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How to Create Passive Income by Selling Digital Products

Do you want to create digital passive income and make money online?

Today’s growing reliance on e-commerce continuously increases the demand for digital products. As such, there are many opportunities to sell online and create passive income streams—without the hassle that typically comes with selling physical goods.

Whether you’re looking for a low-cost side hustle or a way to scale your full-time business, digital and downloadable products can help.

🔎 In this article, I’ll cover:

What Digital Passive Income Is

An increasing number of people are looking for ways to create multiple streams of income. Recent research found that 67% of Americans have a small business or side hustle, with 80% starting one to increase their income.

Passive income is income that requires little to no ongoing effort to generate. It’s often contrasted with active or earned income, which requires constant effort.

Often dubbed as a way of ‘making money while you sleep’, passive income can be a great way to supplement current income or reach your financial goals.

As the name implies, digital passive income is passive income generated from digital products or services, such as eBooks, software, online courses, etc.

Once created and listed on your online store, these products can generate revenue continuously, requiring minimal ongoing effort for maintenance or delivery.

Why Sell Digital Products?

Compared to physical goods, digital and downloadable products offer unique advantages.

  • Low overhead costs: There are no physical products to store or ship, so you don’t have to worry about inventory, manufacturing, or shipping costs. This helps ensure higher profit margins. Other than any upfront costs needed to create your products, there aren’t many expenses to worry about.
  • Global reach: With the power of the internet, your digital products can reach a worldwide audience, breaking geographical barriers.
  • Scalability: Scaling your digital product sales doesn’t require a proportional increase in resources or effort. Once you create your product, sell it over and over again with minimal effort and replicate it infinitely without incurring more production costs.
  • Flexibility: Another major benefit of selling digital products online is that there are so many options to choose from. For instance, many bloggers and professionals can make digital marketing passive income via downloadable content, such as a Canva template or PDF guide. On the other hand, web developers can sell software and other digital products and tools.

The cost-efficiency and flexibility of digital selling make it a worthwhile endeavor, even for beginners. The key is figuring out what to offer.

Best Passive Income Digital Product Ideas

When deciding on the first digital product to sell, consider what you could create that combines your unique knowledge, skills, and expertise with something that can be easily packaged and distributed to others online.

To brainstorm, it may help to explore some of the most profitable e-commerce niches.

The most important thing is to create high-quality products that are useful, well-designed, and fairly priced.

To help give you a better understanding of your options, let’s look at some popular examples of digital downloads and product ideas for earning passive income.

eBook & Online courses

If you have expertise in a particular area, creating an eBook or online course is a perfect (and profitable) way to share your knowledge with others.

You can write an eBook on any topic, from cooking to personal finance to business.

The same goes for online courses, which are an excellent format for teaching skills to others.

An example of selling an online course to earn digital passive income online.

Online courses can be used for educating audiences on anything from how to use a specific software program to how to start a business. Courses can be offered as a stand-alone product or as a series on a membership site.

Stock photos, graphics & digital art

If you are a photographer or graphic designer, create a photography website to showcase and sell your work.

A photography site demo.

The same goes for graphics, including fonts or presets.

WordPress plugins & website themes

If you are a developer, perhaps you could create and sell WordPress plugins or themes. This can be a lucrative way to earn passive income, as there is a high demand for high-quality WordPress products.

The same goes for mobile apps and software. You can license and sell desktop software as well as open-source software.

Monetized website or blog content

If you have a passion for a particular topic, you can start a blog or website about it. Once you have built a following, monetize your site through advertising, affiliate marketing, or selling products or services.

A digital download store in WordPress.

You could also create memberships and subscriptions, offer downloadable content, etc.

Downloadable and/or printable files

Digital downloads are ideal for passive income. Create and sell downloadable files on a variety of topics, such as marketing, design, and productivity. If you already run a blog, online store, or website, digital downloads make excellent content upgrades.

Downloadable and printable products include everything from resume templates and Excel spreadsheets to special event materials like wedding invitations and planners.

Where to Sell Digital Products

The type of digital product you’re selling influences the best channel to use to promote and sell it.

Some social media platforms now offer online selling functionality. But there are strict requirements and your reach is limited.

Another option is third-party online marketplaces, like Etsy and Amazon. However, in addition to being primarily geared toward selling personalized crafts and physical goods, they’re also incredibly crowded and saturated environments.

For maximum control over your online business, I recommend creating your own website with WordPress.

A self-hosted WordPress site is affordable, beginner-friendly, and easy to customize. It also supports a wide variety of e-commerce platform integrations and plugins.

How to Make Digital Passive Income

Note that for the following tutorial, I’ll assume you already have a WordPress website. If not, you can get one up and running by purchasing a SiteGround Managed EDD hosting plan.

1. Get Easy Digital Downloads

The best way to make passive income selling digital products in WordPress is with the Easy Digital Downloads plugin:

The Easy Digital Downloads plugin for creating digital passive income.

EDD is the best WordPress eCommerce solution for selling digital products and downloads. It’s powerful, user-friendly, and offers a ton of extensions to enhance and expand its functionality and features.

