One question that we get all the time from new Etsy sellers is whether. They should focus on selling digital products or print-on-demand (POD) products.
Before I can give a straightforward answer, we need to take a look at the pros and cons of each method so that you can determine for yourself which is right for you and your niche.
Plus we'll dive into a few different examples along the way.
Selling Digital Products On Etsy
Let's start by taking a deep down into digital products.
When we look at digital products, it's hard to see anything other than the pros.
When you hear people talk about their digital products and stores, it seems like the perfect way to set up a business, and for many people that can be the case.
One of the biggest advantages of a purely digital Etsy store is that you never have to worry about inventory.
Since you are selling a digital product, you never have to deal with a supplier running out of stock or changing the product.
Outside of the print-on-demand world, inventory costs can be one of the single biggest expenses for e-commerce businesses. Businesses.
If we focus on print-on-demand, we still lose a good portion of each sale to creating our physical inventory.
This is something we can avoid entirely when you have a digital shop.
Additionally, You never have to worry about shipping which can be a giant headache for anyone dealing with physical products.
Since you are fulfilling all your words digitally, when you have a digital store, you never have to worry about something getting lost in the mail, charging for shipping, or dealing with tracking numbers.
You simply email the file to the customer and your job is done.
Low Cost/High Margins
Since your fulfillment cost of a digital product doesn’t involve any shipping or product costs, it means you take home a huge chunk of the selling price of your product.
In fact, if You are selling in the Etsy ecosystem, you'll be taking home a little over 90% of each sale after all of the Etsy fees are accounted for.
Low Customer Support
Since you aren't dealing with shipping physical products, you have no worries about shipments getting lost in the mail or the wrong product being delivered to your customer.
On the off chance that your customer can't find the product or has some other issue, everything can be resolved by you quickly using a message inside Etsy or a simple email exchange.
Additionally, if you find that you keep having the same issue, It can be resolved permanently by including a simple video along with the digital download, to help your customers resolve the issue in the future.
Unfortunately, like most things in life selling digital products on Etsy is not all sunshine, rainbows, and butterflies.
Let's take a look at a few of the biggest downsides of this approach.
Tons of Competition
The single biggest issue with selling digital products, especially somewhere like Etsy, is the sheer amount of competition.
After all, if you read the pros section of this article, you were probably about ready to create a digital store for yourselves. Because of the high margins, low cost, and overall ease of running a digital store, it's a highly competitive thing in virtually every niche you can imagine.
Product Creation Time
Even with some AI tools like mid-journey making creating digital products easier than it ever has been before, creating a high-quality digital product takes a ton of time.
We won't even get into how much time it takes to create some of the nice financial spreadsheets or video templates that people sell on the platform, because even creating a simple printable file is something that typically takes several hours.
Limited Product Line
In addition to product creation, time, and competition, one of the biggest downsides to selling digital products is that you are limited in the number of products you can create.
If we return to an example we've talked about previously in the chicken niche, we can easily see this in action.
Although this store is making a substantial amount of money selling a chicken coop and chicken run plans, there are only one or two other chicken-related digital products that they can add to this store, which caps the amount of income they can earn.
Last, but certainly not least, you cannot create and launch a digital product store on Etsy without at least a few skills.
What I'm talking about here isn't necessarily technology related, although having tech skills certainly helps.
Many of the products that make the most money in the digital space on Etsy require you to have at least a fundamental knowledge of the premise you are creating.
For example, just about anybody could launch a listing, selling a budget planner or chicken coop plans.
However, as soon as you get the first customer that buys that product and realizes you know nothing about building a chicken coop or budgeting, because the plans don't make sense or the spreadsheet doesn't work, the jig is up.
Selling Print-On-Demand Products OnEtsy
Now that you have a better understanding of some of the pros and cons of selling digital products on Etsy, let's take a quick look at the positives and negatives of selling print-on-demand products.
Just like with digital products, there are a huge number of reasons why you may want to consider adding print-on-demand products to your Etsy shop.
The first major positive side to adding print-on-demand products to your NC store is that there is substantially less competition than with digital-only products.
Since you have more product options with something like print-on-demand than you would with a digital product, it means you have less competition both at the niche level and at the individual product level.
Since we don't have any inventory costs with the parental demand model and print-on-demand, designs can be created for free, with no fancy software (We typically use Canva or Kittl), You can have products up and running for as little as 20 cents (the Etsy listing fee).
Faster Product Creation
Additionally, product creation for print-on-demand is way faster than it is to create a digital product.
Not only do you not have to make sure that your spreadsheet works perfectly on every type of device your customers might use it on, but the limited amount of time you need to invest in creating a design for a print-on-demand product can result in even more income.
