Digital downloads have an edge over mailings. But what products should you create, and how do you set up a successful shop? Find those answers and more.

If you’re a regular on TikTok, you’ve seen so many discussions about the different ways to ditch your nine-to-five. Surprisingly, one of the hottest trends is selling digital downloads on Etsy.

That’s right: You can earn passive income by being an Etsy seller. Best of all, you don’t have to ship physical products. You can just make a digital product, list it, and watch the sales roll in.

Of course, getting started isn’t that simple. Here’s how to sell digital downloads on Etsy — plus seven digital download ideas to get you started. 

Why Sell Digital Downloads on Etsy?

Etsy is a marketplace designed for small businesses and craftspeople to sell handmade goods. But it’s also a thriving marketplace for digital downloads, too. If you love creating content but don’t want to monetize your Instagram or partner with brands, digital products are a must.

Digital downloads are a trending way to make money on Etsy because: 

• They’re passive: You do need to put in the upfront work of creating the downloads, but once they’re in your store, you can make money while you sleep. Etsy handles the rest. 
• They’re intangible: You don’t have to fuss with making crafts, storing them, or shipping them. You can sell the same digital download thousands of times without putting in any additional effort.
• Etsy has an active audience: Etsy has a staggering 81.9 million active buyers. These users are ready to buy, so it’s a great place to sell downloads. 

How to Sell Digital Downloads on Etsy

Whether you want a full-time job as an Etsy seller or you just want a fun side hustle, you can make ends meet by opening an Etsy shop. The challenge is that Etsy had 5.3 million sellers in Q3 of 2022. So, you need to make your shop stand out. Follow this step-by-step guide to make money selling digital downloads on Etsy.

1. Pick a Profitable Niche

For starters, do a little market research to find a profitable niche for your digital downloads. Visit Etsy and type a few ideas into the search bar to see what pops up. What’s selling well? How much do other sellers charge? Is there a gap in this niche you can fill? 

Your digital downloads have to be different than what’s already out there. Identifying a specific market will help you know what to target — and maybe even justify a higher price tag for specialty content.

For example, there are tons of digital planners on Etsy. If you also want to make digital planners, you’ll need to create a niche for yourself. That might mean designing a planner that doubles as a scheduler and a food planner for busy moms. 

2. Set up an Etsy Shop

With your unique idea in hand, it’s time to set up your Etsy store. Visit the Etsy website or app to create a seller account. 

Before you fill out the profile fields, you’ll need to create a memorable, descriptive, unique shop name. Upload a custom logo and inject a little personality into your shop description to attract more shoppers and seem more credible.

3. Create Popular Digital Products

If you want to master how to sell digital downloads on Etsy, you’ll need to create in-demand downloads that people crave. Do you want to sell digital files, like Cricut SVGs, that people can use on their own machines? Or do you want to make printable products, like coloring pages, that people print at home? 

You’ll need a different skill set depending on the products you want to make. For example, if you want to make wedding invitations, you can create them with a Canva Pro subscription. For more advanced products, like Instagram presets or website templates, you might need Adobe Illustrator, Photoshop, or Lightroom.

Once you’ve created your products, you’ll need to list them individually in your Etsy store. But beware: Etsy fees are $0.20 per listing. That adds up, so create product listings for your top-selling products first to generate sales. 

4. Strategically Price and Discount Your Products

Next, you’ll need to decide on a price for your digital downloads. At a minimum, you need to recoup your costs. Etsy charges you $0.20 per listing, as well as a 6.5% transaction fee and a payment processing fee of 3% + $0.25 per transaction.

If you aren’t sure what you should charge, check the price ranges of similar products on Etsy. This doesn’t have to be a race to the bottom, but you do need fair prices to attract buyers.

You can also attract buyers by offering discounts. The Etsy platform allows sellers to put certain items on sale — you can even generate discount codes for past customers, social media subscribers, and your friends.

5. Collect Good Reviews

Reviews are the best way to master how to sell digital downloads on Etsy. Ninety-three percent of online shoppers say reviews influence their buying decisions, and that’s also true on platforms like Etsy. 

