How to Sell & Manage Digital Products & Downloads with WooCommerce

Selling digital products has become an enticing opportunity for a wide range of individuals, from store owners to bloggers and content creators. Whether it’s eBooks, music files, images, sewing patterns, or fonts, these digital downloads can stand alone or complement physical products and services seamlessly.

The beauty of digital products lies in their ability to generate revenue without the hassles of inventory management, shipping, or storage. If you already have a WordPress site, venturing into this realm is remarkably simple. According to Built With, over 6 million active sites use WooCommerce, making it the top eCommerce platform with a market dominance of over 23%.

This guide will walk you through the process of selling digital products with WooCommerce, a popular WordPress plugin. While the concept may seem familiar to selling physical goods, there are crucial distinctions to understand. Whether you are offering software, audio files, NFTs, or written content, this post will delve into the specifics you need to consider for a successful digital product venture.

WooCommerce and product types

WooCommerce is a robust eCommerce platform that offers a variety of product types to sell, ranging from physical goods to digital items. One of the vital distinctions within WooCommerce’s digital offerings is between “virtual” and “downloadable” products.

WooCommerce empowers businesses to sell a broad spectrum of products, such as:

• Simple products: Standard physical items with no customization, like a book.
• Variable products: Physical items with variations, such as t-shirts in different sizes and colors.
• Downloadable products: Digital assets that users can download post-purchase, like eBooks or music.
• Virtual products: Non-physical items that don’t involve downloading, like services or online consultations.
• External or affiliate products: Items promoted on your store but sold on another site.
• Subscription products: Recurring offerings needing the WooCommerce Subscriptions extension.
• Membership products: Exclusive content or products needing the WooCommerce Memberships extension.
• Bookable products: Reservable services or items, using the Booking and Appointment extension. Each of these product types caters to various business needs. However, for businesses keen on selling digital goods, understanding the nuances between “virtual” and “downloadable” products is crucial.

Virtual products are intangible offerings that don’t need shipping or downloading. They’re ideal for:

• Services (e.g., consultation, design work)
• Online content access (e.g., recipe libraries, forums)
• Coaching packages

On the other hand, downloadable products are a subset of virtual products that involve sending a file to the customer post-purchase. They’re perfect for:

• eBooks, PDFs, and other documents
• Software, graphics, font files, etc.
• Music, audio clips, stock images, and more

For example, WordPress themes and plugins. Once the customer pays the money, a link or method to download the particular theme or plugin will be available. 

In WooCommerce’s terminology:

• Regular products involve shipping.
• Virtual products don’t require shipping.
• Downloadable products can be either regular or virtual, with downloadable files attached.

Popular digital products compatible with WooCommerce range from e-books, videos, software, and music to graphic designs and membership content. The advantage of WooCommerce’s digital offerings is the absence of inventory management, ensuring seamless business operations.

Setting Up Your WooCommerce Store

Create a staging WooCommerce store using InstaWP →

The initial setup of creating a WooCommerce store for digital products is similar to normal WooCommerce installation.

• Download and install the WooCommerce plugin on your WordPress website
• WooCommerce wizard guides you through
• You need to create essential pages such as Shop, Cart, Checkout, and My Account.

InstaWP takes care of all the above basic setups. 

Select your WooCommerce plugin of pre-installation (from the eCommerce category). 

Alternatively, you can select WooCommerce as your site’s configuration.

Next, from WooCommerce installation to the basic setup, everything will be done with a single click. This helps you buy some time, and you can straightaway jump into store configurations.

Pro tip: If you want, you can save your store as a template and use it next time to create a similar store with the same themes, settings, and plugins with a click. 

Configuring WooCommerce for Digital Product Sales:

Selling digital products with WooCommerce involves configuring your online store to ensure a seamless experience for your customers. 

For starters, you have to set up the download method. Log in and navigate to WooCommerce > Settings > Products > Downloadable Products.

