If you're new to e-commerce and looking to dive into selling digital art or other products, you're in the right place. Shopify is a powerful platform, and in 2024, the gross value of merchandise sold through Shopify in the United States will exceed $145 billion.
That's a massive opportunity for anyone looking to get started.
In this guide, we'll walk you through the essentials of selling digital products on Shopify. We’ll cover how to manage both digital and physical products in one store and handle taxes in different regions, making the process smooth and efficient.
Let's get started!
Why Choose to Sell Digital Products on Shopify?
Digital products are reshaping how we do business—and the numbers prove it. The digital economy added $2.57 trillion to the U.S. economy alone, showing just how much demand exists for ebooks, courses, software, and more. You create once, sell forever.
But why pick Shopify? Shopify powers 10% of the global ecommerce software market, making it a trusted choice for everyone from hobbyists to big brands. It's designed to handle digital sales smoothly. You can set up automated downloads, secure payment gateways, and customizable storefronts in hours.
Here's what makes digital products + Shopify a smart combo:
- Instant delivery: No waiting for shipping. Customers get access immediately after purchase.
- Low overhead: No warehouses, no production costs—just your creativity.
- Scalability: Sell 10 copies or 10,000 without extra work.
Shopify's built-in tools make it easy to sell digital products. Worried about piracy? Protect your files with watermarks or expiring links. Want to bundle products? Try creating a "course + template" package. 24/7 customer support ensures you'll always have help with any questions you have.
Consider this: physical businesses lose sleep over supply chains and returns. With digital products, your biggest challenge is marketing—not logistics. And Shopify's app store (think email marketing integrations, SEO helpers) turns even beginners into savvy sellers.
How to Sell Digital Products on Shopify？
Step 1: Create a Shopify Account
To get started, visit the Shopify website and sign up for an account. Choose a plan that suits your needs, whether you're just starting or looking for more advanced features.
After registering, you'll need to set up your store by selecting a store name and adding other important details such as your contact information and payment methods.
Once everything is set up, your store will be ready for customization.
Step 2: Install a Digital Product Sales App
Shopify doesn't natively support selling digital products, but you can easily solve this by installing an app. One popular option is Digital Downloads, a free app provided by Shopify.
This app allows you to add digital products to your store and provides automatic download links to customers after their purchase.
To install the app, go to the Shopify App Store, search for Digital Downloads, and follow the installation steps.
Step 3: Add Digital Products to Your Store
Now it's time to add your digital products. In your Shopify admin panel, navigate to the Products section and click on Add Product.
Fill in the title, description, price, and any other relevant details about the product. Since you are selling digital products, ensure you uncheck the "This is a physical product" option in the "Shipping" section.
This ensures no shipping charges are applied to your product.
Step 4: Upload Digital Files
Once your product details are in place, it's time to upload the digital files. Using the app you installed earlier, like Digital Downloads, you can upload the file directly to the product.
The app will automatically create a download link for your customers once they complete their purchase. This link will be sent to them via email or displayed on the checkout page.
Step 5: Set Up Payment Methods
For your store to accept payments, you'll need to set up payment options. Shopify supports several payment gateways such as PayPal, Shopify Payments, and Stripe.
Choose a payment method that suits your target audience and ensures a smooth transaction process for your customers.
Step 6: Configure Email Templates
Once a customer makes a purchase, they will receive an email confirmation with a download link.
It's important to customize your order confirmation emails to ensure they include the download link and any relevant instructions for accessing the digital product.
This not only improves the customer experience but also reduces potential confusion.
Step 7: Test the Purchase Process
Before officially launching your store, it's important to test the entire purchasing process.
This includes checking the payment process, ensuring the digital files are delivered correctly, and confirming that the email notifications are sent as expected.
By testing this, you can avoid any surprises when real customers make purchases.
Step 8: Promote Your Store
Now that your digital products are set up and ready for sale, it's time to start promoting your store.
Use various marketing strategies such as social media, paid ads, and email campaigns to attract potential customers.
By driving traffic to your Shopify store, you increase the chances of generating sales and growing your online business.
5 Best Apps for Selling Digital Products on Shopify
Filemonk: Ideal for Large Files and Flexibility
Filemonk stands out as a robust app designed to handle large digital files. It's particularly useful for merchants dealing with video files or software products.
One of its key benefits is its ability to manage and deliver files smoothly with automatic link expiration and download limits. With 24/7 customer support and a simple integration process, it's a favorite for sellers needing reliable digital file delivery.
Big Digital Download: Comprehensive Digital Sales Solution
If you're looking for simplicity and reliability, Big Digital Download is a top contender. It offers a clear and automated way to sell digital files, from software to videos.
This app allows you to set expiration dates for download links and generate license keys for your products. The free plan is a great way to get started, with affordable upgrades available for larger files and more storage.
