How To Sell Digital Downloads on Etsy

By Chris Shaffer •  Updated: 05/07/23 •  21 min read

One of the most common questions we get from new Etsy sellers is how they can sell digital downloads on Etsy.

In this article, I'm going to walk you through the ends and outs of how and when you can sell digital downloads on Etsy as well as give you a few pointers to help you improve sales along the way.

Can You Sell Digital Downloads on Etsy?

Yes, in addition to being able to sell print-on-demand products, vintage goods, and handmade items, you can sell digital products on Etsy as well.

If you spend a few minutes sticking around the Etsy marketplace, you'll see a wide variety of examples in virtually every niche.

Some of the most common types of digital products available on Etsy include templates, printables, guides or workbooks, and other digital files, such as stock images or photo backgrounds.

Are there Limits to Selling Digital Downloads On Etsy?

Assuming of course that the things you want to sell as digital downloads on Etsy otherwise comply with their terms of service, there are only 2 minor limits that you need to be aware of.

First Etsy limits each digital product on their site to contain a maximum of five individual files, which each have a 20 MB (megabyte) maximum size.

If you need to deliver more than five items or your digital file is larger than 20 MB, you can send a link to an external service such as Dropbox.

One handy trick for this is to create a PDF, using something like Canva or your other favorite design software, and include the link to your large file or files, as well as instructions for how to download and use them.

You can then use Etsy's automated digital download delivery system and have them send the PDF with the link instructions to your customers when they purchase from your shop.

Secondly, your digital file must be formatted in one of the following formats:

As long as you can play with these two basic requirements, you can sell digital products on Etsy to your heart's content.

Why Sell Digital Downloads On Etsy?

Now that you know you can sell digital products on Etsy and have a better understanding of some of the limits of what you can and can't sell, let's take a look at some of the pros and cons of selling digital downloads on Etsy.

Pros of Selling Digital Downloads on Etsy

From where we sit, there are three big advantages to selling digital downloads on a marketplace like Etsy.

First, digital products are some of the easiest to create.

With just a few basic skills in something like Google Sheets, Canva, or some video editing software, you can create a wide variety of digital products for virtually any niche.

With just a few clicks of your mouse, you can create a product once and sell it over and over again.

Second, because there's no one manufacturing the product or shipping it to customers (delivery of digital products is handled automatically by Etsy), You don't have to worry about any quality or fulfillment issues.

If you're just getting started on Etsy, getting rid of the extra burden of some of these customer service tasks can go a long way to freeing up your time to watch more products.

Finally, because there's no physical product being shipped, the only cost involved in selling and distributing digital products are the Etsy fees themselves.

This means profit margins on digital products are typically substantially higher than any other type of product you can sell on the platform.

Cons of Selling Digital Downloads on Etsy

They say there's no such thing as a free lunch, and that applies to selling digital downloads on Etsy as well.

There are two downsides you'll want to consider when it comes to selling digital products.

First, because digital products are so easy to create, there is typically more competition around digital products than other types of products sold on the platform.

Second, digital products typically have lower prices than physical products and although you typically have a higher profit margin, telling a digital product can often lead to lower overall revenue.

It is important to note, however, that both of these downsides can be eliminated by using a niche-based approach, rather than building a store that only sells digital products.

We advocate for this approach for a variety of 

reasons, but using a niche-based approach allows you to compete in some of the most competitive spaces and launch a wider variety of product types to balance out any negatives.

Which Digital Products Sell The Best On Etsy

Pretty much any digital product that's allowed to be sold on Etsy has a good chance of selling.

That being said, there are three main categories that we've seen selling successfully in virtually every niche.

The first category that sells very well is what's referred to as “printables”.

As the name implies, these digital products are designed to be printed by the end user.

A few examples of principles that sell well in many different niches would include greeting cards and worksheets or templates designed to be printed off and filled out by the end user.

The type of digital product that tends to sell well on Etsy is templates or blueprints for designing real-world items.

As opposed to a printable which is designed to be printed out and used as is, templates or blueprints for real-world items would give you the step-by-step instructions and materials list to create a project on your own.

For example, you may find templates for furniture, construction, and even a chicken picnic table selling well on Etsy.

The third and final category is what we refer to as purely digital products, which are designed to be downloaded and used by the end user. User.

