A digital product business is a company that creates and sells products that exist only in digital form. These products are often based on software or online services, such as mobile apps, e-books, online courses, streaming platforms, and design software. Customers access or use a product through their digital devices, and the business focuses on delivering value through virtual features, content, or functionality.

In 2023, spending on digital goods and services represented an estimated 2.7% of the global customer’s wallet. There is significant potential for growth in this market as more and more people gain access to the internet and digital devices. Below, we’ll discuss what you should know about starting a digital product business, including what digital products are in demand, how to package these products, and how Stripe can help you manage this type of business.

What’s in this article?

• Why start a digital product business?
  
• What types of digital products are in demand?
  
• How should you create and package your digital products?
  
• How can Stripe help digital product businesses?
  
• What challenges might you face in this business and how do you overcome them?
  

Why start a digital product business?

Digital product businesses provide entrepreneurs with creative freedom and the potential to scale. Here’s a closer look at the advantages that lead business owners to start working in this sector:

• Scalability: Digital products can be created once and sold repeatedly without substantial ongoing production costs.

• Lower overhead: Unlike with physical products, there’s no manufacturing, inventory, or shipping. This reduces up-front costs and operations.

• International reach: You can market and sell digital products to anyone with an internet connection, no matter where they are located.

• Passive income potential: Many digital products, such as online courses and e-books, can generate revenue over time without constant hands-on involvement, especially if you automate sales and delivery.

• Creative freedom: Digital products allow you to turn your knowledge, skills, or passions into something valuable for others.

• Adaptability: You can update or improve digital products quickly to stay relevant and meet customers’ expectations, without starting from scratch.

What types of digital products are in demand?

Worthwhile digital products solve problems, save time, or offer value to people’s digital lives.
Here are some digital products that are currently in demand.

Educational content

• Online courses: Covering topics such as coding, business, personal development, fitness, and creative skills

• E-books: Especially on niche topics or how-to guides

• Workshops and webinars: Live or recorded, with a focus on skills or strategies

• Membership-based sites: Ongoing learning opportunities or exclusive content

Digital tools and software

• Mobile apps: From productivity and fitness to gaming and social networking

• Software-as-a-service (SaaS): Project management platforms, customer relationship management (CRM) solutions, or graphic design apps

• Plug-ins and extensions: Enhancements for WordPress, Shopify, Chrome, and many other platforms

Creative assets

• Templates: Website themes, social media templates, or résumé designs

• Stock assets: Stock photos, videos, sound effects, or music

• Fonts and graphics: Custom typefaces or digital illustrations

Entertainment and lifestyle

• Streaming content: Podcasts, videos, or live streams

• Digital art: Illustrations, wallpapers, or non-fungible tokens (NFTs)

• Games: Mobile, desktop, or browser-based

Business and productivity resources

• Guides and tool kits: Business plans, marketing templates, or financial trackers

• Automation scripts: Tools to automate repetitive tasks

• Analytics: Software for tracking or improving performance

Health and wellness

• Fitness plans: Workout guides, programs, or apps

• Meditation and mindfulness: Guided meditations, soundscapes, or habit tracking

• Meal planners: Customizable digital meal plans for nutrition tracking

Subscription services

• Content libraries: Access to curated resources, books, or software

• Premium newsletters: Deep dives into specialized topics or industries

Virtual experiences

• Augmented and virtual reality content: Virtual tours, training simulations, or immersive games

• Interactive learning: Gamified educational apps

Financial tracking

• Budgeting spreadsheets: Ready-to-use financial planning templates

• Crypto tools: Wallet trackers or portfolio management software

Personalization services

• Custom designs: Logos, branding kits, or personal artwork

• AI-powered tools: Personalized recommendations, AI writing, or image generation

How should you create and package your digital products?

To build and package a digital product, you need to turn your expertise or idea into something people can use and find beneficial. Here’s how to begin.

Start with a problem or a passion

What’s something you can teach, solve, or improve for others? What’s something you care about deeply? Here are some examples:

• If you’re great at design, maybe you can make a collection of Canva templates.

• If you’ve figured out a life hack, turn it into an e-book or online course.

• If you’re a coder, maybe you might create a tool that simplifies a tedious task.

Focus on finding something that’s genuinely helpful or enjoyable.

Keep it simple but polished

Don’t overcomplicate your first product. Start with a manageable but high-quality product. Here are some examples:

• Create templates or guides using Canva or Google Docs. Ensure they look clean and professional and are easy to use.

