Most of us are aware that Etsy is a great platform to sell handcrafted items and make a good passive income while nurturing your hobby. Stats indicate that Etsy has over 7.9 million active sellers in 2023 and an active buyer base of 89.9 million.
However, very few may know that it’s possible to sell digital products on Etsy. These include digital downloads like fonts, apps, plugins, etc., which are used in digital form and don’t require printing. A lot of products like e-books and software, which can be purchased and downloaded by customers online without the need for shipping or delivery, are other awesome examples. All you need is to choose your skills and niche, put in some effort, and start making good extra cash.
If you are wondering how to sell digital products on Etsy, this page is for you. This article offers comprehensive guidelines on what digital products to sell on Etsy, how to set up an Etsy shop, the benefits of user reviews, the best ways to cater to customers, strategies, and tools to evaluate the results and assess the performance of your Etsy shop, and more.
Let’s get started.
What Digital Products Can You Sell On Etsy?
There are a variety of digital products to sell on Etsy. Depending on your skills or niche, you can create digital products from scratch, modify templates, etc.
Various useful options are available on what and how to sell digital products on Etsy. You can use graphic design tools like Canva, Adobe Photoshop, or Affinity. These platforms come with a plethora of easy-to-use templates that let you create amazing graphics for cover pages, labels, stickers, wallpapers, etc., without any technical knowledge.
You can let your creative juices flow and create great assets that buyers will be excited to purchase. These items could be sold on Etsy as digital products that customers can download.
Alternatively, you could create e-books that provide solutions to specific technical problems. Offering these assets as digital downloads could fetch you good money when you sell them as digital products on Etsy.
In case you wish to get highly professional and are particular about finesse, you may hire freelancers from platforms like Fiverr.com and get the graphics, content, digital products (or even an entire Etsy shop from scratch). You could then complete the rest of your digital product by fine-tuning the details and selling it on Etsy.
Some Examples/Ideas Of Digital Products To Sell On Etsy:
Exclusive digital items
Some assets can be consumed only in digital form, and these don’t require printing or such. The items include – apps, plugins, templates, software, custom website themes, etc.
Printable items for special occasions
You can sell digital yet printable versions of wedding cards, birthday greetings, and invitations.
Printables for children
Some other digital items include crosswords, coloring books, handwork guides, etc., which can be downloaded, printed, and used.
Household chores and general purpose
Other printable items include checklists, to-do lists, wall stickers, labels, digital planners, etc.
Hobbies and guides
Embroidery patterns, knitting guides, and electronic assembling workbooks may also be good digital products to sell on Etsy.
How To Set Up An Etsy Shop?
Setting up your shop on Etsy requires you to complete just a few simple steps. Let’s get started.
Create an Etsy account.
To create a seller account, you must have an Etsy consumer account. Navigate to “Sign in / Register” on the Etsy.com website. You will get an email with your credentials. If you already have an account, enter your details and sign in.
You’ll find a menu on the right side of the Etsy screen. Click on “Sell on Etsy”. This would open a page wherein you need to click on the button “Open your Etsy Shop” (on bottom of the page).
Select your shop choices.
Enter details like – shop country, language, shop currency, etc., and click the “Save” button.
Choose a shop name.
Your shop name must not have more than 20 characters. It can contain any numbers, alphabets, or Roman numerals without spaces. Key in the suggested name and check the availability. Alternatively, if you can’t find a suitable shop name, Etsy offers various options. Make sure you decide the name correctly, as you can change the name only once.
Once done, click “Save and Continue”.
Create your shop listings.
Ideally, Etsy recommends you have ten different listings for better visibility.
Product images – Upload clear, sharp images or photos of your product. You can add a max of 10 photos.
Listing – Include info on who the creator is, product description, materials used, whether it is a physical or digital item, and more. Etsy charges a fee of $0.20 per listing.
Product attributes – If your product comes in different colors, sizes, or such, showcase it in every way. Additionally, you can switch on the “personalization” if your product supports it; otherwise, keep it “off.”