This category would include things like templates to be used inside the design software, Canva, photography, backgrounds, or templates for social media posts

If you're interested in learning more about exactly what kind of products can sell well on Etsy, you may want to check out these 12 ideas which make $3,000 or more in sales each month.

How Much Can You Make Selling Digital Downloads on Etsy

One question we get all the time is just how much can you make selling digital downloads on Etsy.

As alluded to above, there are a wide variety of products on Etsy that can sell thousands of dollars a month per product.

That being said, let's talk about setting some realistic goals and thinking through what you can expect as an experience.

I will flat out say that it is not a realistic expectation to launch one or two products on Etsy and expect to make $3,000, 5000, or $10,000 a month on the website (Although admittedly this does happen).

Generally speaking, a realistic goal for your first 90 days is somewhere in the neighborhood of 500 to $1,000 per month.

From here, you should be able to start to scale your store and add in a variety of other digital products and hopefully, a few physical or print-on-demand products as well, to fill out the store for your niche.

In the 6 to 12-month time frame, it's not uncommon to see well-built stores earning $5 to $10,000 a month or more from their efforts.

How To Create Digital Downloads To Sell On Etsy

Now that you have a better understanding of what you can and cannot sell as a digital product on Etsy, you may be wondering how people design the digital products that are sold in their stores.

There are three main ways that most digital products are created.

Design Your Own Using Canva or Photoshop 

The first way to design a digital product to launch inside of your Etsy shop is by using a design program such as Photoshop or Canva.

Even if you're not an experienced designer, a design program like Canva allows you to very quickly and easily create amazing-looking templates or other document types that you can then save as a PDF.

Additionally, they have a huge library of stock design elements and (especially in the case of Canva) have only a small learning curve to take someone with zero design skills and turn them into a professional digital product designer.

Hire Someone to Create Designs For You

If you, like me, have zero graphic design capability whatsoever or you just don't have the time to create the digital products that you want, the second common option is to hire a designer to help you.

There are a huge variety of places where you can go to find highly skilled graphic designers to help you create the perfect digital product that you have in your head.

One of the most common places to get design help is

Although the site started with every job only costing $5, which limited the number and types of things that designers could do and still make a living, has since become One of the go-to sources for freelance graphic designers looking for work.

For just a few dollars, you can have anything created from an individual element for your project to the entire digital product you wish to sell.

Use A.I. Programs to Help You Create Designs

I would be remiss if I left out the third option for creating digital products since it's massively growing in popularity, even as I'm writing this article.

AI or artificial intelligence.

Programs like Midjourney and the upcoming Firefly from Adobe, allow you to create sophisticated graphic designs by doing nothing more than typing in a text prompt.

Although these designs would not be ideal if you're creating a complex digital product such as a planner or template, You can still use these services to create missing elements that you can't find otherwise.

For example, if you can't find the perfect cartoon chicken for your digital product, you can easily whip one up in a few minutes inside of Midjourney and all you have to do is tell it what you're looking for and then be amazed by the results.

If you're interested in using AI for creating digital products or you just want to learn more about the process and the ins and outs, you may want to check out the video below or the AI design workshop here.

How To Sell Digital Downloads On Etsy

Once you have a few ideas for the types of digital downloads you want to sell and you know how you're going to grant them, you need to start thinking about the process for how to sell digital products on the Etsy platform.

Choose a Niche

Contrary to some ety advice you may see, it's not a great idea to launch a bunch of random and unrelated digital products inside of the same as you shop.

Having a digital template for a chicken picnic table and selling photo backgrounds in the same store is likely to lead to customer confusion and lower conversion rates on your products (which will hurt you with Etsy long term).

The smart, and long-term approach, is to start with a niche in mind.

If you're unaware of what I mean, when I say the word niche, it simply means something that someone identifies as or says that they like to do.

For example, someone may say I am a fisherman or I like to fish, in that case, that person would be someone inside of the fishing niche.

Using this type of approach not only helps us to narrow down the types of products that we are going to create, but it has the side benefit of increasing sales, conversion rates, and customer loyalty.

Additionally, it makes the product creation process substantially easier because we can focus on the types of products that a single person would want, rather than trying to figure out all of the million different things that anyone in the world could buy.

If You don't have any idea what your niche is or should be, one easy way to get started is with what we call the touch list method.