• Courses can consist of a few videos recorded with your phone and polished with iMovie or CapCut.

• Apps don’t need to offer a ton of features. Instead, focus on solving one problem really well.

Your product doesn’t have to be perfect, but it needs to feel intentional, with thoughtful design and clear instructions.

Create an experience

Customers don’t just want a PDF or a video; they want an experience. Add details such as:

• A “welcome” page or intro video that explains how to use the product

• Checklists, bonus resources, and quick wins to boost engagement

• Features that make users feel they’re getting more than they expected

For example, if you’re selling an online course, create milestones, provide downloadable summaries, and consider building a community where users can share their progress.

Enhance your delivery

Use platforms such as Gumroad, Payhip, and Etsy to sell and deliver your product in just a few clicks so users aren’t left searching for their purchases. Automate aspects such as:

• Instant download links for templates or e-books

• Drip-feeding content for courses to urge people to participate

• Thank-you emails or follow-ups through apps like Zapier

Make delivery feel effortless for your customers. They should be able to buy, install, and start enjoying what you’ve made in seconds or minutes.

Build anticipation before you launch

Getting people excited is almost as important as building your digital product. To create interest, share sneak peeks, tips, or parts of your process. This can include:

• Posting behind-the-scenes clips on social media

• Rewarding early supporters with a free sample or beta version

• Gathering testimonials from testers to demonstrate value

This anticipation creates buzz and gives your product a head start when it’s ready.

Sell the results

When you package your product, don’t just describe what it is. Instead, focus on the outcomes people can expect. Here are some examples:

• Instead of saying, “This is a new meal planning guide,” say, “Spend 10 minutes a week planning healthy meals and save hours of stress every day.”

• Instead of saying, “This is a meditation app,” try, “Feel calmer and more focused in just five minutes every day.”

Learn as you go

Don’t stress about getting everything right the first time. Start at a manageable scale, listen to feedback, and make improvements. View your first digital product as a foundation on which to learn and build.

How can Stripe help digital product businesses?

Stripe helps digital product businesses by simplifying payments and automating important processes, and it includes features made specifically for online businesses. Here’s how it can help.

Accept payments globally

Stripe lets you accept payments from almost anywhere. Your customers can pay with credit cards, debit cards, digital wallets (e.g., Apple Pay, Google Pay), or bank transfers. Plus, it supports more than 135 currencies so you can sell internationally without worrying about currency conversion.

Sell subscriptions and memberships

Stripe simplifies recurring billing. This is important if your digital product is a subscription-based service (e.g., a course platform, a SaaS product) or a membership-based site. With Stripe, you can:

• Set up automatic renewals

• Offer free trials or tiered pricing plans

• Manage billing updates and customer invoices automatically

Integrate with easy checkouts

Stripe’s prebuilt checkout pages are refined for conversion, mobile friendly, and easy to integrate into your website. You can customize these pages with your branding to make the purchasing process feel familiar to customers.

Handle one-time payments

Stripe supports quick one-time payments for digital products such as e-books, templates, and guides. You can create payment links that redirect customers to a secure checkout without coding.

Deliver digital products automatically

Stripe integrates with programs such as Gumroad, SendOwl, and Zapier to automate product delivery. When a customer makes a purchase, they’re instantly sent a download link or access instructions, without manual effort on your part.

Manage taxes

Digital products often require compliance with sales tax, value-added tax (VAT), or goods and services tax (GST) rules, depending on the region. Stripe Tax automatically calculates, collects, and remits taxes based on the customer’s location, which makes legal and accounting compliance much simpler.

Track performance

The Stripe Dashboard provides detailed insight into your sales, revenue trends, and customer behavior. You can use this data to fine-tune pricing, run promotions, or analyze which products are performing best.

Keep data secure

Stripe handles data security for your business. Its systems comply with the Payment Card Industry Data Security Standard (PCI DSS) and use advanced encryption to protect payment information. This builds customer confidence, especially if your product is new to the market.

Support for custom integrations

If you’re technologically skilled or work with developers, Stripe’s application programming interfaces (APIs) let you build solutions, such as custom checkout flows, to suit your specific needs.

Scale effortlessly

Whether you’re selling e-books or running a full-fledged SaaS company, Stripe is designed to scale. As your business grows, you can add more advanced features, including fraud prevention and advanced reporting, or you can even venture into selling physical products.

