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Are you an artist, crafter, or designer looking for a new way to sell your products? 

Have you considered selling digital downloads on Etsy? It’s a great way to reach more customers and increase your sales.

I’ll explain how to set up your shop to sell digital downloads, list your products, and process payments. You’ll also get some tips on marketing your products and driving traffic to your shop.

Let’s get started!

a woman working on her laptop to sell digital downloads on Etsy

How to sell digital downloads on Etsy

When you build your digital Etsy shop in an organized and methodical way, it will make the process of selling digital downloads much easier. Here are the steps to take when setting up your shop:

1. Start by researching the market

The first step to selling digital downloads on Etsy is to make sure there’s a market for your product. Do some research and see if there are other shops that are already selling similar items. If so, look at their prices and offers to give you an idea of what customers might be expecting from your shop.

Next, you may want to take your research a step deeper and use a keyword research program. These programs can tell you how many people are searching for your items, how many searches are converting to sales, and how hard or easy it is to get your items seen on the Etsy marketplace.

Some great programs for this include Marmalead and Etsy Rank. You can purchase monthly or annual memberships to use these services. They both also have limited free versions.

2. Create brand visuals

Having consistent branding visuals is an important part of selling digital downloads on Etsy. Start by creating a logo, color palette, and font style that you’ll use throughout your shop as well as on your digital items.

You can create these yourself or hire a professional designer to help. Branding helps establish trust with customers and helps make your shop stand out from the competition. When customers fall in love with your brand, they’ll come back for more.

Your brand elements will be handy when it’s time to design your digital items. Having a specific brand helps to distinguish your products from others and will give your store a cohesive look.

Related: 60 Best Etsy Shop Ideas to Make Money Online

3. Design your digital download products

Once you’ve created your brand visuals, it’s time to design your digital items. Start by planning out all of your inventory. It’s best to open your Etsy store with at least five to ten items, so make sure you have enough designs in mind.

Your digital products can vary in file size, format, and content. You can create PDFs, images, audio files, video files, and more. As long as your product is a digital download that meets Etsy’s guidelines (no copyrighted material or offensive content), you can sell it.

When designing your digital products, make sure you use the brand elements you created to keep everything cohesive. Also, be sure to specify any usage rights and restrictions so customers know what they are getting when they purchase an item from your shop.

4. Choose a name for your Etsy shop

Choosing a name for your Etsy shop is an important step. It should give customers a sense of what products you offer and also should be memorable.

Don’t rush this decision. Take some time to brainstorm and research potential names before settling on one. You may also want to consider using keywords in the title as this could help with search engine optimization (SEO).

You can also add a tagline to your shop name to further explain what you offer. This is especially helpful if you have a unique niche.

a woman in front of her laptop holding her eyeglasses and like to sell digital downloads on etsy

5. Set up your Etsy account

Now that you have all the necessary materials, it’s time to set up your Etsy account. When signing up, be sure to enter accurate information and make sure your shop policies are clearly written.

Etsy also requires you to fill out a tax form before listing items for sale in some countries. If required, make sure you complete this step.

You’ll need to make decisions about your return policy. It’s less common for an Etsy seller to offer returns when it comes to digital products since the purchaser will always have access to them once they download the product. However, you can set your own return policy if you choose to.

Related: How to Make Money on Etsy: Everything You Need to Know

6. List your digital items for sale

Once you have all of the necessary materials, it’s time to list your digital products for sale on Etsy. 

Start by creating a listing that includes all the details and images of the product. Be sure to use keywords throughout so customers can easily find your product when they search.

When setting a price, consider the content and value of what you are offering, as well as any costs associated with creating it. You may also want to offer bundles or discounts for buying multiple items at once. This can help incentivize customers to buy more from your shop.

7. Decide how you will share your digital downloads

Once a customer purchases one of your digital items, they’ll need to know how to download and access it. You can choose to email the file directly or have customers access it using a code via an online platform.

If you decide to use an online platform, be sure that it meets security standards and is easy for customers to navigate. Additionally, you’ll need to clearly explain the download process to customers before they purchase.

8. Have someone test the purchase process

It’s important to make sure the purchase process for your digital downloads is working correctly. 

For this reason, have a friend or family member go through the entire process of purchasing an item from your shop. This will help you identify any issues and make sure customers have a smooth experience when buying something from your store.

a woman with her laptop smiling while selling digital downloads on etsy

9. Promote your Etsy shop

Once your digital items are ready for sale, it’s time to start promoting your shop. You can use a variety of marketing tactics like blogging, social media posts, and email campaigns to reach potential customers.

You can also use Etsy Ads and SEO tactics to reach customers who are interested in buying digital products like yours.

Whenever you create a new digital download, be sure to share it on your social media channels and website. Connect with other creators and cross-promote each other’s products. This is a great way to reach a wider audience and increase sales.

10. Monitor your shop activity

Finally, keep an eye on how your shop is performing by checking the analytics dashboard on Etsy. This will give you insight into what items are selling and what strategies are working best.

By regularly monitoring your Etsy shop, you can ensure that your digital downloads are successful and also make adjustments as needed.

Do digital downloads sell well on Etsy?

Digital downloads are one of the most popular categories on the Etsy marketplace. They offer customers convenience and instant gratification. Since many Etsy users are crafters, digital downloads are also a great way to find the basic supplies for craft projects without the hassle of shipping and waiting for items to arrive.

Since digital downloads are usually more affordable than physical items, there are usually higher conversions and more sales. This makes them a great choice for Etsy sellers looking to supplement their income or build a full-time business.

