How-to Create Downloadable Products in Magento
1. Login in to Magento Admin Panel using the administrator details.
2. Navigate to Catalog -> Manage Products

3. On the Right upper Corner You will find a link ADD Product as shown in figure.

4. Select the Product type as downloadable and attribute set as default as shown in figure and click continue.

5. You will land on the product page. On the left hand side you will be able to see a menu bar which used to create the products.

Now enter the product name, description and short description and product SKU. This SKU should be different to each and every product.
6. Select the Status as Enabled. If you select it as disabled then you won’t able to see the product in the front-end.
7. Rest of the fields can left left with default values.
8. Now click the Price Tab on left hand side
9. Enter the price of the product. If you are configuring any tax classes then select the tax class else select None in the drop down
10. Go to the image tab. There you will browse files and upload files.
11. First click browse files, then upload the image of the product then click upload. You should be able to see the image in the box. Check the radio buttons corresponding to this image. Then only you will be able to see the images in the front end.

12. Now go to inventory tab and enter the quantity of the products — go to the last option which is Stock Availability set it to appropriate level.
13. Next, go to the Category and assign the product to the particular category.
14. Click Downloadable Information tab.
15. Here, set Links can be purchased separately to NO

16. Click Add New Row
17. Enter the Title of Product same as Product name
18. If you want to give a sample of the product then you can enter the details here

19. Now go to File
20. Click files then up load your product and click upload files.
21. Now save the product and see the product in the front-end