Don’t forget to fill in all 13 tags. They are crucial for finding your product through Etsy search. Enter phrases/tags that your product will appear for in Etsy homepage search results. See the image below.
Set up payment information.
You want to start a shop and sell on Etsy to make some extra money. This needs you to have a payment option in place. To begin with, Etsy would ask if you are an individual, a sole proprietorship, or a registered legal entity.
As an individual, include details like your name, address, country, date of birth, phone number, and the last 4 digits of your SSN.
Once you fill in all this info, Etsy will ask the country where your bank is located. At this stage, enter your routing number or savings account number where you want the sales from the Etsy shop to go.
Fill in your credit card info.
Etsy requires you to use your credit card to pay its fees. There are three types of fees:
- Listing fees
- Transaction fees
- Payment Processing fees
Besides the listing fee of $0.20, Etsy charges a 6.5% transaction fee and a payment processing fee of 3% + $0.25 per transaction.
Key in your credit card number, CCV, Expiration date, and full name. Enable Etsy’s auto-billing feature to bill your card automatically on the first of every month. Otherwise, you can do so anytime from the 1st to the 15th of the month.
Get ready to open your shop.
Once you complete filling out the credit card info, the “open your shop” button on the Etsy website will turn black. Click on it, and here you go!
Great, your Etsy shop is open! You can now share your shop details with your friends and family.
You’ll see your shop URL in two formats:
[nameofyourshop].etsy.com
www.etsy.com/shop/[nameOfYourShop]
Create/update your profile.
Now, add a brief bio and a clear photo so that people get to know the creator behind this shop. Most people describe succinctly what led them towards opening the shop and their objectives.
List out your shop’s policies.
This is a crucial step in planning how to sell digital products on Etsy shops, as your buyers may have several questions. To avoid a lengthy back-and-forth chat session, provide the necessary information on your shop’s policies here. This could include mode of payment, queries on other digital products, etc.
How To Promote Your Shop On Etsy?
Now that you have opened your shop, it’s time to market aggressively. Check out the simple yet effective ways to promote your Etsy shop.
Craft a solid marketing strategy.
As a first step, create a rock-solid marketing strategy.
- Know your customers, industry, and product well.
- Understand the pain points, interests, and demographics of the target audience.
- Consider yourself as a buyer and think from that perspective to better understand your customer’s needs.
- Leverage the Etsy SEO option to gain greater organic visibility.
- Plan your social media strategy and posting frequency.
Optimize your Etsy shop and products.
By search engine optimization of your shop’s products, you can enhance your ranking in Google searches and attract more customers. Follow some of the tips below for better ranking:
- Use keywords in your titles and sub-headings for increased visibility
- High-quality images in your content will boost traffic
- Use all the tags to make sure more customers find you in the search
- Use categories appropriately so that they point to the right audience
- Use the special attributes like colors, features, etc., of your products
EverBee tool for tag analysis, product search volume, and competition profitability.
EverBee is an invaluable tool for every seller on the Etsy platform. Its ability to analyze tags, search product volumes, and provide insights into competitors’ profitability allows sellers to better understand the market and optimize their strategies for increased sales and profits. With EverBee, you can identify key trends, competitive advantages, and discover new growth opportunities for your Etsy shop.
I highly recommend it. You can try it here everbee.com.
Advertise your products with Etsy.
In your quest on how to sell digital products on Etsy, use Etsy’s paid promotion options that work like the PPC ads. It ensures that your product ranks on top of the Google search and customers click on the “ad.” Check out some simple strategies to promote your product with Etsy’s ads.
- Use Etsy’s ad software to ensure you maximize your conversions/increase customers’ digital downloads.
- Make sure to advertise your best products first, followed by the moderate ones.
- Keep a watch on the revenue and your expenses. Don’t allow the latter to exceed the former.
- Monitor your results and eliminate the ad listings that aren’t selling.
Use a social media strategy to promote your Etsy shop.