As a new shop, you’ll need to encourage people to leave reviews. That isn’t easy, but you can encourage reviews by: 

• Giving friends and family a discount code to buy the download and leave a review
• Answering all shopper DMs ASAP
• Replying to all reviews, both good and bad
• Asking customers to submit a review after they download the product
• Offering free downloads to shoppers who leave a review

6. Follow Etsy SEO Best Practices

Etsy is a platform that functions like a search engine, so if you want to make money selling digital downloads on Etsy, you need to invest in search engine optimization (SEO).

Fill your shop and product pages with descriptive keywords that people are searching for. You should also add keywords to your product photos before uploading them to Etsy. Image meta-data counts for SEO, so don’t forget to rename all photo files. 

If you aren’t sure where to find keywords, you can look at your competitors to see what phrases they’re using. If you have a budget, paid keyword tools like Sale Samurai can do Etsy keyword research for you.

7. Try Etsy Marketing Strategies

Once you set up your shop, you’ll need to attract shoppers. Try promoting yourself with: 

• An email list: Offer free versions of your digital downloads to people who subscribe to a monthly newsletter. You can incentivize signups by giving subscribers freebies every month, as well as exclusive discount codes and sales. 
• Social media content: Create a Facebook page, Instagram account, and TikTok to promote your digital downloads. 
• Influencer partnerships: Why not give your digital downloads to high-profile influencers in your niche? Some will happily give you a shoutout in exchange for free downloads.

Many beginners run Etsy Ads to boost their sales, but they’re pretty expensive. If you’re just starting, it’s better to get organic traction first.

The Best Digital Products to Sell on Etsy

Learning how to sell digital downloads on Etsy isn’t hard, but you’ll need to create the right types of digital products to make more sales. Try these seven digital product ideas to jumpstart your successful Etsy shop.

1. Printable Planners

If there’s one thing Etsy buyers love, it’s planners. Create printable 12-month planners. If you don’t want to fuss with formatting it for printing, you can also create editable digital planners. Just make sure they’re mobile-friendly so your customers can use them on any device. 

2. Fonts

There are tons of free fonts out there, but some crafters want a custom look and feel. If you have graphic design chops, you can create unique fonts and sell them in your Etsy shop.

3. Wall Art

If you’re an artist, learning how to sell digital downloads on Etsy can help you monetize your talent. Etsy buyers love watercolor art, but inspirational quotes are always popular, too. Some artists opt for digital art, like computer wallpapers, so they don’t have to worry about optimizing digital prints.

4. Trackers, Worksheets, and Checklists

Create budgeting templates, meal planning worksheets, or weekly cleaning checklists. You can fill in the content or create editable documents so shoppers can customize the content.

5. Coloring Pages

Parents are always on the lookout for cute, creative coloring pages to entertain their kids. Create unique coloring pages that shoppers can print again and again. Better yet, create coloring pages for different age levels so you appeal to shoppers with toddlers or teens.

6. Crafter Guides

DIY aficionados flock to Etsy for guidance on their latest projects. If you love to craft, you can sell scrapbooking downloads, crochet tutorials, or sewing patterns for your shop.

7. Social Media Templates

Businesses spend a lot of time on social media, and they’re always on the hunt for professional-looking shortcuts. If you have a little graphic design experience, you can create social media templates for Etsy. You can design Instagram post templates in Canva or create Lightroom presets for folks who want custom Instagram filters. 

Make Money Selling Digital Items on Etsy

You can make passive income from Etsy once your shop is up and running. It’s more work initially, but you can master how to sell digital downloads on Etsy with a little elbow grease. 

Follow these tips to start selling digital downloads on Etsy as a beginner: 

• Pick a niche
• Set up an Etsy store
• Create digital downloads
• Price and discount carefully
• Collect reviews
• Invest in Etsy search engine optimization
• Market your store

But for many creators, Etsy is just the beginning. If you want to take content creation to the next level, subscribe to the Hype blog. We give creators the latest tricks for content monetization, brand sponsorships, and much more. Check out the Hype blog now.