A quick intro to digital products + passive income (+ product ideas list)

A quick intro to digital products + passive income (+ 50 product ideas list) – Paper + Oats

What is passive income? 

Passive income is any stream of income in your business where you’re not trading dollars for hours, and instead you’re creating some kind of content once and selling it over and over again. The term passive income is thrown around a lot in the online business world, but it can be a little bit of a misnomer. Yes, in the end, passive income is indeed passive, but in the beginning it’s quite active, and usually it takes some additional seasons of activity to keep it all running smoothly and consistently. This stream of income is great for adding some recurring revenue to your business that can eventually run on autopilot, so you can focus on other aspects of running your business. 

What are digital products? 

Digital products are a way of creating passive income for your business. They are basically any type of information product you deliver electronically rather than physically ship. Some popular examples in the creative entrepreneur world would be online courses, video workshops, e-books, PDF guides, worksheets or printables, or design resources like icons, illustrations, stock photos, templates, and more. (See the mega list of digital product ideas included at the end of this post!) 

What are advantages to creating + selling digital products? 

There are many great reasons to sell digital products – mainly because it adds stream of passive income for your business. Again, they’re a lot of work upfront depending on the content you’re selling, but once they’re in place, you can sell them over and over on autopilot. For this reason, they’re more scalable than a traditional business model of selling a service or physical product. Since you’re no longer trading dollars for hours, the sky’s the limit for product development and potential income. 

Since nothing physical is produced or shipped, digital products are also far less expensive to produce (sometimes free to produce depending on the skills you have and programs you already use), so as a result they’re also much less risky. Worst case scenario, if no one buys your digital product, you’ll be out your time, but not necessarily much (if any) money. Finally, selling digital products related to existing services or products you already offer helps establish you as an expert in your eld and provides further education opportunities for your clients or colleagues. 

What are disadvantages to creating + selling digital products? 

The main downside that keeps many small business owners from selling digital products is the lack of control over the customer’s use of your product. There’s almost nothing you can do to keep a customer from sharing a digital file with a friend. But as a designer who’s been selling products like these for a long time, that’s just a risk that comes with the nature of this kind of business. For me, that risk is worth the return I see on my products.

I put as many things in place as I can to protect my work from being redistributed without consent, including copyright info + terms of use on PDF pages and my online spaces and product listings. For the most part, I think the majority of my customers are honest and have integrity, but I’m sure there are others out there who wouldn’t think twice about forwarding a paid product to a friend.

That being said, it’s also important to “patrol” your content, so to speak, and be aware of anyone trying to resell your products as their own. This is quite different than just forwarding a file to friend – when they’re profiting off of a product that you created, that is definitely something you want to take action on and put an end to.

Paid vs. free digital products + why it's good to have both

Digital products don’t necessarily have to be paid products, but it is good to make sure some kind of trade or transaction is taking place so you have something in return. A common way to do this is to exchange an email address instead of exchanging money. Using digital products as free incentives to signup for email lists is the most popular way of doing this, and one I highly recommend. (And one I use myself... hint hint... keep scrolling.)

It’s a good idea to have a combination of both paid and free digital products in your business because it allows your customer to give your products a test drive before investing. If you offer something free, they’ll be able to check out the quality of your work without any risk, and be more likely to purchase a paid product from you in the future.

Want to learn how I create, sell, and market digital products on Etsy as passive income?

Etsy on Autopilot – learn how to create, sell, and promote digital products on Etsy as passive income – Sign up at www.etsyonautopilot.com

My latest online course, Etsy on Autopilot, is your step-by-step plan to turning your passion and skill set into a profitable, automated online shop, harnessing the existing audience on Etsy. The full course is made up of 6 core lessons: Discovery, Research, Development, Publishing, Promoting, and Maintaining Your Shop. Whether you’re new to Etsy or new to digital products, Etsy on Autopilot gives you the tools, resources, and know-how to confidently create + sell a digital product that your audience can’t help but love and buy – on a platform they already trust.

If you're curious about what this course is all about, and whether or not it's for you, why not give it a try? Join me for the totally FREE 7-Day Pilot Run – one email per day that gives you an in-depth sneak peek and freebie from every lesson of the course. By the end of the week, you'll know exactly what this course can do for you, and you'll already have some of the tools in your pocket to get started with digital products on Etsy.

Drop in your email below, and I'll send you the first lesson's pilot run right away – which includes a list of 50 digital product ideas to help get your wheels turning on this whole passive income thing.


If you’re curious about all the pieces of the giant puzzle that is creating + selling a digital product WITHOUT it feeling overwhelming (i.e. we’ll take it one step at a time), check out my free email course, The Digital Product Roadmap. This free course walks you through the 8 checkpoints for driving your digital product from idea to launch, and includes resources + action steps for each checkpoint. Signup below, and we’ll get started this week!

Digital Product Roadmap - free email course by Paper + Oats


Kelsey Baldwin

Graphic designer + blogger providing design resources to help creative entrepreneurs navigate the world of design + branding for digital products so they can share what they know.

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