This is because you can reuse a print-on-demand design with no or very limited changes to the design itself across multiple different types of products.
This means the time and effort we put into creating one print-on-demand design can result in us creating five or more listings for the same amount of upfront work.
Ability To Create Product Lines
Unlike digital products, when you have a print-on-demand store, it's much easier to create product lines.
This is partially due to the same reason we talked about above, you can use the same design across multiple different products.
But it's also because most print-on-demand providers, like printify, have a huge selection of different kinds of products that we can add to our store.
If we are using the niche-based approach, there's no reason we can't take advantage of the full catalog of one of these providers, as long as our designs are something our niche would be interested in.
Because it's faster to create products, low cost, and easy to build out a product line, print-on-demand is much easier to test products.
Whether we just want to test a new design across a few different product types or we want to take advantage of the new products added to our print-on-demand providers catalog, we can have new products up and launch in a matter of minutes for just $0.20.
This is something we could never do in a digital product world.
Obviously, just like digital products, print-on-demand products are not all sunshine and rainbows.
Lower Profit Margins
When we are taking a look at the difference between digital products and physical products, print-on-demand products will almost always have a lower profit margin.
Since we have real costs associated with print-on-demand products, including the cost of goods and the cost of shipping, we typically average a 30 to 40% profit margin, compared to the nearly 90% plus profit margins we can see on the dual products.
For example, if we sell a digital product for $10 and a print-on-demand product for 25, the dollar amount we make will be virtually identical.
For higher value products, such as Sherpa blankets which often sell for $50 or more, chances are we will walk away making more profit than we would by selling a digital product.
In addition to dealing with lower profit margins, unlike digital products, print-on-demand products can often result in us having to deal with customer service and logistical issues. Issues.
For example, because we are using the internal Etsy messaging system to fulfill a digital product, it can't get lost.
On the other hand, it's not uncommon to hear of packages getting lost, misplaced, or never delivered.
I don't want to pretend like this is something that happens every day because it's not, but it is an important consideration in terms of the time and frustration that can be felt from a customer service standpoint.
In addition to potential shipping issues, it's not unheard of to run into inventory issues with suppliers.
Unlike digital products which have an unlimited supply, if we have a product that is selling very well and our manufacturing partner runs out of that product, we can no longer sell it until they have it in stock again.
Although using platforms like printify can help us avoid this issue by having multiple suppliers for the same product, it still results in potential loss of orders and can be an all-around pain in the butt if it happens.
Speaking of suppliers, we need them in the print-on-demand world.
If you enjoy working by yourself and creating digital products, you don't ever need anybody else to be able to create as many listings as you can think of.
Unfortunately, in the print-on-demand world, we do need to find a supplier for each product that we want to sell.
Although you usually are able to find a decent supplier for most product types that you can think of, it can be extremely difficult to find people to help you produce every product idea that you have.
More Customer Support
In addition to some of the customer support issues that can come from missing or lost shipments, the overall burden of customer support in a print-on-demand business is substantially higher than in any digital products business.
This is because, unlike in a digital product business, there's the possibility of the wrong product being sent, the printing being done incorrectly, or the customer not understanding what the product is that they are purchasing.
Although customer service issues are not a daily occurrence in a print-on-demand business, it is something that you will need to set aside a bit of time for each week. And even if you've lucked out so far, you will eventually have some sort of a customer service issue.
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Is It Better To Sell Digital Downloads or Print-On-Demand Products on Etsy?
Now that we've taken a look at the pros and cons of each model, you might be wondering, if it is better to sell digital downloads or print-on-demand products and which we prefer.
The truth is, there's no reason you shouldn't include both types of products in your store.
If you have already launched a store built around digital products, there's no reason you can't add a few print-on-demand products to help flesh out your store and increase your revenue.
Alternatively, if you already have a print-on-demand store, take a look at your niche and see if there's a way to add a product that's a digital download.
If you're struggling with ideas for what kind of digital product, adding checklists and planning guides for something related to your niche will almost always do well.
Whether you're considering selling physical products using a print-on-demand model or you're leaning towards selling digital products, it's important to keep in mind all of the positives and benefits of each model we discussed in this article.
I would also strongly advise that you take a look at incorporating at least a handful of products from the other type into your Etsy store.
This hybrid store approach between print-on-demand and digital products allows you to take the positive side of both store types and balance out many of the negative sides as well.
Chris ShafferChris 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.
The Simple 5-Step Process We Used To Generate $64,000 In 12 Months Working Part Time On Etsy.Yes, Send Me The Roadmap!