I’ve been selling digital products for 7 years now! It’s so much easier than selling physical products. I get to hear all about the many problems with selling physical products from my sister (she has a planner supplies shop) from parcels getting lost, suppliers running out of stock, shipments being delayed, running out of bubble wrap and envelopes, waiting ages in the post office queue, rushing to package parcels for customers that order express and trying to find that one roll of washi tape among thousands of rolls in boxes upon boxes of planner goodies!
These are just some of the reasons why I’m so passionate about selling digital products!
There are so many digital products you could sell including:
- Planner printables
- Party printables
- Printable labels
- Graphics such as patterns and clipart
- Photoshop templates
- Teaching resources
So if you have a digital product in mind and are considering opening an Etsy shop, here are some things you should know:
What you should know before opening an Etsy shop selling digital products
1. Have email scripts… for everything
People from all over the world buy digital products.
I live in Australia but a lot of my customers live in the USA. The great thing about digital products is that you can sell them to anyone, anywhere in the world!
With this though, comes messages from customers at 3am. You’ll find that most messages are about the same things. I use (and highly recommend) keeping a database of message reply scripts.
I use a Word document (you could also use Asana) to keep track of email scripts.
I have email scripts for when a customer:
- Wants a download link reset
- Can’t find the automated email containing the download link (which usually ends up in their spam / junk folder)
- Wants a custom order
- Wants a product for free
- Wants a discount / asks if there will be an upcoming sale
- Hasn’t read store policies
- Wants to know when personalised files will be sent
- Want a refund
- Wants to know how much the item costs in their own currency (yep, some customers don’t seem to realise you can just Google online curency converters)
I have the entire email script (including ‘Hi’ and ‘Regards’) for each of the common questions I’m asked.
Having these email scripts saves a lot of time as I can just copy and paste. I used to use the search function in Etsy conversation but this wasted a lot of time.
People can be a bit rude and don’t care if you’re in another time zone – they assume that all digital products are instant download and they ‘need’ it NOW. To avoid a disgruntled customer, I recommend including:
- Step by step instructions in the ‘notes from seller’ section on the customer’s order receipt
- A brief description of what happens after a customer places an order
- Instructions on how to download in the automated email that is sent to the customer after they place their order (which contains the download link)
People tend to think that digital automatically = instant download. They often don’t realise that an item personalised with their name, for example, will need to be done manually and sent via email so be sure to mention this. I also like to include whether it’s an instant download in the variations section of a listing, as Etsy places these directly above the add to cart button.
It can take a bit of time to set up but once it’s done, it’s done and you can keep using those same email scripts year after year. You don’t want to be wasting all your time replying to emails – given you have to make digital products from scratch your time is precious so spend it wisely!
To bulk edit your listings in a matter of minutes I use and recommend ShopShaper. I shared a tutorial in this post: How to batch edit all of your Etsy shop listings in minutes
2. Use Templates
Much like the email templates I use that I mentioned above, I have templates for everything. The great thing about digital products is that once you’ve made it, you can re-use that to create a new one. So if you wrote an ebook, you could save a copy, delete out the text and write your next one – the margins, contents etc. already set up.
For my products, I create the planner set once, then change up the colors (hence why I’m able to offer 7 different color versions for most of my planners).
Having more tweaks / options / variations of your products is a great way to quickly and easily increase the number of listings in your Etsy shop, which is key to getting found in Etsy search. The more products yoy have, the easier it is for your customers to find you. It also makes your shop look more reputable – like you’re a real shop, not just a ‘hobby’ shop that’s never updated with anything new (i.e so people have no reason to come back).
Tip: I always save a copy of the original file with the word ‘template’ so I can search files on my computer.
3. Don’t offer too many options
Keep it simple – most people buy the same color / style combination that you feature in your photos. So make sure you choose popular color combinations so that people are more likely to click on the photo and visit your listing.
Some sellers don’t offer multiple options and will just sell the product exactly as shown. This certainly makes it easier for both the seller and the buyer (i.e. less confusion and less emails from customers asking about the various options), however it can stop you from making sales.
I recommend offering a few options – whether it be just 4 different colorways or just 2 different sizes – just that little bit of ‘customisation’ make customers feel like they’re getting a product that was made especially for them, rather than just a cookie cutter product they could buy anywhere. People shop on Etsy because they want something special they can’t find from a big box retailer.
