Digital Products vs. Services: Choosing the Right Strategy for Your Online Business

It's the great debate with online business: which is better, digital products or services?

The answer, like oh-so-many answers in business, is that it depends.

In general, there is no “right answer” when it comes to either of these monetization strategies. You’ll often come across someone claiming that digital products are the greatest way to make money from home. But then you’ll turn around and find the next person saying that offering services is the best way to build a profitable business.

They’re both right in that digital products and services are great business models, but they’re wrong to claim that one is better than the other.

Because the truth is that one strategy may work better for you than it will me. So, to find the “right answer,” we’ll need to assess what each path entails, and what each path can bring to your life and business. Once you find the one that aligns most with your goals, you’ll have your starting point.

Digital products vs. services for online business owners. How do you choose a monetization strategy for your blog? Learn the pros and cons of two major strategies and see how you can make the choice yourself! #Lazypreneur #BlogTips #MakeMoneyBlogging

Digital Products

Digital products are usually related to delivering information or some form of creative work.

Info-based products are educational tools like ebooks, workbooks, online courses, masterclasses, and similar offers.

Creative digital products are more like pre-made logos, templates, brand boards, mock-ups, stock photos, graphics, fonts, website themes, etc.

Note that this doesn't involve custom creative works, since that’s more like a service.

- Digital Product Pros

Digital products are inexpensive (and sometimes completely free) to make, and there's honestly no limit to how many you can sell.

You don't have the regular constraints of inventory for physical products, or time for services. Once you make your initial investment to create the product, the rest is just selling until you're sick of selling it!

Plus, they're easy to make, easy to deliver, and easy for your customers to access. You could theoretically have an idea, make the product, and make your first sale within the same day…but I wouldn’t recommend trying that since the quality would probably suffer. We’re all about value here!

- Digital Product Cons

Digital products are being sold to the masses, which means they can’t really offer a personalized solution that working 1:1 with a client can. You have to generalize your offer, and ensure you approach the topic/material from every angle so you don't confuse, misdirect, or exclude your consumers.

Digital products are also a widely saturated industry, and it can be tricky to make yours stand out - you'd really want to have an audience of people who are willing to buy from YOU, rather than trying to get your product to stand out in an ocean of strangers. (That’s where strategic funnels come in!)

And, because they're so easy to make and put out there, you have to be very disciplined and careful about creating a quality product. Anyone can throw together a 30-page ebook in Powerpoint, but is that going to help your audience?

Digital products are tempting, but are you actually equipped and prepared to put in the effort to create a digital product that matters?


Services can be just about anything! They can be more of an educational style, like coaching and consulting, or a done-for-you service, like design or virtual assistant work.

“Educational” or “advisory” type services are designed to guide and teach clients to achieve a certain outcome. Sounds broad? It is!

You could be a coach/consultant in any number of fields: business, life, spiritual, productivity, parenting, marriage, health & wellness, fitness, creativity, confidence, public speaking, leadership, content creation, social media, mental illness, chronic illness, or a million other options.

Done-for-you services are more hands-on, and involve you taking the work off someone else's plate.

This can look like VA work, web design, web development, branding, graphic design, copywriting, social media management, photography, advertising, strategy, event planning, search engine optimization, bookkeeping, customer support, launch planning, project management, video editing, and, again, a million other options.

- Service Business Pros

The benefit of offering services is that you have more control over your client's experience than you do with digital products. You're working individually with that person, and you can cater your solutions and ideas to fit their needs.

You also have a more direct trade-off with your efforts. Once you get the ball rolling, you'll be trading time for money. While this counters the passive income dream, it does mean that you can start to turn a profit faster!*

And finally, working 1:1 with people is going to give you way more hands-on knowledge and experience with your niche/area-of-focus. You’ll see the problems first-hand, and hear their struggles with your own ears - both of which are critical to developing targeted solutions (and sales copy!).

*Quick disclaimer for your benefit: A lot of people exaggerate how easy it is to get started with a client-based business. But the reality is, getting those first few clients can be tough. Offering services can lead to quicker profits if A) you’re pricing your services well (otherwise, you’ll be losing money for your time!) and B) you’re doing the work to find the right clients.

- Service Business Cons

The worst thing about working directly with people is…the people. This statement sounds harsh, but I guarantee it’ll be confirmed by almost anyone who has ever worked retail, food service, hospitality, customer support, etc. You want to love the people, and sometimes, helping people directly is the MOST fulfilling job in the world. But other times, you just want to shake ‘em back into reality. Dealing with difficult clients comes with the territory in a service-based business.