As everyone uses Facebook, Instagram, or Pinterest, it makes sense to understand how to sell digital products on Etsy by promoting them on one of these channels. Check out some key pointers to best promote your Etsy shop on social media.
- Use top-quality images, videos, etc., when you post.
- Repost what your customers post about you.
- Respond to the comments and activities of your followers or customers.
- Post regularly and stay active.
- Share interesting news, updates, or discounts about your product.
- Add a link to your digital business card on your profile
- Use appropriate hashtags to attract the right target audience
Encourage word-of-mouth promotions.
Remember, existing customers can endorse your Etsy products and bring in new prospects. That said, there are some highly effective ways to elicit word-of-mouth advertising about your product from existing customers.
- Come up with a referral program where customers who refer new prospects receive discounts.
- Reply to social media comments and promote your product by acknowledging the customers.
- Conduct small contests that allow customers to write captions on your product and win prizes.
- Always send a thank you message when a customer buys your product and requests a review.
Request And Leverage User Reviews
Product reviews are invariably important to understand what your customers feel about your items. This applies to selling digital products on the Etsy shop as well. With positive customer feedback, your product will gain more credibility and attract more buyers.
In addition, with your product reviews, you can identify the areas needing improvement and can work towards the same. Overall, Etsy reviews play a critical role in helping you build and maintain customer relationships.
However, you must request a review at an appropriate time. Ensure your customers have had ample time to use your product and are able to share their experience. Ideally, wait a week after a customer buys your product before you ask them for a review.
Send a message to the buyer.
One of the best ways is to send a thank you message to the buyer and request them to provide a review. On the review page, offer the link to give the review to make it easier for the buyer. A simple template could be like this:
Hi [Buyer_Name],
Thank you for downloading the [product name] with [Your Etsy store name]. We are happy that you bought our [product name]. Please take some time and provide us with your valuable feedback. Please find the link to share your review. [Provide review page link].
Thank you again, and we look forward to serving you!
Use a follow-up message.
If the buyer has not responded with a review even after a week, it’s okay that you send a polite follow-up message. You can ask if they received the product and enjoyed using it. Also, kindly request them to leave a review. Do thank them for the digital download and that you look forward to catering to them again.
Use Etsy’s follow-up.
Etsy also offers its automated follow-up message, which significantly contributes to how you sell digital products on Etsy. Include a personalized thank you note and request the buyer to leave a review. You can also send a friendly reminder, in case you haven’t.
Regardless of the product you sell on Etsy, gathering reviews from buyers is imperative as that would significantly boost your business.
Focus On Providing Rewarding Customer Service
Customer is king, and you must take this seriously to sell digital products on Etsy shops as well. That said, customer service and the subsequent experience must be impressive for your business to grow. Check out some of the ways you can serve your customers better.
Resolve your customer queries on time.
It’s natural for customers to get annoyed when they don’t receive the product on time. In the case of digital products, there could be issues with downloading, file size, server problems, etc. Check out some of the steps to address your customer’s challenges.
- Acknowledge customer’s pain points and look at the issue from their perspective.
- Be polite and assertive in your communication.
- If you receive any negative reviews, consider them constructive criticism and suggest options to improve your customer experience.
- If they face repeated difficulties downloading your digital product, look for immediate yet permanent fixes.
Forge long-standing relationships.
You certainly don’t want your customer to shop only once. To capture more repeat customers, you must offer some lucrative options. Check out some of the ways to build strong relationships with loyal customers.
- Send special discount codes to repeat customers as a way to acknowledge their loyalty.
- Keep recurring local buyers updated with any new versions of your digital product, updates, etc.
- For digital planners or wedding invitations, you may inform them about new designs, templates, etc.
- Always follow up with the buyer after they make a purchase and ensure they are happy.
To provide discounts on your product, follow the simple steps below:
Go to Etsy.com.
Click on “Shop Manager”.
Click Marketing – Sales and Discounts – Run a sale Or Create a Promo code
Finally, enter all the details about the discount.
Leverage tools to effectively service your customers.
- Saved responses
Use this option, which includes pre-written messages that can be used to respond to general queries from buyers or customers.
