In order to sell digital products online on your shopify website, you can download Shopify’s digital download apps from the App store and then can start uploading your digital files as a product on your shopify website. Once the customer places the order, a download link will be given to the customer for them to download the files after the payment and checkout is done. Also, a link will be emailed to customer for them to download the files at a later date after the order is fulfilled.
You also have the option of automating the complete process, as it depends on the product that you are selling or you want to sell so that customers receive the file instantly after they place the order or manually after you fulfil the order from the backend.
You can also mix your products to have both the physical and digital delivery. To give you an example a product can be configured to have both digital and physical copy of an album. If you want to host your files with shopify, please remember that shopify only provides a 5GB space. You have the option to compress your files into zip archives and make maximum use of the space.
If still you need more space, some of the 3rd party apps gives you the ability to connect with files hosting services like dropbox to give you more space.