This is a free version available. However, for access to premium extensions, upgrade to an EDD Pro plan:

Once you download the EDD plugin, install it on your WordPress site (Plugins » Add New » Upload Plugin » Choose File):

Uploading the Easy Digital Downloads Pro plugin in WordPress.

Once activated, select Get Started to launch the Onboarding Wizard:

The EDD Onboarding Wizard

This takes you through the initial steps of setting up your online shop.

2. Configure Your Store Settings

There are a handful of important settings to configure to get your digital download store up and running. To begin, go to Downloads » Settings:

The Easy Digital Downloads settings.

Under General, enter your preferred currency and business information. You’ll also find the default pages set for your online store, such as the checkout, shop, and order confirmation.

Next, you’ll need to set up a payment gateway to accept payments online. Easy Digital Downloads supports a variety of payment gateways, including PayPal, Stripe, and Authorize.net.

Go to Downloads » Settings » Payments:

The Easy Digital Downloads payment settings.

Then select your Active Gateways and Default Gateway. I recommend Stripe Pro or PayPal Commerce.

You’ll also need to connect your site to the payment gateway. For instance, if you choose Stripe, navigate to the Stripe tab, then select Connect to Stripe:

The option to connect Stripe in WordPress using Easy Digital Downloads.

Refer to our Stripe documentation for step-by-step guidance on this process.

There are a handful of additional ways to customize and configure your store. I won’t go into all of them in this post, but feel free to refer to:

3. Add Your Digital Products

Now it’s time to begin adding new products to your online store.

Note that the exact process varies depending on what you’re selling. Feel free to explore more detailed, step-by-step tutorials on how to sell each type of digital product:

DocumentsOnline coursesPhotos
eBooksSoftwareVideos
TemplatesThemes Subscriptions
SpreadsheetsPluginsServices

To start, go to Downloads » Add New from your WordPress dashboard:

Adding a new digital download in WordPress via Easy Digital Downloads.

Enter a title for your product and add a description:

Adding a new digital download page in WordPress.

Then under Pricing Options, set your product pricing:

You can also offer different pricing options, such as variable pricing or recurring payments.

Next, go to the Download Files section to upload your digital file:

The section to add download files for a digital product in EDD/WordPress.

You can upload the file by selecting the link icon under File URL. Easy Digital Downloads supports a variety of file formats, including PDFs, MP3s, and ZIP files.

Then you add a name under File Name. When you’re done, select Add New File.

To the right, under Download Image, upload or select an image from the Media Library to feature. This will be the product image that is displayed on your shop and product pages.

Setting a featured image for a digital download product in WordPress.

When you’re finished creating your product, click the Publish button. To see how the product page appears on the front end of your site, select View download:

A product page demo to sell digital products in WordPress.

Repeat this process for as many products as you want to sell on your site.

For more options, check out how to manage files downloads.

4. Install Conversion & Automation Tools

Of course, the goal of digital passive income is to minimize the amount of effort you have to put into it. One of the ways to do that is to leverage e-commerce automation tools.

EDD offers a plethora of built-in features and add-ons to help boost the success of your digital product business. The best ones to use depend on the type of products you’re selling and your business model.

To explore your options, go to Downloads » Extensions:

The EDD extensions screen in WordPress.

Some EDD extensions that can help with generating passive income specifically include:

Another WordPress plugin ideal for generating leads and increasing conversions is OptinMonster:

The OptinMonster website.

This is the leading solution for conversion and optimization tools in WordPress. Use it to create lead magnets, such as exit-intent popups, to drive engagement and conversions.

For more ideas, refer to:

5. Publish & Promote Your Digital Store

Once you have published your products and pushed your store live, you need to promote them to your target audience. You can use social media, email and content marketing, and other online marketing channels to reach potential customers.

To boost Search Engine Optimization (SEO), install a plugin like AIOSEO:

The AIOSEO WordPress plugin website.

This helps you utilize descriptive titles, detailed descriptions, high-quality visuals, and relevant keywords to improve SEO and attract more customers.

There are also ways to encourage customers to help promote your online store. For instance, offer discounts and other rewards for leaving a review or sharing products on their social media profiles.

To incorporate email into your marketing strategy, consider starting a newsletter. Then add a newsletter opt-in form on your website to easily grow your email list.

FAQs on Digital Passive Income

Let’s wrap up with some frequently asked questions about selling products for digital passive income.

Are digital products profitable compared to physical goods?

Absolutely! Digital products boast high profit margins due to their replicable nature and minimal production costs.

How do I deliver my digital products to customers?

Easy Digital Downloads automatically sends a download link to your customers after they purchase your product. The download link can be found on the purchase receipt as well as on the thank you/receipt page and in the downloads section of your customers’ account. You could also choose to manually deliver your products.

How do I handle customer support for digital downloads?

EDD offers robust customer management features, allowing you to provide support, manage licenses, and handle customer queries efficiently.

Start Building Digital Passive Income

Selling online products is a great way for beginners, entrepreneurs, and business owners to earn a digital passive income. With Easy Digital Downloads, it’s easy to set up an online store and start selling digital products to a global audience.

If you haven’t already, grab your Easy Digital Downloads pass today to get started with your store in minutes:

What’s next? If you want to get more visitors to your site, learn how to increase traffic to your online store.

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