Remember the huge fast-profit potential of trading time for money? The downside is also that you’re stuck trading time for money. If you’re not careful, you can easily find yourself stuck in a vicious cycle, unable to take a vacation because it would mean the money stops coming in.

And, since I know I’ve attracted a lot of introverts into the TLS community, offering services is kinda scary. I have an unconfirmed theory that a lot of you won’t sign up for a free Coffee Chat with me because a video call with another human being gives you anxiety. You’ll have to conquer a lot of social anxiety and impostor syndrome symptoms if you’re going to offer services!

(P.S. If I just called you out with those free Coffee Chats, I really encourage you to push past the fear and sign up for one! We always have fun on these chats, and I promise you’ll be less awkward than I am. Plus, once you knock out your first one, it’ll make all future video chats much less terrifying - and I’ve made the GREATEST connections through them, so it’s worth it!)

Benefits of doing both!

Hey, here’s a thought. You don’t have to be restricted to just one path! (Music to a multi-passionate’s ears, no?)

In fact, I don’t even recommend it, long-term. A blend of both digital products and service offers is a great way to diversify your income streams. Plus, they can really work together in a lot of ways.

Before we look at these, don’t freak out on me. “You just told me that one is better than the other for me, blending them together isn’t choosing between them!”

You’re right! And I don’t recommend starting with a blended strategy. Start with one, get your offer going, start making sales, and find your routine. Your job is to start making money, and the best way to do that is to focus first.

But, I also believe in always having long-term vision. So that’s why I’m including this section in this post! So, now that we’ve cleared that up, here are some of the ways a diversified strategy can work for you one day:

- Downselling

For one, maybe someone schedules a Discovery Call (free calls designed to guide an ideal lead on the right path to becoming a client!) with you for your service, but then realized they couldn’t afford your offer. Digital products are usually cheaper than services, so you could still make a sale from the encounter by pointing them to your more affordable solutions!

- Redirecting

Another scenario: Someone’s on a Discovery Call with you and you think they wouldn’t be the best fit for your business. It’s okay, it happens! It’s good to set these kinds of client boundaries so that your business doesn’t become a soul-suck. Instead, you could always redirect them to your digital product resources - maybe they can use them to DIY their own solutions!

(Also, as an FYI for this topic, it’s a good idea to keep a list of referral options as you network within your business communities. Someone that’s not your ideal client may be a perfect option for a friend, so it’s nice to pass them along!)

- Varied Solutions

Aside from pricing or client relationships, it’s also just a great way to offer the most value to your audience. Oftentimes, a digital product can offer a solution that isn’t ideal for a full service. Or the other way around! Having a variety of options is a great way to be an important resource for your tribe.

- Soundboarding

This is my favorite element of this “blended” strategy. Your different offers can inform your other offers!

For example, if you publish an ebook about a topic and it’s a dud, you just saved yourself from setting up an entire client onboarding process for a related service that no one is interested in.

Or, you offer a PDF workbook on another topic that sells like hotcakes! Maybe that’ll show you a high demand for help in a certain area that you can adapt into your service offers.

Then, there’s the other way around. You could end up writing an entire ebook about something and realizing you completely missed your reader’s issues. Or, you could use your services to get direct experience with the issue, working 1:1 with clients and hearing their struggles in their own words. This experience will give you a wealth of knowledge to draw upon for writing an ebook that actually helps people!

Figuring out your strategy

In order to know whether Digital Products or Services will be your best starting strategy, you have to know your business mission, your market's needs, and your ideal lifestyle.

If you are a mother-of-2 and have a full-time job, you probably don’t have the time to trade in a service-based model. In that case, you should find a niche in an area that would thrive off of digital products, so you can create them as you have time and sell them on autopilot.

But, if your dream is to design full-time, pre-made designs are only going to go so far starting out. You may start to generate money faster if you dive into custom work, since you can charge more for that. You can always create pre-made designs for more passive income later on!

See how this can work in different ways? It truly depends on you!

If you’re struggling to figure out what your profit strategy should be, I’d like to remind you about my Free Coffee Chats that are totally perfect for this situation. My finance framework involves a blend of money management and profit strategy, and this is discussion is a perfect fit for the latter!

In 20-30 minutes, we can discuss your passions and goals and figure out which path is right for you. And it won’t cost you a dime! Head on over here to get started! And seriously, don’t let the video chat freak you out. I swear it’s not that bad!

Until next time!

- Katie Scott

Katie ScottPlanning2 Comments