By offering just a few options, customers feel like you’re more open to accepting suggestions for tweaks to your products. This feedback is great to refer back to when you want to release a new product or color-way as customers will tell you what they want.
You don’t need dozens of different options. If I had my time over, I probably wouldn’t offer my planners in the 7 colors that I do – I would’ve just picked 1 or 2 colors. Remember that people see what you have in your shop, not all the other options you have that aren’t listed.
The more options and combinations you have, the longer it takes to produce a product – you want products that are quick and easy to replicate. The same goes with personalisation. Adding a customer’s name is a great selling point, but you could just offer to add their initial – it’s quicker to type 1 letter than an entire word or phrase. Little things like that add up over time. Digital products are supposed to be passive income and if you’re having to re-create the entire product basically from scratch every time you get a sale – that’s not passive income. That is also time taken away from creating new products that could be sold again and again.
4. I don’t use Etsy’s instant download system
A lot of people use Etsy’s instant download system but I don’t recommend it for a couple of reasons:
- Customers can download the files as many times as you like (you can’t set a download limit or IP lock i.e they can login to their Etsy account on their friend’s computer and they can download it and share the files etc.
- Etsy has a small file upload size limit (only 20 MB)
- You can only add 5 files per product listing
I use Crafthub to instantly deliver digital files. It’s super cheap at only $8 month. I highly recommend it for a couple of reasons:
- You can offer product bundles (more advice on that later in this post)
- I tend to go a tad overboard adding hundreds of printables to my planner sets (I think of multiple layouts and the planner sets just end up growing!) – this means they’re good value for customers, but it also means that they can be problematic to send. You can upload as many files as you like for your products in Crafthub
- You can upload files once and attach it to multiple products – so you don’t have to upload the same files over and over again.
I’m not affiliated with Crafthub – I just really like the program.
Most email programs (such as Gmail) won’t allow you to send attachments over 25MB. So for sending large files that are personalised (such as binder covers personalised with the customer’s name which isn’t an instant download) I use WeTransfer – it’s free and allows a large amount of files to be sent. It’s quick and easy to use and you don’t need to create an account / login (and remember yet another password).
5. Profit Margin & Expenses
There are still costs involved in selling digital products albeit they are so small you’ll hardly notice them!
My typical monthly expenses include:
- Etsy fees – Etsy charges a measly 20 cents per listing. Listings last 4 months before they expire (so you only pay 5 cents a month – bargain!) They do take 3.5% of the sale price though
- Payment processing fees e.g. PayPal
- I used to buy graphic design resources such as digital paper before I taught myself how to make my own (I teach how in my ecourse)
- Software – I use and highly recommend Photoshop
- Laptop = $1,000 if you don’t already have one
- Printer = $150 if you don’t already have one
- Software = $20 / month ($240 / year)
- Initial Etsy listing fees = free – get 40 free listings by using my referral link?
Total startup costs = approx $1,500
These will vary but here are some indicative costs if you were to open a shop selling printables:
- Printer ink = $20 / month
- Etsy fees = approx $100 / month
- Graphics = $10 / month
- Fonts = free ?
- Color tools = free ?
- Marketing = $50 / month
- Email software (I use and recommend ConvertKit – they’re starter plan is) = $30 / month
- Backblaze (automated file backup) = $5 / month
Total monthly running costs = approx $220 / month
Total annual running costs = approx $2,640
Note: I don’t recommend paying for promoted listings through Etsy. I’ve tried this on numerous occasions and have never had much success with it. I’d rather invest the money into Paid Pinterest Pins or keyword search tools such as Marmalead that pay for themselves many times over and are much better value.
6. Just because it’s digital doesn’t mean you don’t need good photos
If your photos suck, no one is going to click on your photos. And if no one clicks on your photos then you won’t make any sales.
When selling digital products, it’s the same as selling physical products. You need:
- Nice clear photos that show the product from various angles
- Close ups photos of the product’s features
- A photo of the entire product (especially in proportion to something)
- The different color options / styles
- Example of the product in use
For digital products, I recommend using stock photos. A search on Etsy will bring up plenty! Choose one that doesn’t have too many accessories in the image – you want to make sure there is plenty of room to showcase your products!
If you take a photo of the product printed out and in use, just be sure to mention that the product is a digital download (adding this to the photo itself will also save a lot of customer emails asking if the product is printed and shipped to them).