Three File Download Methods  are available for downloading files:

• Force Downloads: Utilizing PHP, initiates the file download, ensuring document security. However, sturdy servers are essential, especially for larger files to avoid timeouts.
• Redirect Only: This method redirects customers to a file through a direct URL, giving anyone with the link access.
• X-Accel-Redirect / X-Sendfile: Requires a specific server module. It’s a secure method, but you need to coordinate with your hosting provider for setup.

If you’ve opted for Force Downloads or X-Accel-Redirect/X-Sendfile, consider enabling the “Allow using redirect mode (insecure) as a last resort” option. This switch will redirect when a file cannot be served using the chosen method, acting as a fail-safe.

Determine Access Restrictions:

• Activate “Downloads Require Login” if you want users to log in before accessing downloads. This means you’d need to disable guest checkout.
• Enable “Grant access to downloadable products after payment” if you wish to allow file access while orders are still in the “Processing” phase rather than only after they’ve been “Completed.”

Filename Security: To ensure your files’ security, opt for the “Append a unique string to filename for security” option. Activating this adds a unique string to the filename, making it more secure.

Save Changes: Once you’ve adjusted your settings to fit your needs, remember to save.

Choose a payment gateway that is suitable for digital sales 

Now that we have configured the download method, we have to decide the payment gateways. Having a reliable payment gateway is of paramount importance to ensure that your digital sales run smoothly. 

Before settling down on a payment gateway, make sure which method best suits your needs and then explore the options in that. The payment gateway types can be broadly categorized as below. 

1. Modern vs. Classic

• Classic Payment Gateways: Traditionally, these required a merchant account, a unique bank account designated for the receipt of credit card payments. Classic gateways, like Authorize.Net and WorldPay, might need a longer setup and some technical know-how. But, they generally have lower per-transaction fees, making them more cost-effective for larger stores.
• Modern Payment Gateways: Examples include PayPal and Stripe. These gateways don’t require a separate merchant account, making the setup process quicker. However, they might charge slightly higher per-transaction fees.

2. Hosted vs. Integrated Gateways

• Hosted Payment Gateways: These take customers to an external platform for payment. While this ensures the payment provider handles security and compliance, it can sometimes result in reduced conversions, especially if customers are unfamiliar with the external platform.
• Integrated Payment Gateways: These are connected directly to your e-commerce site, allowing customers to pay without being redirected. They offer a more seamless user experience but might demand more from you in terms of setup and compliance responsibilities.

The simpler and easier the checkout process is the more likely the customers will convert. Choose a payment method that helps you provide an optimized customer experience.  Other factors you should consider are-

Fees and charges:  As a rule of thumb always choose a payment option that levies fewer fees. Providing multiple payment options might help you provide a choice of convenience to the customers.

Multiple Currency acceptance: Owning a digital product store avoids international shipping nightmares, but still you have to handle the foreign currency. Choose a payment option that lets you accept a wide range of currencies and also provides a competitive conversion rate. 

Automated recurring payments for subscriptions: Subscription models help you provide a steady stream of income. Providing automatic renewal for recurring payments helps your customers enjoy your service or digital products without any interruption. 

Micromanage Charges easily with Payment Gateway based Fees and Discounts 

Managing fees and charges for all payment gateways might be difficult. Sometimes as a store owner, you might need to ask the customers to pay the extra fees. WooCommerce plugins like Payment Gateway based Fees and Discount lets you levy extra fees as a fixed amount or a percentage of the cart total. Plus, you can use it to apply discounts that act as cashback offers for particular payment gateways. 