Grab a pen and paper, and for the next 24 to 72 hours, right down everything that you touch and interact with, and then think about who that product serves.

For example, if you wake up tomorrow morning and make yourself your morning cup of coffee, you've just touched a few different products that would serve coffee lovers or coffee enthusiasts.

When you're making dinner, you're going to touch at least a handful of things that could serve the home chef niche or perhaps the home organization niche (and you never thought that Tupperware would help you do anything more than store food)!

Domingo should just be to write down everything that you interact with, you can always take the time to think about who those products serve later.

Create Your Shop and Listings

Unlike many things in the online world, Creating your Etsy Shop and listing is a fairly straightforward thing.

You can start by heading over to Etsy com/sell and choosing the get started option.

If you're already logged into an existing Etsy buyer account, it will take you directly into the shop creation screen, if not, let's see will ask you to create an account.

Once you've logged into your account, Etsy won't ask you to start creating your shop by setting your shop preferences.

Here you're going to select three options:

Once You've selected the most appropriate options for your shop, hit save and continue.

The next section of the Etsy setup process requires that you name your store.

Typically, you want your name to include a keyword or two from your niche (If you're struggling with naming ideas, you may want to check this article out here).

The only real requirement for your shop name is that it's between 4 and 20 characters and contains no special characters, spaces, or letters with accents.

Once you've chosen the name for you at the shop, Etsy will prompt you to create your first listing.

Make sure to fill in all of the listing details, including as many of the image slots as possible.

Although it's tempting to skip the optional fields such as tags, or materials, fill out the listing completely and as accurately as possible. Not only helps you rank better in Etsy search but also gives buyers a better idea of exactly what to expect from the product.

At the bottom of the screen, you'll be asked to select a return policy which can be provided either with the basic Etsy return policy or you can create your own by selecting the create policy button.

Since digital products can be downloaded and used and can't be returned, most sellers opt to not accept returns or exchanges on digital products, but that's ultimately up to you.

Once you filled out your listing, hit the saving continue button and you will be prompted to enter your payment and billing information.

Lastly, Etsy will walk you through setting up some security for your shop.

it's not uncommon for new shops to be suspended automatically by Etsy while they verify your billing information. If you receive a notice from Etsy that your shop has been suspended after you've set it up, fear not, it's typically resolved within a few days after your information can be verified.

Promote Your Listings

Once you have your shop and listings created, it's time to focus on driving a bit of traffic over to your listings.

Although many ” Etsy gurus” will tell you to post your listings all over your personal Facebook page and send them to everyone you've ever met in the hopes of getting a sale or two from these people, this strategy is disastrous in the long term.

Not only does this burn all of the Goodwill you've built over the years with your friends and family, but if a few of them do buy just to “support you” It actually can harm you in the Etsy search algorithm.

Instead, focus on creating a well-optimized listing and then turn on eddy paper. Click ads at a very low daily budget ($3-5$ per day) to start to get your initial traffic and sales.

Even if you're not profitable at first, this will help Etsy's organic algorithm understand the correct kind of people that should be coming to your listing to purchase the product.

Over time, this balance of paid and organic search will result in you having higher organic search placement and more and more profitable daily sales.

In addition to turning on Etsy's pay-per-click ads, you might want to look at the sales or promotions feature inside of Etsy.

Etsy allows sellers to create a discount for a limited time on their products.

Not only does this alert any previous customers, people who have favorited or added your products to their cart in the past, but It has a nice side benefit of increasing conversion rate and short-term organic search traffic (since Etsy displays a countdown timer for the sale ending).

With these two strategies employed, you shouldn't start to see your small trickle of traffic and sales into a steady stream. 

How To Increase The Sales Of Your Digital Downloads on Etsy

One of the most frustrating things for any Etsy seller is trying to figure out why their products are not selling more quickly.

Let's take a quick look at the steps you should go through if you're trying to increase the sales of your digital products on Etsy.

Understand The “Market Cap” In Your Niche

Before you can figure out why your product isn't selling more frequently, you need to understand what the” market cap” is for the product you're trying to sell.

After all, if you're selling a few units a day and that's all of the sales in the market, there's no way to sell more products, right? 

Our favorite way to do this is to use a sales estimation tool, like EverBee.

Start by typing in the main keyword. For your product into the Etsy search bar and then run the product analytics tool from EverBee on the search results.

