Got a knack for something you love doing? Whether you’re running an ecommerce empire or just dreaming up ways to turn a passion into profit, digital products could be your golden ticket. 

They’re simple to start, endlessly scalable, and perfect for reaching the right audience—wherever they are.

Not sure where to start with digital products? You’re not alone—it can feel a bit overwhelming at first. What exactly counts as a digital product? How do you make one? Where do you sell it? And how do you keep HMRC happy while you’re at it? Don’t worry, we’ve got you covered. Let’s break it down step by step.

What is a digital product?

A digital product is something you create, sell, and deliver entirely online. There’s no stock to manage, no packaging to deal with, and no trips to the post office required. It could be as simple as a downloadable guide or as complex as a subscription-based membership site.

Some common examples include:

• Ebooks: Think of "how-to" guides, niche-specific books, or even fiction.
• Courses: Perfect if you have expertise to share—whether it’s baking, coding, or public speaking. We’d recommend you check out our guide on selling profitable courses online to learn more. 
• Templates: Social media graphics, budgeting spreadsheets, or email marketing templates.
• Membership sites: A platform where members pay for ongoing access to exclusive content.
• Software or apps: For those with a technical flair, this could be a game-changer.

The beauty of digital products is that once you’ve created them, they can be sold over and over again without needing to restock.
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Why create them? What’s the potential?

1. Low overheads, high-profit margins

Unlike physical products, you don’t have to worry about production costs, delivery fees, or inventory storage. This means a higher portion of your revenue stays in your pocket.

2. Scalability

Whether you sell one copy or a thousand, a digital product doesn’t require more effort to sustain it once it’s created. It’s a fantastic way to earn passive income.

3. Global reach

Selling digital products online means you’re not limited to local customers. Your audience could be halfway around the world, and it wouldn’t make a difference.

4. Diversifying income streams

If you already have a business, digital products can complement what you’re already doing.  For example, a personal trainer could sell workout plans, or a graphic designer could offer premade logo templates.

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How to create digital products

Step 1: Solve a problem

The best digital products solve a specific problem or address a need. Start by asking yourself:

• What questions do people frequently ask you?
• What skills or knowledge do you have that others would pay to learn?
• What tools or shortcuts could you create to make someone’s life easier?

For example, if you’re a consultant, you might create a template for writing a business plan. If you’re a personal trainer, maybe it’s a 30-day fitness challenge.

Step 2: Choose your format

Decide what type of product will work best for your audience. Some ideas:

• Written content (ebooks, PDFs)
• Video or audio (courses, webinars, tutorials)
• Interactive tools (spreadsheets, calculators)
• Downloadable design assets (graphics, templates)

Step 3: Create it

This is where the magic happens. Use tools like Canva for design, platforms like Teachable or Thinkific for courses, and simple tools like Google Docs for e-books. Whatever you create, make sure it’s polished and professional—it’s a reflection of your brand.

Step 4: Test it

Before you launch, test your product with a small group. Get feedback and make improvements. This step can save you from releasing something that doesn’t quite hit the mark.

Places to sell digital products

You’ve got options when it comes to selling your creations:

1. Your own website

Using your own site gives you complete control over branding, pricing, and customer experience. If you don’t have one yet, platforms like Shopify or WordPress make it easy to get started.

2. Marketplaces

Sites like Etsy, Gumroad, and Creative Market are great for templates and other creative assets. For courses, look to Udemy or Teachable.

3. Social media

If you’ve already got an audience, social media can be a powerful selling tool. Platforms like Instagram and TikTok now allow for direct selling, or you can link to your product in your bio.

4. Membership Platforms

For ongoing income, platforms like Patreon or Find HR (a membership business we support) can work wonders.
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Four tips to market your digital products

Once your digital product is ready, the hard work of creation is mostly behind you. Aside from the occasional update—like tweaking for new laws or trends—it’s a product that can practically sell itself. 

But here’s the catch: even the most amazing digital product won’t make a single sale if no one knows it exists. That’s why marketing is key. Let’s explore three simple ways to make sure your product gets in front of the right people.

1. Build a community first

Start building an audience before you launch your product. Use social media, blogs, or YouTube to share valuable content and establish yourself as an expert. When your product is ready, you’ll already have people who trust you and are eager to buy.

2. Use FOMO (fear of missing out)

Create urgency by offering limited-time discounts or bonuses for early buyers. For example, “Buy before [date] and get a free bonus template!”

3. Collaborate

Partner with influencers or other creators in your niche to promote your product. Their endorsement can bring in new customers who trust their recommendations.

4. Write SEO-rich product descriptions

Your product descriptions can make all the difference when it comes to selling digital products. Be sure to include relevant keywords that your potential customers are likely to use when searching for your product. 

For example, if you're selling business plans, include terms like "business plan template," "startup business plan," or "business plan for small business" to help your product show up in search results. Clear product descriptions can also make it easier for customers to understand exactly what they’re getting. 
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How to stay HMRC compliant

Selling digital products is exciting, but don’t forget about your responsibilities as a business owner. Even if you only ever sell digital products as a side hustle, you still need to make sure you’re being compliant. 

Here’s what you need to know:

1. Register as self-employed

If you earn more than £1,000 in a tax year from self-employment—whether that’s from digital product sales or any other self-employed venture—you’ll need to register with HMRC as self-employed. 

This threshold applies to your total income from all self-employed activities combined, so make sure to keep track of your earnings across the board.

2. Track your income and expenses

Keep track of your income and expenses to stay on top of your finances. Record every sale and any costs involved in creating, marketing, or selling your products. Using accounting software (like ours) can simplify this process, saving you time and ensuring your records are always accurate.

3. Understand VAT

If you sell digital products in the UK or EU, you may need to charge VAT. The rules can be tricky, especially for cross-border sales, so it’s worth getting advice from an accountant. However, to get a quick understanding, we’d recommend reading our article “VAT for digital services made easy”.

4. Stay on top of your Self Assessment

If you need to register as self-employed, you’ll also be required to file a Self-Assessment tax return each year. For example, for the tax year 2024/25, the deadline for submitting your return online is 31 January 2026. If you’re filing a paper return, the deadline is 31 October 2025.

Missing these dates can result in fines, so it’s important to stay organised and submit your return on time to avoid penalties. Keeping track of these deadlines throughout the year makes the process much easier when the time comes.

Your next step to success

Creating and selling digital products can be a rewarding way to grow your income, whether it’s a side hustle or a full-fledged business. By solving problems for your audience, choosing the right platforms, and staying compliant with HMRC, you can set yourself up for success.

And if you’re not quite sure that digital products are for you, there are so many other side hustles that you can manage around your full time job. Alternatively, if you’re looking to launch a business, we’d recommend checking out our article covering low-cost business ideas with high-profit potential. 

Need help with the financial side of things? From VAT to business structure advice, our online accountants can help you every step of the way. Ready to get started? Let’s make it happen!

Book a call

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