Article | 6 min read

Building A Marketplace To Sell Digital Products With Digital Downloads

Build a Marketplace
Author
Khyati Buddhadev
Editor
Manav Gupta
Published
October 14, 2024
Last Updated
December 10, 2024

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Millennials, Gen Z, and Gen X make up a big chunk of today’s consumer market, prioritizing convenience and rapid access to products and services. This shift has propelled substantial growth in the Digital Products and Downloads market.

Streaming platforms like iTunes, BandCamp have overtaken traditional CDs and DVDs for music consumption, while e-readers and Kindle apps have redefined reading experiences. Platforms like AppSumo has revolutionalized the software retail.

The journey begins with understanding who would want to create such a platform and why:

  • Software Companies: Businesses in the software development sector aiming to create a marketplace for downloadable software, tools, or apps, offering customers a secure platform to buy digital solutions.
  • Creators and Content Providers: Companies seeking to help independent creators sell their digital works, such as music, photography, or digital art, by providing a marketplace where creators can manage their products and customers.
  • E-learning Platforms: Businesses wanting to build a marketplace to sell online courses, tutorials, and educational materials, offering a platform for instructors to upload and manage their digital content.
  • Niche Digital Goods Vendors: Businesses that specialize in selling niche digital products, such as templates, graphics, or printables, and want to connect with vendors offering similar items to build a thriving digital marketplace.

In this blog, we'll break down step by step what you need to do to build a digital products marketplace with ease.

  • Why you should step into the world of creating a digital product and download marketplace
  • Key features you must instill in your digital product and download online business
  • How to monetize your product and what future trends are shaping the industry.

1. Why Build a Marketplace for Digital Products and Downloads

The strong demand for digital consumption and creation fuels an industry growing at a 10.61% CAGR, largely driven by the widespread adoption of the digital marketplace.

Building a marketplace for digital products and downloads can be a highly rewarding business with many benefits for creators and customers alike. Following are the reasons why it's a strong business idea for you:

i. Low overhead and scalability:

  • Digital and downloadable products don't need physical storage or shipping, cutting overhead costs.
  • Scalability is quick and easy without physical products to ship when demand and consumer numbers increase.

Example: Gumroad- a platform that allows creators to sell digital products like eBooks, music, and software directly to consumers

ii. Growing Demand for digital products

  • Digital goods like digital arts, digital files, digital assets, etc have become mainstream due to increased demand across various industries.
  • Instant access to products makes the digital e-commerce market versatile and appealing to diverse audiences.

Example: Etsy- a platform for a diverse range of creators, to showcase the appeal of digital products to a wide audience.

iii. Global reach and 24/7 accessibility

  • Digital marketplace allows global accessibility giving agency to consumers and vendors to buy and sell any type of digital goods anytime, anywhere.
  • Continuous product accessibility allows for passive income from purchases and downloads without active marketplace involvement.

Example: Creative Market- a digital marketplace that allows designers and artists around the globe to sell their digital assets, such as graphics, templates, and fonts.

iv. Opportunities for niche markets

  • When you start selling digital products or create a multi-vendor marketplace for them to give a platform to sell digital goods, you get open up to multiple niches such as design templates, coding resources, educational tools, or digital art.
  • Focusing on one exclusive niche gives you an edge over the competition of the existing marketplace.

Example: ThemeForest- specializes in selling website templates and themes, catering specifically to web developers and designers.

Turn your Shopify store into a multi-vendor marketplace and boost your revenue by 2-5x. With 5000+ integrations & open API support, go beyond traditional use cases and bring a revolution!

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Now that you have made up your mind to build your online digital product marketplace, understand the types of digital downloads and products:

I. Service listings marketplace:

A marketplace for digital services, where freelancers and experts offer downloadable services, like design assets or software. Examples include Fiverr and Upwork, where clients purchase services, and deliverables can often be downloaded upon completion.

II. Peer-to-Peer (P2P) marketplace:

A marketplace connecting individual creators with buyers directly, allowing anyone to sell their digital products, from templates to courses. Etsy and Gumroad are popular P2P platforms for digital creators, fostering a community-focused ecosystem.

III. Digital rental marketplace:

A platform for renting access to digital products for a limited time, such as premium software, educational content, or design tools. Udemy offers this model through time-based access to courses, creating a flexible option for consumers.

IV. Subscription-based marketplace:

A recurring revenue model where users subscribe for ongoing access to digital products or services, such as design resources, stock photos, or software plugins. Envato Elements operates in this way, offering unlimited downloads for subscribers.

V. Second-hand marketplace:

A marketplace for resale of digital licenses or products, where users can buy and sell pre-owned digital items, such as software licenses or e-books. While still an emerging concept, some platforms like Sellfy support this type of resale for limited digital products.