Holiday mode
- In case your shop needs some time to process orders or, for some reason, you are unable to cater to customers, set your shop to holiday mode.
How To Evaluate Results And Optimize Your Etsy Shop?
You opened your Etsy shop, got customers, and made some money. Great! But it doesn’t end here. Whether it’s a physical or digital product, you need to monitor and analyze your sales, evaluate results, and make financial decisions.
So, why should you analyze your sales on Etsy? Well, there are various valid reasons. By understanding the trends and patterns of your sales data, you can make better financial decisions. You can use this data to identify the best-selling products in your Etsy shop and create effective marketing strategies to attract the most profitable customers.
Next, you can explore the key sources from where the most lucrative customers come in. All this and more will help you finetune your marketing strategies and create a plan to maximize your sales.
Obtain data relevant to Etsy accounting.
To better analyze your sales data, gather all the details on expenses, revenues, and sales from Etsy’s Shop Manager dashboard. Click on the “Stats” tab on the dashboard, and you’ll see various data, such as the number of orders received, sales made/digital downloads, and revenues collected.
Understand the importance of each data point, and you’ll be in a better position to analyze the data effectively.
Test advertising campaign on Etsy.
Don’t hesitate to launch an advertising campaign. Etsy will gradually test which keywords convert your product into orders the best – you can then incorporate these keywords into your product title and tags. Let the campaign run for at least 1-2 weeks to gather a relevant sample. The minimum daily budget to start advertising is $1.
Explore key metrics.
The Etsy platform has various key metrics, one primary one being the sales volume. This refers to the total number of items sold or digital downloads in a given period.
You also must keep an eye on the revenue metric, which is the total amount of money earned from sales/downloads. Another crucial metric is the conversion rate: the number of visitors who finally purchase and download the digital product. Expenses are the costs you have incurred in running your shop. This is equally important. Lastly, profit margin which is the difference between your revenues earned and expenses incurred.
Study the sales trends and patterns.
Initially, you may start small with just a single digital product to download. Nevertheless, analyzing and interpreting the Etsy shop’s sales trends could be significantly valuable for identifying various aspects later. For example, as your business grows, these patterns will clarify which products are profitable. Besides, you will also get information on which time of the year the sales are higher.
These aspects let you prioritize products (in case you sell multiple digital products) and plan your sales strategy accordingly.
Evaluate marketing efficiency.
Start small, but dream big. You may be spending money and effort on various marketing channels, but to be successful, you must identify which are performing the best. This may seem insignificant today, but you must focus on growing your business profitably.
Study the sales data and understand from which sources most customers are coming. Invest more money in those marketing mediums. For example, email marketing is more lucrative than social media.
Explore and understand the purpose of giving discounts, offers, etc. Are they increasing your revenues?
Look at your pricing strategies.
Price is a crucial determinant of revenue. Understand how your pricing works on Etsy and ensure you use a fair price to maximize your revenues.
- Experiment with different prices and see what gets the best outcomes.
- Alternatively, compare your prices with those of your competitors.
- See if your prices are too high or too low. Adjust accordingly and set appropriate prices to boost your sales.
Be mindful of taxes while selling on Etsy.
You need to particularly understand how taxes work on Etsy. You must be clear on what taxes you need to pay and the IRS regulations.
As a seller of digital products on Etsy, you may be required to pay Federal income tax, state income tax, and self-employment tax. Besides, you must remit sales tax depending on the state connections where you sell. Understanding tax obligations may initially seem daunting. It’s good to consult experts in this field and seek professional guidance.
Wrapping Up:
Developing your passion or hobby and using it effectively to make a passive income is always good. This article is an absolute guide for beginners on how to sell digital products on Etsy. Remember that selling digital products on Etsy can be highly rewarding if you are inclined to continuously learn, update your skills, and stay tuned to the changing market trends. We trust this will help you start your Etsy shop and grow profitably.
Unlock your creative potential and boost your passive income by selling digital assets on Etsy.
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