Start Selling Digital Products On Etsy In 10 Steps

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Are you interested in selling digital products on Etsy? Unsure which product to make and how to start? Here are the exact 10 steps I would take if I was in your place.

Digital products seem to be the best solution today for small businesses like mine and individuals not wanting to face missing parcels of buying physical things online. I also find it amazing that we now get to own less physical items, it keeps my room cleaner but maybe this isn’t true for my computer’s storage. Anyhow, digital products are the way forward! Our lives are just so much easier and simple with it.

In this article, I’ll be sharing my guideline on how you can start selling digital products on Etsy and the types of digital products you can make – prepare to get surprised!

*This post may contain affiliate links. This means I may earn a small commission (at no cost to you) if you sign up for a program or make a purchase using my link!

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How Much Money Can I Make Selling Digital Products On Etsy?

Sellers are able to make anywhere from $5 to $100 per day selling digital products on Etsy. Professional businesses make even more depending on the number of products they offer in their shop and if paid advertisement is used. Other factors include the type of digital product sold and selling price.

Are Digital Downloads Profitable On Etsy?

Selling digital downloads on Etsy is usually profitable depending on the product and price. Most are low cost to create, do not involve handling or shipping and are sold repeatedly with no expiry. Customers prefer digital downloads as most items are ready to be used upon purchase.

How To Start Selling Digital Products On Etsy

1. Sign up for a free Etsy account

The first thing you need to do to start selling is create an Etsy account. It’s okay if it’s your first time and you’ve never made a purchase on Etsy yourself. Maybe you’ve always meant to be a seller! So go on Etsy and sign up, it’ll take less than a few minutes.

Special for my readers, get 40 free listings when you sign up with my link! You won’t have to pay any listing fees for your new baby business. I don’t want you to pay fees before making sales.

2. Set up an Etsy shop with one listing

To be able to become a seller on Etsy, you’ll need to set up a shop immediately after creating an account. Etsy will ask you to list one product as a requirement before you can access your shop. If you already have a ready digital product to sell, go on and list it – you can find my step-by-step guide here.

If you don’t have a ready product just yet, list something anyway! You can edit or delete this mock listing later. I don’t foresee it making a sale so soon so don’t worry.

3. Define your shop’s niche and focus

Once you have your Etsy shop created, it’s bare and empty. Now is a good time for you to think of what kind of digital product you want to sell. The tip is to focus on one or two types of digital product to make in the beginning and improve as you grow. Ideally, your shop should be cohesive and complete to your preferred audience – it should not sell everything there is under the sky.

Other things to get you thinking:

What is your preferred target audience – a household or a business owner?
Something you are good at that can help others?
What are you interested in and can you grow that passion?

Analyze digital products you can make that complements each other so you can sell them together
My list of digital products you can make down below

Selling Digital Products On Etsy: Define business niche

4. Perform keyword research to analyze demand

This is optional and completely depends on your strategy plus the kind of skills you have. If you already have the skills to make a certain type of digital product e.g. amazing excel skills to make a budget excel sheet, I would suggest you focus on making that first. This goes the same if you’re a great graphic designer who loves to make vintage wall art or digital wallpapers, follow your passion.

However, if you’re still clueless and unsure of what to make and would like some validation, doing Etsy keyword research may help you. It would also help you analyze less competitive niches where you run a better chance of making sales. Hopefully!

Some sites you can use for Etsy keyword research:

Marmalead

Etsy Hunt
Keywords Everywhere

Among the sites I’ve listed above, Marmalead is possibly the best Etsy keyword tool to use. Although it is not free unlike some others, it is a whole site dedicated to only researching Etsy keywords. It allows you to analyze competition, market price points and reports on a keyword’s performance for the previous 12 months. An all rounder tool for you to stay competitive ahead of others!

5. Create the digital product you want to sell

The toughest part is probably taking your first step, others will just come naturally. Creating a digital product doesn’t have to be hard or complicated. You don’t have to use the best fonts, templates or premium elements to make a successful digital product.

Selling Digital Products On Etsy: Canva templates

In a sea of so many options to choose from, you just have to provide the best value for every dollar a customer spends. So take a look around, evaluate your competitors’ products, underpromise and overdeliver. Think about what you would want from a digital product if you were the customer then give what your customers want!

Check out my list of 14 online tools (both free and paid) you can use to make Etsy digital products. Types of tools to use vary with the kind of digital product you want to make.

6. Put up the digital product listing on Etsy

Listing your digital product on Etsy is super simple and I believe it’s so much easier compared to listing a physical product. You don’t have to worry about the shipping part. It should take less than 8 minutes to complete one listing if you have everything thought out. Then you’re ready for sales!

