hugely profitable for your business. 

Read also: Entrepreneurship for Beginners for our section on finding your passion to help you brainstorm a list of topics that you can use for your digital products. 

Step 1: Explore the problem 

Research challenges customers have in your specific industry. Break down the what, who, and why to fully understand how your customer experiences the problem. Establish what’s not working, where the bottleneck lies, and where people would like to see improvements. This can also help you drill down into your target audience. 

Step 2: Brainstorm solutions 

After your initial research, you should have a better understanding of your customer’s frustrations and how you can help. Begin to map out workable solutions. It is important to note that your digital product doesn’t have to solve it all. Remember that customers will pay for convenience and products that can make their lives easier. For example, taking the time to compile a specific set of information into one place and removing the need to spend hours searching online is valuable and convenient. 

Your idea and solution don’t have to be unique; they just have to be better than your competitors’— study them and see where they fall short. Oftentimes, the goal isn’t to reinvent the wheel but rather to fill in the gaps that are missing from a competitor!

Step 3: Create an outline 

Now that you have an idea of the problem and what you want to offer, begin to outline all of the information you plan to include and how you want to present it to your customer. Consider the form factor for your digital product and what will make the most sense for usability. This will help you determine if your product should be a video course, ebook, PDF guide, checklist, app, etc. For example, if your target audience is a mom, you might want to consider a form factor that is easy and quick to digest because they are looking for ways to save time. Taking into consideration how the customer will interact with the product will give you an advantage over other competitors. 

Step 4: Develop the product 

Believe it or not, but 70% of the work is complete. At this point, you can use tools like Canva to design your outline into a final product or hire a virtual assistant or developer to bring your research and outline all together into a high-value digital product. 

Step 5: Beta test 

Have you ever purchased a product that, in theory, appeared to be a great idea but, in practice, didn’t work as intended? This is what you want to try to avoid with your digital product. Beta testing your product with a small group of users will help highlight major issues before officially launching your digital product. During your beta test, you will also want to evaluate how the product is delivered to the user, whether that will be a direct download, provided via email, or access to third-party software. Filter through all of the feedback and make any necessary changes to improve your product. Even after your official launch, set a reminder to reach out to customers for reviews. Your reviews from paid customers will help you continue fine-tuning your product and could spark ideas for a series of additional digital products to increase your sales. 

Quick Tip: This development process just doesn’t apply to digital products. But use it when creating physical products and service offers.

Tools to Develop a Digital Product 

The whole idea behind digital products is to work smarter and not harder. Research tools that are easy to use and cost-effective to develop your product. If you don’t want to go it alone, you can always enlist the help of a designer. 

The following platforms can be useful for creating and designing your product: 

  • Canva is an intuitive platform useful for ebooks, checklists, web graphics, content calendars, and website wireframes.
  • Google Docs is a cloud-based platform for you to store stock images, financial spreadsheets, and more.
  • Adobe Express is an all-in-one editor and design platform for print work such as adverts, banners, and flyers.
  • Microsoft Designer is a platform for creating various types of graphics and templates. 

These platforms are useful for selling and marketing your product: 

  • Flodesk is an e-commerce solution with workflows to sell digital downloads and newsletters.
  • Kajabi and Podia are commercial platforms to advertise your courses and monetize your expert content.
  • Samcart, ThriveCart, and Stripe checkout are great for selling digital products and offer drag-and-drop templates for checkout systems.
  • Thinkific is a hub for you to market your courses and communities and also offers an assortment of web themes for an all-in-one solution. 
  • Skillshare is a video-based learning community filled with educational information.
  • Patreon allows users to monetize their business in different ways, including offering digital downloads, podcasts, and access to exclusive content and communities. 

Armed with the above knowledge, you’re bound to build a successful digital product. Did this overview help you prep for your first digital product? Let us know in the comments below!

*Please note that some of the links provided are affiliate links, meaning, at no additional cost to you, we will earn a commission if you decide to click through and make a purchase.

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Meet the Writer:

Tiara Jones is a business advisor for new online entrepreneurs looking to bring their business ideas to life. As a former systems engineer for a strategic investor, she’s had the opportunity to work with over 50 startups helping them develop and test products and build a strategy around their product roadmap for their target audience.

The StartCollective was created to be an accessible digital library of resources to help creatives start, build, and follow through with their ideas.


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