"... I needed a solution to convert my vendors' currency into mine, a feature no other marketplace solution offered... I required automatic synchronization of my vendors' inventory (and product prices) with mine... Shipturtle developed an efficient solution for this …“

Tuomo Juvonen
Sasskistore, Poland

3. Key Features of a Successful Digital Products and Downloads Marketplace

For your online marketplace for digital products and downloads to grow, the following features are a must-have. 

I. Vendor management

For vendors: Instill functionalities that allow them to one-step or email register their online stores, manage their profiles, upload their product lists with high-quality pictures and visual representations, and track product online sales easily. This will give them greater control over their offerings and help them engage transparently with their potential customers. 

For Consumers: The vendor management feature should offer a carefully chosen range of trustworthy sellers, boosting consumer confidence and encouraging them to return to product pages.

II. Product/service listing management

For vendors: A user-friendly listing system makes it easy for vendors to add, update, and organize their products or services. They can add details like descriptions and high-quality images to make their offerings look more appealing and easy to find for consumers. 

For Consumers: A well-organized product list enables customers to effortlessly navigate the marketplace, easily finding the popular digital products they seek. A comprehensive product description empowers consumers to make informed purchasing decisions, ultimately reducing cart abandonment and returns.

III. Download management

For Vendors: Let the vendor efficiently manage their digital assets on your platform. Allow them to seamlessly upload, organize, and categorize their files. Allow them to track download statistics, monitor product performance, and update files when necessary, all within a centralized dashboard. 

For Consumers: Ensure the buyers have a secure and easy delivery/ download of the digital products. Facilitate them with automated download links, real-time tracking, and expiration settings, safeguarding intellectual property while providing a hassle-free purchasing experience.

IV. Secure payment gateways

For vendors: A secure payment gateway is indispensable for your e-commerce website. It prevents fraud and instills confidence in vendors regarding timely payouts, thus protecting your digital e-commerce presence. 

For Consumers: Consumers prefer a platform where they know their financial information is safe. To build trust, your platform should offer reliable payment options such as PayPal, Stripe, etc, making them feel secure and more likely to complete their purchases.

V. Industry-specific filters and search capabilities

For Vendors: Tailored filters and search tools help people find vendors' products more easily. This feature helps products get more visibility, especially in marketplaces that cater to specific niches and focus on a specific community of buyers. For example, the Amazon Kindle store helps book enthusiasts access eBooks they like easily and in no time. 

For Consumers: Advanced search capabilities and filters help the consumer save time and effort. Quickly leading them to products fitting their criteria makes their shopping experience faster and more enjoyable.

VI. Customer reviews and ratings

For vendors: Ratings and reviews facilitate an understanding of customer satisfaction among vendors selling digital products online, enabling them to refine their offerings. Moreover, positive reviews bolster their credibility and draw in a larger customer base.

For Consumers: Consumers increasingly value genuine reviews and ratings for product credibility. It enables them to make informed buying decisions based on real experiences.

Monetizing your digital products marketplace

  • Premium vendor memberships or subscription plans: Charge vendors using your platform by offering them exclusive features to create and sell digital products and downloads. For example, Etsy- offers subscription plans for sellers offering premium tools.
  • Sponsored listings or paid ads: Monetize with sponsored listings; let vendors/sellers pay for top placement in search results, driving visibility and sales for digital products and downloads. For example, Coursera— uses sponsored courses to highlight premium content and attract more learners.
  • Data-Driven Insights for Upselling or Cross-Selling Opportunities: Use data analytics to provide vendors with insights on customer behavior. For example, LinkedIn Learning- uses user data to recommend related courses to enhance sales.

4. Marketplace Business Model for Digital Products and Downloads

The digital products and downloads space has taken off, giving creators, developers, and sellers a wide range of options to sell digital downloads like eBooks, software, templates, graphics, and much more. Digital product marketplaces need smart ways to make money that works for both sellers and the people who run the platform. Following are the options you must explore:

I. Commission-based model

If using this model, you get to charge a certain percentage as a commission on every sale a vendor makes using your platform. If you are not selling your digital products but offering a platform for vendors to sell online products and downloads, this model suits you best. Here, your marketplace benefits as more vendors join and attract buyers, while vendors appreciate a low-risk entry without upfront costs.

Pros:

  • Low-barrier to entry.
  • Attracts a broad vendor base.
  • Scales with marketplace growth.
  • Enables platform to earn from every transaction.

Cons:

  • High commission percentages that deter slim profit margins.
  • Resource-intensive vendor payout management.

Example: Creative asset marketplaces, like Adobe Stock or Shutterstock, use this model where contributors earn a percentage from each sale.

II. Subscription model

If built on this model, your marketplace gets a recurring fee from either the vendor or the buyers, to access a certain feature or service like easy digital download access. This can be especially profitable in digital marketplaces where buyers and sellers highly value premium features.