Payment Gateway based Fees and Discounts come with some awesome features. Here’s what you can do:

1. Multiple Fees for Each Gateway: Set different fees for each payment gateway. Plus, add an extra fee for more flexibility.
2. Category-Specific Charges: Apply extra charges to specific product categories. You can even exclude certain categories if you want.
3. Location-Based Fees: Customize fees based on the customer’s country or state.
4. Transparency is Key: Show fee details on the product page. Keep everything clear and transparent for your customers.
5. Flexible Pricing: Charge fees as a percentage of the order total or a fixed amount. You can even set zero payment charges or skip the extra fees if the order subtotal meets a minimum amount.

Setting up tax and shipping options for digital products.

Following the EU VAT law adjustments for digital goods on 1 January 2015, B2C transactions now demand VAT to be calculated based on the customer’s location. As a store owner, you must collect location evidence, typically through the customer’s IP or Billing Address.

To align your WooCommerce store with these regulations, it’s crucial to correctly set up VAT rates, especially if dealing with digital products.

Setting Up Your Tax Classes

1. For Exclusive Digital Goods Sales: Add VAT rates under WooCommerce’s Standard Rates.
2. For Mixed Product Sales: If your inventory includes both digital and regular items:

• Navigate to: WooCommerce > Settings > Tax.
• Click on the Additional Tax Classes setting.
• Introduce a new tax class, say “Digital Goods”.
• Save your changes. Now, assign tax rates to this new class.

Setting Up the EU VAT Rates 

To input the EU VAT Rates:

1. Checking the Current VAT Rates: EU’s official VAT rates are available on the Europa website. Ensure you keep these rates updated in your store.
2. Inserting the Rates:

• Proceed to: WooCommerce > Settings > Tax > Digital Goods.
• Populate the VAT rates for all EU nations. For a detailed walkthrough, refer to “Setting Up Tax Rates in WooCommerce”.

3. Importing VAT Rates: 

If you’ve received a vat_rates.csv or a similar file, you can import it to hasten the process.

• Click on “Import Rates”.
• Use the prompted importer to load the file.
• On successfully importing, the tax rate screen will display all your rates.

After these steps, any product under the “Digital Goods” tax class will levy tax based on the buyer’s location, not your store’s.

Assigning the Tax Class to Products

1. For Individual Products:

• Navigate to: Products > All Products.
• Select a product and go to the “General” tab.
• Choose the desired tax class from the “Tax Class” dropdown.
• Update the product details.

2. For Multiple Products:

• From Products > All Products, select the products you wish to update.
• Opt for “Edit” from the bulk actions menu.
• Apply.
• In the bulk edit view, select the desired tax class.
• Click “Update” to finalize the changes.

By integrating these tax classes and rates, you ensure a smoother transaction process for both you and your customers. Always make sure to periodically check the official EU websites for any rate changes and update your store accordingly.

Adding Digital Products to Your WooCommerce Store:

The power of WooCommerce lies in its flexibility. This includes the ability to sell and manage digital products easily. In order to add a digital product to your WooCommerce store, go to  Products → Add New

Add Basic Product Details: Once you’re in the product creation screen, start by entering the name of your digital product. Make it engaging and descriptive. Craft a comprehensive description that highlights the benefits of your offering, mentioning the file type and delivery method. Conclude with a compelling call to action.

Configure as Digital Product: In the “Product data” section, tick “Virtual” and “Downloadable.” This step eliminates unnecessary shipping options. Keep it as a “Simple Product.”

Add Pricing: Assign a price to your digital product, and use WooCommerce’s flexibility to schedule sales with specified start and end dates.

Uploading Your Digital File to be Downloaded: Click “Add File” and provide a descriptive name. Choose between an external link or a local file upload.

Download Specifications: Set download limits and expiry duration for the download link. Leave it blank for unlimited downloads and no expiration.

Product Presentation: Input a brief description that appears at the top of the product page. Choose a representative product image and add more to the product gallery.

Once you set all the product details, rules, and pricing, add tags and categories to your digital products. Adding tags and categories will help the customers easily find relevant products and it also helps you upsell and cross-sell products. 