Big Digital Download also integrates seamlessly with Shopify's checkout and email systems, making it a smooth experience for both the seller and the buyer.
SendOwl: Simplified Digital Product Sales
SendOwl is known for its ease of use and simple setup. It enables you to sell digital files, subscriptions, and even physical products bundled with digital content.
SendOwl supports affiliate marketing and offers advanced reporting tools to track your sales performance. For merchants looking for a simple yet powerful app, SendOwl's streamlined process makes it an appealing choice.
FetchApp: Great for Handling Multiple File Types
FetchApp is another solid option for Shopify users. It allows for automatic file delivery and integrates easily with your Shopify store, making it perfect for businesses looking for a no-fuss solution to sell digital products.
FetchApp offers a free plan for smaller sellers and scales up as your needs grow. It's an efficient choice for anyone dealing with multiple file formats or those who need to sell bundles of digital products.
Digital Downloads by Shopify: The Simple Built-In Solution
If you prefer sticking to Shopify's native solutions, the Digital Downloads app is a great option. This app is completely free and comes with the essential features like instant file delivery and download limits.
It's great for those just starting out or those selling a small range of digital products. Its direct integration with Shopify makes it an easy choice for new merchants who want to get their digital product sales off the ground quickly.
Read More:
- The 15 Best Dropshipping Apps for Shopify: Essential Tools for Success
- Tops 10+ Shopify Print on Demand Apps to Grow Your Business
How to Handle Sales Tax for Digital Products on Shopify?
Yes, you're on the right track. When selling digital products on Shopify, collecting sales tax based on the billing address is correct. Since there's no shipping address for digital items, the billing address is what matters. Shopify uses this to figure out the tax.
Setting It Up on Shopify
You need to tell Shopify how to charge tax. Here's how:
- Log into the Shopify Admin: Use your administrator account to log into the Shopify backend.
- Go to "Settings" and select "Taxes": Click on "Settings" in the lower-left corner, then select the "Taxes" option.
- Set Your Store Location: Make sure your store address and operational location are correctly set. This is crucial for determining the applicable tax rates.
- Enable Sales Tax Collection: In the "Tax Settings" section, check the "Collect sales tax" option. This will ensure that the system automatically calculates and charges the appropriate sales tax at checkout.
- Correctly Categorize Digital Products: For digital products, ensure that they are categorized as "Digital Products" in the product settings. This allows Shopify to handle the tax based on regional tax laws. For example, digital products may be exempt from tax in some regions.
Does It Vary by Location?
Yes, it does. In the U.S., every state has its own rules. For example:
- California: No tax on digital products like eBooks unless sold with something physical.
- New Mexico: Charges a 5.0% tax on digital stuff.
- New York: No tax on most digital products, but pre-written software gets taxed.
Canada taxes digital products too, but rates depend on the province. Wherever you sell, check local rules.
Watch Out for Economic Nexus
If you sell a lot—like over a certain number of orders or dollar amount—you might hit economic nexus. This means you must collect and send sales tax to that state or region. Keep an eye on your sales numbers.
Can You Sell Both Digital and Physical Products on Shopify?
You might want to sell both physical and digital products on Shopify, such as printing your designs on mugs. However, there are a few things you need to know to ensure a smooth process.
Custom Color Changing Mug (11oz) (Made in USA) - Print-On-Demand - PrintKK
First, you need to choose how to handle both types of products. There are apps that allow you to combine digital files with physical items in a single order. For example, you could sell a PDF file with a physical product, such as a custom LEGO part or an eBook with a printed book.
To set this up, you might consider apps like Simple Bundles and Kits, which combine multiple SKUs into one product. But keep in mind that if you're using Shopify's Starter Plan, you won't have access to apps that require editing your theme code.
Here are a few things to consider:
- Shipping for Physical Products: Shopify can handle shipping for physical items, including setting rates based on the destination.
- No Shipping for Digital Products: Digital files are delivered electronically, so no shipping fees are involved.
If you're looking for immediate file delivery after purchase, Shopify's Digital Downloads app can help. This app lets you add digital files to physical products and sends the download links immediately after purchase.
However, digital products might not be fulfilled automatically if they are bundled with physical products. In such cases, you can create separate listings for digital products so that download links are sent as soon as the payment is processed.
Overall, it's possible to manage both digital and physical products on Shopify. You just need to choose the right tools for smooth integration and timely delivery.
Expert Tips
Digital product store on Shopify is the ideal way to kick your e-commerce career.
Whether you're offering digital-only items or combining them with physical products, Shopify gives you the flexibility to create a seamless shopping experience.
Focus on the basics: choose the right apps, keep your store user-friendly, and make sure your customers have a smooth buying process.
Now, it's time to put your plan into action. Stay consistent, adapt to feedback, and you'll be on the path to success.
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