Pros:

  • Marketplace Revenue Predictability
  • Inflated vendor commitment through subscription.
  • Easy access to upgraded tools, analytics, and promotional support.

Cons:

  • Recurring fees discourage new vendors.
  • Resilient support system for long-term subscriber retention.

Example: Etsy Plus offers a subscription plan that provides additional marketing tools and branding options for sellers who want enhanced visibility.

III. Listing fees

Platforms working on this model charge the vendors to publish their digital content or downloads for higher visibility. It incentivizes quality submission because vendors have to pay for their product listings. If want to create a business focused on a a specific niche like digital arts, music, eBooks, or online courses - think along the lines of Amazon Kindle, Creative Market, Shopify, or Podia - and sellers expect to get a good return on what they pay to list, this model would be your best bet.

Pros:

  • Ensures revenue regardless of product sales.
  • Promotes quality over quantity.
  • Vendors pay for high-performing items.

Cons:

  • Risk of payment without guaranteed sales.
  • Potential for high product costs.

Building digital products marketplace on your own

i. Custom coding and integrations are costly.

ii. Building and testing takes significant time.

iii. Requires advanced backend systems for scalability.

iv. Needs experienced developers and designers.

v. Ensuring strong security measures and compliance.

vi. Continuous updates and bug fixes are necessary.

vii. Compatibility issues with payment, shipping, and CRM tools.

viiii. Balancing design with functionality for ease of use.

Building digital products marketplace with Shipturtle

i. Shopify store or any CMS platform

ii. Shipturtle app and its open APIs

That's how simple it is to create a multivendor marketplace or platform with Shipturtle!

Moreover, it is way more cost-effective with pre-built 400+ marketplace workflows and at the same time, flexible to customize based on your unique requirements!

100%

Go live on Shopify in less than 48 hours using our out-of-box multivendor functionalities. Our solution offers 400+ pre-built workflows, including vendor management, product listings, order processing, and payment management. The app is configurable, has no code & boasts 1000+ integrations!

5. Steps to Build a Digital Products and Downloads Marketplace

Building a digital products and downloads marketplace with Shopify and Shipturtle’s plugin is simple. It is a streamlined way to create a multi-vendor platform for selling digital assets like ebooks, music, art, and software. Here’s a step-by-step guide:

Step 1: Set up your Shopify store

First, create a Shopify store and customize it to suit digital products. Shopify makes it easy to add essential pages like Home, Product Listings, and Contact. Since this is a digital marketplace, disable shipping and physical product options to ensure that only digital downloads are available.

Step 2: Install the Shipturtle plugin

Next, install the Shipturtle plugin from Shopify’s app store. Shipturtle enables your store to become a multi-vendor marketplace, where other sellers can list their digital products.

Step 3: Configure the Shipturtle plugin

After activation, configure Shipturtle settings for a digital products marketplace. This includes setting up commission rates, payment gateways, vendor permissions, and access levels. Shipturtle allows you to automate payouts to vendors and provides extensive vendor management options.

Step 4: Create your digital products

Add your digital products by uploading files directly into Shopify, using Shipturtle’s vendor upload feature to streamline the process. Shopify’s digital product options let you set download permissions, limits, and license information, making it easy to offer secure and controlled downloads.

Further, enable C2C functionality to let users buy & sell from single account on your marketplace.

Additionally, you can use Shipturtle's open APIs for custom development on any cart and customize from 400+ multivendor workflows. Read more.

Conclusion

With technology evolving continuously and the internet being part and parcel of everyone’s life, the digital products and downloads marketplace sees a bright future. Be it a writer, developer, graphic designer, or artist, everyone has now a platform to speak their expression and attract a larger consumer base for their digital assets. 

In such times, whether you want to create a website to sell or rent your digital products or create a digital product ecosystem to attract talent and help them meet their potential customers, now is the perfect time to start with a low-barrier entry niche.

If you fear coding is a must-have when drafting your digital products and downloading websites, let Shipturtle break your deception and help you create a no-code marketplace website today.

Take the 14-day free trial of Shipturtle to understand its use case for your business idea.

Get advanced functionalities like C2C, reverse bidding, booking & scheduling options along with advanced shipping, configurable vendor management, payment features, and more. Install Shipturtle today from the Shopify App Store and enjoy a free trial to experience its benefits firsthand.

Want to learn more about how Shipturtle can benefit your business? Book a personalized demo with our sales team.

Experience the power of Shipturtle for free. Start your trial today and discover how it can transform your Shopify multivendor store!

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About The Author

Khyati Buddhadev

Khyati is a versatile content writer. She holds a Masters in Journalism and crafts compelling narratives that drive user engagement. With a keen eye for detail and a strategic approach, Khyati helps Shipturtle communicate messages effectively and connect with the target audience.