Digital Products

How Profitable Is A Digital Products? (Updated for 2024)

Pat Walls

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Updated: September 6th, 2024

How Profitable Is A Digital Products? (Updated for 2024)

So you want to start a digital products?

And the first question that came to your mind was, “well, are digital products actually profitable?”

With a market size of $950B - there’s plenty of business to go around.

Especially considering:

You could start a digital products with as low as $10
Based on our data, digital products generate an average of $3.13M per year
You could see gross margins as high as 95% with digital products

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a digital products.

Let’s dive in!

Is a digital products profitable?

Yes, a digital products is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $3.13M per year with an estimated gross margin of 40%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your digital products.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your digital products is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is a digital products worth it?

If you’re wondering if a digital products is worth it, the answer is a big YES. With digital products, you have the potential to earn $3.13M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $950B, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a digital products to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful digital products case studies.

Examples Of Profitable Digital Products

Here are a few examples of profitable digital products, and a few more details about them:

1. Rejoin Media ($1.2M/year)

Michael Gardon, the CEO of Rejoin Media, came up with the idea for his business after realizing that he wanted to break out of the 9-5 job and create a more flexible and balanced lifestyle. With capital to acquire sites and expertise in SEO and content marketing, Gardon launched Rejoin as a portfolio of web-based businesses, generating around $100,000 per month in revenue and growing at a rate of 20% per month. Today, he is focused on diversifying his business and building new products and marketing channels.

Is it profitable? Yes
How much money it makes: $1.2M/year
How much did it cost to start: $50K

CareerCloud

Discover how a founder grew their business to over 1 million users in just one year, generating $10 million in revenue through innovative marketing strategies and strategic partnerships, offering valuable insights for aspiring entrepreneurs looking to scale their own ventures efficiently and effectively.

Read this case study

Read by 1,029 founders

2. Aun Digital ($240K/year)

When a friend's cleaning business couldn't afford a website, Aun Ali discovered that many UAE startups faced similar challenges, inspiring him to launch Aun Digital. The firm offers affordable, comprehensive digital services and now generates annual revenue between $200,000 and $300,000, serving 20 regular clients.

Is it profitable? Yes
What's the gross margin? 24%
How much money it makes: $240K/year
How much did it cost to start: $60K

How I Scaled My Web Design Agency To $250K/Year

Aun Digital, a UAE-based web design company, generated $200,000 to $300,000 annually by offering affordable and reliable digital services to small businesses, startups, and medium-sized enterprises, with 20 regular clients per year and an average project cost ranging from $10,000 to $15,000.

Read this case study

Read by 653 founders

3. Contrarian Thinking ($3M/year)

Codie Sanchez, the founder of Contrarian Thinking, came up with the idea for her business after experiencing numerous career changes and realizing that money was the key to solving problems. After working in finance and investing, she decided to blend her love for writing, investing, and teaching others to create a company that helps people achieve financial freedom. Through her premium membership community, Contrarian Cashflow, she teaches members how to add more cash-flowing income streams to their portfolios and build the life they have always dreamed of. With over 100,000 newsletter subscribers, a community of 1.5 million people, and a run rate of $3 million this year, Contrarian Thinking is empowering individuals to challenge the status quo and shape their own destinies.

Is it profitable? Yes
How much money it makes: $3M/year
How much did it cost to start: $5K

My Finance Newsletter & Community Hit A $3M Run Rate This Year

Contrarian Thinking is a premium membership community that teaches its 1.5 million members how to implement cash flow strategies to achieve financial freedom, with a current run rate of $3 million and a goal of $50 million ARR in five years.

Read this case study

Read by 5,851 founders

Learn more about starting a digital products:

Where to start?

-> How much does it cost to start a digital products?
-> Pros and cons of a digital products

Need inspiration?

-> Other digital products success stories

Other resources

How much can you make with a digital products?

With a digital products, you can make an average of $3.13M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $10. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a digital products make a week?

Based on our data, average weekly revenue for a digital products ranges around $65.3K. As such, you could see monthly revenues of $261K.

To know if your digital products achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your digital products.

How much do digital products owners make?

The income of a digital products owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established digital products is about $65.3K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as a digital products owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Digital Products Profit Margins

Generally speaking, a digital products can expect profit margin of around 40%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a digital products, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, digital products owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, digital products owners can ensure long-term sustainability and profitability for their business.

Digital products owner salary

The salary of a digital products owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established digital products, in a prime position, might see an average weekly salary around the ballpark of $26.1K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a digital products may be a promising business to start - but the success of your digital products mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable digital products.