- How to quickly edit & enhance photos for free and without using Photoshop
- How to improve your product photos (Photoshop NOT required)
7. Backup your files
If you sell digital files, you’re going to end up with a lot of files. Make sure you choose a computer with a large hard drive (1TB at a minimum). You’ll also want one with a lot of RAM to keep your computer running quickly (as software such as Photoshop takes up a fair bit of space and uses up a lot of processes when it operates).
I also have a couple of external hard-dries and use cloud storage, in addition to Backblaze (affiliate link) which automatically backs up my computer.
Uploading files to Crafthub for instant download (mentioned earlier in this post) is another way I keep backups of my files.
I recommend saving all of your files in a minimum of 3 places. After all, you’re relying on those files for income – just because you can’t physically touch them doesn’t mean they aren’t an asset that should be protected!
8. Not every product you create will be a best seller
You will have products that fly off the virtual shelves and products that collect virtual dust.
What to do if a listing expires and no one bought it?
Not every product you make will sell, especially in the beginning when you’re building up a customer base and have few sales to provide social proof that your stuff is good.
If a listing expires, all is not lost! Renew it. You’ve gone to all that time and effort to make it so don’t discard it if it doesn’t sell the first time around. Small tweaks (that don’t even have to be of the product itself) make a big difference including:
- Marketing – how much did you actually market the product? At a minimum – Pinterest, Instagram and your email list – see this post for tutorial on how to set up Convertkit and create an image to entice them to sign up
- Take a better photo
- Update related listings with a link back to that listing so customers can find it more easily
- Write a better product description
- As a last resort, drop the price marginally
Note that some products are seasonal. When you renew a listing this counts as a ‘fresh’ listing and moves your listing to the top of the search results where people are more likely to find it. I tend to renew a product 4 times (making small tweaks to the product, photos, sales copy or other elements each time it expires), and if it still hasn’t sold after 4 renewals, then I retire the product. The exception to this is if I see the product gaining a lot of views, as it could be a pathway to people finding my shop or other products. This is another reason why I only recommend retiring products as a last resort. Paying for Etsy listing fees is a very cheap but effective form of marketing!
Digital products tend to be quick to make (much quicker than manufacturing a physical product!) but for this reason, you need to have a carefully curated product plan so you spend your time wisely. These days almost everyone wants instant digital downloads which means you have to make the entire product from scratch before making a sale (as the product needs to be there ready for the customer to download upon purchasing). So ensure you do adequate market research before you plough on ahead on a product that there may not be much of a market for.
9. People will copy you
When I started selling printables not many people were doing it. In fact, I could count on one hand the number of shops selling printables. As Etsy’s popularity has grown, so too has the number of sellers (and customers). So make sure you’re aware that people will inevitably copy you.
People say copying is the sincerest form of flattery – I disagree.
10. It takes Time
It does take a long time to get momentum and products made, but once it’s set up you can keep making money indefinitely. Don’t be discouraged if you aren’t making sales straight away – use that to motivate you to keep going!
Bundle your products for maximum profits
Once you’ve created some products, bundling them is a great way to increase the number of listings in your shop.
Digital products are so easy to monetize. Group together similar products to make much more money. I make more money from bundles than I do from the sale of individual kits. Plus the only extra work involved is creating a new product image of everything that’s included in the bundle, by recycling the images from each product – you don’t have to go to all the effort of making anything new.
Why I sell digital products
If some of the above made you think twice about selling digital products (or on Etsy in general) – it wasn’t meant to! I just wanted to make sure you were aware of the bigger picture and all the behind the scenes things to consider.
I make 90% profit whenever I sell something – that is an unheard of profit margin and the reason I love digital products so much 🙂
More people find my products on Etsy than they do via my online store. So when people ask why I don’t just shut down my Etsy shop and sell my printables on my own website that’s why!
I make more from my digital products than I do from my day job (that I had to spend 4 years studying to get a degree for). I do spend about the same amount of time on my shop (if not more) than my day job each week but it does prove that you can make a lot of money selling digital products. If you want to make some money in your spare time – digital products would be the way to go.
I’ve made 6 figures from selling digital products on Etsy.
Ready to get started making digital products?
Already have an Etsy shop and want more advice?
- How to effectively use and make an Etsy shop banner (step by step video tutorial)
- How to organize receipts for tax time (digital and paper filing systems)
- How to start an Etsy shop selling digital products (and how much it will cost you)
- 13 Lessons learned after 13,000 Etsy Sales
- Must have tools for Etsy sellers, bloggers & creative online business owners
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