For greater detail on how to list your Etsy digital product, read my step-by-step guide here – especially useful if you’re selling Canva templates!

7. Setup discount codes and vouchers

When you’re logged into your Etsy account, head to your seller dashboard and click on the “Marketing” tab on the left to view “Sales And Discounts”. Discount vouchers can be set up for all products or certain products only.

As a start, I recommend setting up these for your shop’s marketing:

New buyer vouchers – a voucher code you can share to customers via message to promote 1-3 specific product
Thank you vouchers – customers get an automatic voucher code for their next purchase after buying something

Reminder offers for abandoned carts – customers get a special offer to remind them to checkout
Reminder offers for items favorited – customers get a special offer for items they favorited

Aside from setting up discount vouchers, I suggest running a sale for your best selling products or all the products you offer – depending on your shop’s strategy. Doing so, will place an automatic price cut down when customers view your products in search results or when they visit your store. They won’t have to key in any discount vouchers to get the sale discount. Most shops do this by putting a higher initial price then giving it a 30-40% discount to make their listings appealing compared to their competitors.

8. Share products to Pinterest to bring in more traffic

One of the ways to bring in traffic to your Etsy shop is by promoting your digital products on social media. Pinterest may be overlooked when it comes to individual usage but businesses and brands love the platform too much – so you should too!

Why use Pinterest to promote your Etsy digital products?

Simple straightforward posting takes minutes

It is a search engine of its own
Clicking on a pin directly brings us to an external webpage
Longer shelf life once posted compared to other platforms

Option for a business account with analytics
Optional Pinterest ads for greater exposure
High chance for organic traffic from Google

A platform for both women and men

I don’t recommend promoting your digital products on other platforms as it is time-consuming to do so. Sites like Instagram and Facebook are built to discourage users from exiting the platform and makes it less convenient to do so. Be mindful where you spend your time!

Selling Digital Products On Etsy: Promoting on Pinterest

9. Invest in Etsy ads for long term success

Etsy ads are something you should consider when you’re getting some traction and sales, not in the beginning when you have none. The idea is to identify your best selling item and use paid advertising to get even more sales – because it’s a proven product. Don’t pay for ads to promote every product you have so relax if you’re new.

Reasons why you should use Etsy ads:

Increase visits to your shop to view special collections
Get more eyes on a product you know people love

Drive more sales during peak seasons
Promote new products (least advisable as a newbie)

Once you do explore Etsy ads, think of a daily budget you’re willing to spend and stick at it for at least 30 days. More data collected, better ads experience and better chances of sales. Promoting your products with Etsy ads gets it to the top of search results before anyone else’s listing, giving you a super high chance to make a sale.

10. Make sales and reinvest your profits to expand

As a business owner, you would want to see your shop grow and expand over time. A lot of small business owners and solopreneurs overlook the importance of reinvesting their profits back into growing the business.

Some things you should look into as your digital product business grows:

Making more digital products of the same type

Offering complementary products to the ones you already have
Outsourcing to others to make your digital products
Building an email list for true lovers of your brand

Creating a standalone branded ecommerce shop on sites like Shopify or Squarespace for digital products
Promoting your products on other social media platforms like TikTok, Twitter and LinkedIn (depends on target audience)
Setting up another Etsy shop for a different digital product niche

Selling Digital Products On Etsy: Scaling your business with social media

35 Digital Products You Can Sell Online

Running out of ideas on digital products? Here are 35 items you can make to start selling digital products on Etsy:

Who knew once can sell digital pregnancy announcements on Etsy and make a ton of sales at it?

Not me, never in my wildest imagination!

Bottom Line

Remember, the journey of 1000 steps starts with a single leap of faith. Believe me when I say great things happen to those who put in the work.

If you’re unsure on how to start selling digital products on Etsy, here are 10 practical steps you should take today:

Sign up for a free Etsy account
Set up an Etsy shop with one listing

Define your shop’s niche and focus
Perform keyword research to analyze demand
Create the digital product you want to sell

Put up the digital product listing on Etsy
Setup discount codes and vouchers
Share products to Pinterest to bring in more traffic

Invest in Etsy ads for long term success
Make sales and reinvest your profits to expand

Looking for another kind of product to sell on Etsy that lets you sit at home all day and not handle physical orders? Print on demand is the side hustle you should explore no matter what you do for your day job.

Check out my print on demand guides down below – you can sell all of these on Etsy! Great tips included for beginners.