Setting Up Demos for Digital Products like Themes and Plugins using InstaWP

Setting up demos for WordPress products, especially for themes and plugins, has been a significant pain point for many. Relying on WP multi-site or utilizing in-house bash scripts often leaves developers frustrated. This method also doesn’t offer crucial insights about product usage.

Fortunately, InstaWP offers an elegant solution. Renowned WordPress product creators such as GravityForms, WP Job Manager, and Tyche Softwares among many others, have embraced InstaWP for product demonstrations.

Here’s a concise tutorial on setting up your product demo with InstaWP:

How to Set Up a Product Demo Using InstaWP?

So you’ve got an amazing product, and you want to showcase it to the world. Why not make a stunning product demo to impress your potential users? With InstaWP, it’s easier than you might think. Create an account on InstaWp and follow the steps below-

Step 1 – Create a New Site:

1. Log into InstaWP and choose “Add New” under Sites.
2. Optimize your demo by setting the Server Location.
3. Label your site and adjust settings.
4. Click “Create Site,” and InstaWP handles the installation.
5. You can easily access your WordPress admin dashboard with the Magic Login link.

Step 2 – Setting up the Product Demo :

1. Install your plugin/theme and essential plugins.
2. Create a theme, a landing page, and add sample content/pages.
3. Guide users with a demo message on the Dashboard.
4. Update relevant fields in Settings > General.

Step 3 – Save Your Site as a Shared Template:

1. Capture your site as a Shared Template for others.
2. Mark it as “Shared” and consider “Instant Template” for faster loading.
3. Retrieve the shared link from Templates > Shared.

To customize your template’s landing page, go to Templates > Shared, and choose “Edit” for your template. Adjust branding elements like your logo, email templates, privacy policies, custom CSS, and colors. Fine-tune advanced settings for site lifespan, email collection preferences, auto-login, email provider selection, and user rights related to site cloning and file modifications.

With these steps, your product demo is ready to impress. When users click “Launch Demo,” they’ll access your WordPress admin dashboard or a specific page.

Tracking and Analyzing Digital Product Sales:

Once your store is up and running, it’s essential to monitor sales data for growth. WooCommerce simplifies this. To access your data, head to the Analytics section in your WordPress dashboard.

Overview: Here, you’ll find key data like total sales, net sales, views, and products sold. You can also filter data by date ranges for deeper insights.

Detailed Insights: Click on options under Analytics to access specific data on products, variations, coupons, stock, and more.

For instance, the Categories section breaks down sales by store categories. If you sell sheet music, you can compare piano and guitar music sales.

In the Downloads section, you can focus on digital product sales.

For a broader view, including the impact of advertising campaigns, set up Google Analytics.

Regularly check your WooCommerce data to uncover areas for improvement and boost your sales.

The built-in WooCommerce analytics gives you an insight on sales performance but not the abandoned cart users. You can use plugins like Abandoned Cart Pro for WooCommerce to get a better insight on abandonment cart details. The plugin captures customers’ emails at multiple touch points so that you can get in touch with them and convert the users by sending reminders & personalized discounts via emails, SMS, and Facebook messenger.  Check out our must have WooCommerce plugins collection for more such unique plugins. 

Digital Products + InstaWP for seamless user experience

In the digital age, selling and managing digital products with WooCommerce is a powerful avenue for entrepreneurs. As discussed, the platform offers a user-friendly experience from product creation to sales analytics. By following the steps outlined in this guide, you can effortlessly set up your digital store, configure products, and access valuable insights.

With WooCommerce’s versatility, you can adapt to your specific needs, whether you’re selling software, e-books, or other digital content.

Combining the WooCommerce flexibility with InstaWP’s agile character lets you deliver a seamless digital demo experience. You can onboard hosting users, manage multiple sites, and maintain up to date product demos easily in one place. 
In fact, there is a lot more that you can do with InstaWP. Go through these use cases to find the most advantageous InstaWP workflows for your use.