This will give you a fairly close sales estimation for the market as a whole.

At the top of the product analytic results, you'll see the average monthly sales for all of the different products in the market.

If you sort those results by monthly sales, you'll be able to see the total number of monthly sales for each of the competitive products in your market.

In the case of the example above, we can see that there are a wide variety of products selling well over 100 units per month.

This means, if we're selling fewer than three or four units a day, there's plenty of room for us to grow.

On the other hand, if when you run the product analytics tool, you see that you already have the majority of sales, obviously there's not as much room for you to improve.

Find The Factor Limiting Your Sales

Now that you have a better idea of what the overall market size looks like for your product, it's time to dive in and address the problem your listing has.

Not Enough Sales In Your Niche To Sell More

The first and most obvious problem you're listing may have is that when you run your product analytics, you realize there's not much room for you to grow your sales in the market.

If this is the case, you can still spend a little bit of time looking at some of your top competitors to see if they are ranking for any keywords that you aren't.

However, the most likely outcome is that if you want to increase your digital product sales and you're already close to the market cap, you'll need to start coming up with more products.

You Have a Low Conversion Rate

One of the most common reasons for products not selling as well as they could is that you have a low conversion rate.

Using a tool like EverBee, You can get access to a variety of very interesting metrics, like the conversion rates of your competitors.

If you scroll to the right-hand side of the product analytics tool, you will be able to see the estimated conversion rate for each competitive listing.

If you are converting at a lower rate than your competitors, you have a conversion rate issue and should be addressing that before you do anything else.

Typically, there are two main things you can address on your listing in order to improve your conversion rate.

The first is by improving or filling out your images.

Take some time to study the top converting and top selling listings to see what they are doing with their images and see how it's different from what you were doing.

Once you've had a little bit of time to spot the difference in the images, set aside an hour or two to come up with better images for your listing.

The second main culprit that drags down the conversion rate is having a poor or under-optimized description.

Take the time to look at the descriptions of the top converting listings and see how they are different from yours.

One of the most common mistakes that Etsy sellers make is that they include a bunch of information, like in the example above, that is hyper-technical and has nothing to do with a question a customer might have about the product.

Remember, when people are buying something online, they can't pick it up, flip it over, or interact with it in any way and this makes having accurate and detailed photos as well as a complete description critically important for the purchase decision.

You Don’t Have Enough Traffic

After you've looked at the conversion rates, if your listing is among the higher converting listings in your search results, take a look at traffic.

If there's room left for you to grow and you've already maximized your conversion rate, the only other lever that we can pull is bringing more people to the listing.

If you aren't already running Etsy pay-per-click ads, now would be the time to turn them on.

Additionally, you'll want to double-check that you're using all of the same keywords as your competitors who are gaining more traffic than you are.

This two-pronged approach will help make sure you're capturing as much of the remaining traffic as possible.

One last thing you may want to address if you've discovered that traffic is your issue Is your main thumbnail image for the listing.

This image can be the make-or-break difference between someone clicking on your listing or your competitors, so take the time to see what your competitors are doing and make sure you're doing something similar.

Most Etsy listings now allow you to include a short video as a supporting image when you create your listing. If your listings allow you to include this, you should, as Etsy prioritizes this over your main thumbnail and it will show in the anti-search results resulting in more clicks to your listing

Is Selling Digital Products on Etsy Worth it?

Selling digital products on Etsy is absolutely worth it, if you take the time to do it right.

As long as you're taking the time to include digital products as part of your overall Etsy strategy and you're following a niche-based approach (rather than a product-based approach), it's well worth the time and effort.

Keep in mind that digital products on Etsy, like anything else, are not a get-rich, quick or overnight success plan.

Rather, they should be part of your overall product mix on the platform.

Wrapping Up

As mentioned above, selling digital products can be an extremely profitable endeavor as long as you do it correctly.

Start by selecting your niche and then worry about the kind of products that the people interested in your niche would be likely to buy.

If you need more help choosing a niche or understanding how to validate if there's enough demand in the niche to help you reach your goals, you might want to check this workshop out.

Chris Shaffer

Chris lives at the intersection of business strategy and growth tactics. Having consulted with dozens of different businesses (as well as building several of his own), he brings a unique perspective on what's working across the eCommerce world in businesses of all shapes and sizes.