Open your social media and everyone will be talking about digital products and their nice little side hustles that “paid for this holiday” or “made me get out of debt”. Between influencers and online marketers everyone seems to be advertising the new side hustle and promoting the concept of passive income.
It’s alluring— financial freedom without the traditional 9-to-5 grind. But how realistic is it to turn that dream into a sustainable income? And how competitive is the digital product space, really?
With a quick scroll through social media we have found accounts and posts telling us we could earn a living by working just an hour or two a day, inciting us to create an ebook that would sell online and bring in the same or more money than our day job, telling us that all we had to do was to spend one hour tonight converting a digital product on Canva and our life would change. Plenty of people sitting in swinging chairs by a tropical beach offered to tell us the “one thing” we need to change, start generating passive income if we just commented or messaged them (and then bought their product).
We hate to break it to you, but as my grandmother would say because it’s been true forever: If something sounds too good to be true, it’s because it probably is.
First, let’s debunk some myths, in later articles we will look at the legal side, and finally we will talk about what is possible, no fake advertising involved, so keep an eye out for the next two articles!
The Passive Income Dream: What Are You Really Getting Into?
The idea of passive income is appealing for many reasons. It suggests freedom — the chance to earn money without constantly trading your time for it. We are wary, but are keeping an open mind and analysing the credibility of all this for you. But before you dive headfirst into creating a digital product like an online course or downloadable templates, we’ve asked experts in online and digital business to clear up the myths and set the record straight on what is (or isn’t) possible and realistic.
Adam Mlamali, Creator of SocialProfit, says: “In reality, establishing a passive income stream demands significant upfront work. For instance, creating a digital product like an e-book involves extensive research, writing, editing, and formatting before it can generate income.
“Passive income is not a shortcut to instant riches. Building a reliable income stream takes time and patience. For example, investing in rental properties requires time to acquire, renovate, and find tenants before yielding returns.
“Even after the initial setup, passive income streams often require ongoing maintenance. A real estate investor may need to manage property upkeep and tenant relations, while an online business owner must handle customer inquiries and updates.”
Let’s take a look at each element in detail.
1. “Once you create the product, the money flows in effortlessly.”
One of the biggest misconceptions about passive income is what passive really means. While it’s true that, in theory, you can earn revenue from a digital product without actively working on it every day, the creation and maintenance of a successful product often requires significant upfront effort. From market research to content creation, and then the all-important marketing, building an income stream through a digital product demands time, effort, and ongoing strategy.
Creating the product isn’t enough. What these hooks on social media often fail to talk about is that marketing is where many new entrepreneurs hit a wall. Without consistent promotion (which involves a financial investment), most digital products will gather dust in the vast expanse of the internet. Even the best ideas require strategy and persistence to be seen by your target audience.
According to Jackie Naghten, Business Coach, “A popular phrase used to describe passive income is “making money while you sleep.” While this is possible, setting up a steady income stream requires an initial investment of time, effort, and expertise. The process involves trial and error as you discover what works best for your chosen field. Success is rarely immediate, and setbacks are part of the journey. However, each failure provides valuable lessons that contribute to future success. Passive income is rarely an overnight success. It demands attention, diligence, and upfront effort. Creating a successful income stream often requires substantial work at the beginning. However, once you gain traction in your chosen field, the returns can multiply significantly over time, reducing the need for active involvement.”
2. “Anyone can do it with no experience or skill.”
While anyone can technically create and sell a digital product, doing so successfully requires more than just an idea. To stand out in a crowded marketplace, on top of your niche knowledge you want to use for the product, you need skills ranging from copywriting and marketing to content creation and even basic tech know-how. Dr Michael Harrison, Senior Lecturer in Economics and Finance at the University of East London, says: “Developing the product may require strong design and technical skills, and given you need to develop a perfect user experience, it’s hard to find ways to cut corners here. For some of this having the right tools helps (Canva…), but in some cases it may be easier to seek support from the freelance economy (platforms like Fiverr…).”
It’s not a “set it and forget it” scenario. Building a profitable digital product requires continuous learning, testing, and adapting to trends — especially as digital tools and marketing strategies evolve.
3. “There’s a limitless market for digital products.”
While the market for digital products has exploded, this means there is plenty of competition. In fact, the digital product space is fiercely competitive, with millions of creators vying for attention.
Dr Harrison says: “Digital products are a little harder than physical ones, primarily in two ways. Firstly, there is the need to make sure that the offering is unique and can’t be copied too easily. Second, is getting the marking right, to build a customer base quickly enough, especially if a brand community is an element of the offering.”
Online, you aren’t limited to a certain geographical area… but neither is your competition, which means you are competing with creators worldwide. From eBooks and printables to online courses and membership sites, there are countless options available. Success often depends not just on the quality of your product but also on how well you can market it.
4. “Once the product is live, you can sit back and relax.”
Even once your digital product is created and launched, the work doesn’t stop. Marketing your product effectively requires consistent effort and creativity. It’s about analysing audiences, looking at statistics, adapting, and most of all investing time and possibly money. Many people believe that “passive” means minimal involvement, but in reality, you’re still putting in considerable work, especially in the early stages. Over time, this can lead to more passive income, but it’s a gradual process with no guarantees.
Featured image: mojo_cp, Canva