What challenges might you face in this business and how do you overcome them?

Running a digital product business can be incredibly rewarding, but it comes with certain hurdles. Here are some of the challenges you might face and how to overcome them.

Standing out in a crowded market

The digital product space is saturated, whether it’s e-books, courses, apps, or SaaS. With so many businesses and products fighting for attention, “good enough” products don’t cut it anymore. Here’s how to overcome it:

• Find your niche: Don’t try to appeal to everyone. Focus on a specific audience with a unique issue. The more targeted your solution is, the more likely you are to connect with buyers.

• Obsess over value: Deliver more than expected with additional resources, personalized touches, or ongoing support. Build something so valuable that it becomes an easy buy.

• Brand deeply, not broadly: Invest in storytelling and a strong brand identity that resonates with your audience. You want people to feel connected to your brand.

Managing customer expectations

Digital products can lead to high customer expectations because people might expect immediate results or flawless performance. Here’s how to overcome it:

• Set clear expectations: Your sales page, onboarding process, or product documentation should outline what customers can and can’t expect. For example, if your course promises “higher productivity,” explain how long it typically takes to see results and what they might look like.

• Provide actionable guidance: Ensure customers can score quick wins early on. For example, in an online course, give them a mini task that delivers immediate value by the end of lesson one.

• Offer excellent support: Whether it’s via an FAQ section, live chat, or automated follow-ups, make it easy for customers to get answers or troubleshoot issues.

Balancing pricing with perceived value

Pricing digital products can feel complicated. If you price too low, you risk undervaluing your work. But if you set prices too high, you could scare off buyers. Here’s how to overcome it:

• Anchor your pricing: Create tiered options that let customers choose a level of investment. For example, try offering a basic version, a mid-tier option with bonus features, and a premium tier with personalized support.

• Use testimonials and proof: Feature case studies, customer success stories, or metrics that prove your product’s value. People are often willing to pay more if they see real results.

• Experiment with pricing: Run A/B tests to identify where to strike the balance between value and affordability.

Retaining customers for long-term growth

Acquiring new customers is expensive, and if subscriptions power your product, churn can decrease your profit. Here’s how to overcome it:

• Focus on retention: Continually improve your product. Add new features, updates, or content based on user feedback.

• Build community: Whether it’s through a private group, live events, or regular email updates, give customers a reason to continue using your product.

• Incentivize loyalty: Offer discounts or exclusive perks for long-term customers or subscribers.

Addressing constant tech changes

Technology is always developing, and what’s cutting-edge today can feel outdated in a year. Here’s how to overcome it:

• Stay informed: Watch for emerging trends in your industry, but don’t chase every single one of them. Thoughtfully adopt only what fits your product and audience.

• Improve regularly: Build your product on a flexible platform that enables updates without a complete rebuild.

• Future-proof where you can: Invest in flexible infrastructure, such as APIs and modular designs, so you can adapt as needed.

Handling piracy and copycats

Digital products are easy to replicate so you might encounter piracy or competitors that try to steal your ideas. Here’s how to overcome it:

• Protect your intellectual property where possible: To deter unauthorized sharing, use watermarks, licensing agreements, or limited-access delivery platforms.

• Focus on your brand, not just the product: A strong brand is harder to copy and encourages customers to choose you over a knockoff.

• Build a loyal audience: People are less likely to pirate or support competitors if they feel connected to you and your mission.

Marketing effectively without overspending

Throwing money at ads without a clear strategy is a common trap, and organic outreach can feel painfully slow. Here’s how to overcome it:

• Lean on partnerships: Collaborate with influencers, affiliates, or complementary brands to reach your audience without major ad spending.

• Use content marketing strategically: Share value-packed, niche-specific content (e.g., blogs, videos, podcasts) to attract the right people. When it’s executed well, content builds confidence and authority.

• Run microcampaigns: Test different messages, platforms, or discounts with small budgets to find out what works before you scale.

Scaling without losing quality

As demand grows, maintaining the same level of quality and customer experience can be a challenge. Here’s how to overcome it:

• Automate wisely: Use automation for repetitive tasks (e.g., email sequences, onboarding, payment processing), while adding personal touches where they matter most.

• Build a team: As revenue grows, outsource or hire for specialized tasks (e.g., customer support, marketing) to free up your time.

• Create flexible systems: Whether you’re using templates for processes or modular product designs, assure that your business can expand without constant reinvention.