When adding a simple product, you can check the downloadable box in the product type panel. This adds two new fields:

1. File path — Path or url to your downloadable file.
2. Download limit – Limit on number of times the customer can download file. Left blank for unlimited downloads.

For maximum flexibility, downloadable products also incur a shipping cost (if, for example, you were offering both a packaged and a downloadable version of a product, this would be ideal). You can also check the Virtual box if the downloadable product is not shippable.