Digital items are also easy to customize, and many people enjoy downloading products that have been personalized for them. This is an excellent way to increase customer satisfaction and create a unique experience on Etsy.

a woman working on her latop selling digital downloads on etsy

Best selling digital products on Etsy

While the sky’s the limit when it comes to offering digital items on Etsy, here are some of the most popular digital downloads you can incorporate into your Etsy shop:

  • Crochet and sewing patterns: Patterns are some of the most popular digital downloads on Etsy. You can focus on a specific craft and create patterns for items like sweaters, hats, and bags.
  • Digital art: Digital art is another popular digital download on Etsy. Customers can purchase illustrations, graphics, fonts, and more to use in their own projects or just print out and enjoy as wall art.
  • Presets, brushes, and overlays: Designers can also create presets, brushes, and overlays for programs like Illustrator or Photoshop. These are great for customers who want to add unique effects to their own projects without learning how to use the software from scratch.
  • Printable planners and templates: Planners and templates are a great way to help people get organized and organized quickly. Customers can purchase and instantly print out these items with no hassle.
  • Clip art: Clip art is also a popular digital download on Etsy. This can be used for everything from scrapbooking to web design and crafts.
  • Fonts: Fonts are a great choice for digital downloads on Etsy. You can create unique fonts in a variety of styles and customers can use them to customize their own projects.
  • Coloring pages: Coloring pages are a popular digital item for children and adults alike. There’s a wide variety of styles and themes in this category, giving customers plenty of options to choose from.

You may also be interested in: 23 Best Things to Sell on Etsy to Make Money

How to create digital downloads to sell

1. Brainstorm ideas

The first step in creating digital downloads to sell on Etsy is brainstorming product ideas. Think about what kind of products customers might be looking for and how they would use them.

You can start by hand-sketching ideas or using a digital drawing program to create prototypes. Once you have some rough ideas, refine them and give each product an individualized look and feel.

2. Design the item

Once you have an idea, it’s time to start designing your digital download. This means adding colors, fonts, and details that make the product feel finished and refined.

You’ll also want to make sure your products have a high resolution so that customers can print out or resize their digital download with no trouble.

If you’re not proficient in the Adobe suite, Canva is a great tool for creating digital downloads (you can download Canva for free here!). It’s an intuitive platform that allows you to create professional-looking designs with ease. It’s also easy to make customizations or adjustments to your design if needed.

3. Create any necessary variations

Once you have the basic design completed, you’ll need to create any variations that customers might want. This could include different sizes or color options for a product. It could also include a separate file type such as a PDF or JPEG.

For example, if you’re selling a knitting pattern, you may want to offer multiple sizes or yarn weights so that customers can choose the best option for their project.

a man in front of her laptop selling digital downloads on etsy

4. Create clear instructions for your digital downloads

If you want customers to be able to use your digital downloads successfully, it’s important to provide clear instructions on how the product works.

For example, if you’re selling a budgeting spreadsheet, you’ll need to include detailed steps on how customers can customize and upload their content into the template. You can create a PDF, or even make videos that customers can watch to understand how the product works.

The more detailed you are with your instructions, the better the customer experience will be. This means fewer complaints and questions down the line.

5. Format, bundle, and upload your digital downloads

When you’re ready to start selling your digital downloads, you’ll need to make sure they’re formatted correctly for Etsy. This includes making sure each item is less than 20MB in size and that it’s a supported file type (JPG, PNG, PDF, etc.).

If your items are larger than 20MB, you can create a PDF or document with a link that directs the customer to the file. You can also bundle multiple items together if they have a similar theme, such as a set of coloring pages or knitting patterns.

How much money can you make selling digital downloads on Etsy?

The great thing about selling digital downloads on Etsy is that you can make a considerable amount of money with relatively little effort. Depending on how many items you sell and the price point, you could make hundreds or even thousands a month through digital downloads.

It’s important to note that success won’t happen overnight, however. You’ll need to invest time into creating quality products and marketing them to customers.

The type of items you sell and the price point will also influence your earnings. For instance, simple items like a one-page PDF may only sell for $2 to $3, while more complex products such as an online course could sell for upwards of $100.

By doing research and testing out different items, you can figure out what works best and start earning a steady income. Even when you start out small, since there is no physical product, you can expect to make a high-profit margin and have low or no inventory costs.

a woman selling digital downloads on etsy

In order to increase your earnings, you’ll want to focus on both the design and functionality of your products. When people notice that the designs look sharper or are easier or more effective to use, they’re more likely to purchase again and spread the word about your products. 

Plus, you can keep track of customers who purchase from you multiple times in order to create loyalty programs, email lists, or discounts for repeat buyers.

What is the best digital download format for Etsy?

When it comes to images, JPG and PDF files are usually the best formats to use on Etsy. JPG files are great for saving images with a smaller file size, while PDFs can be used for anything from coloring pages and patterns to online courses or e-books.

Video files are best saved as MP4s, though you can also upload them to YouTube and embed the link in your listing.

Documents such as spreadsheets or reports should be saved as XLSX or DOCX files.

No matter which file format you use, make sure to include detailed instructions on how customers can download and use the product. 

This will give them a better understanding of what they’re buying and increase the likelihood that they’ll be satisfied with their purchase.

Can I sell digital downloads on Etsy using Canva?

Canva is one of the most popular ways for creatives to design their digital downloads for Etsy. It’s a user-friendly platform that makes it easy to create beautiful visuals and graphics with minimal effort. It has plenty of stock photos, templates, and tools to help you create stunning visuals.

Canva also has a paid subscription plan that gives you access to more features and content. However, it’s not necessary to pay for this program to use it, especially when you’re starting out – in fact, just click here to set up your free Canva account.

It has plenty of great free features for basic editing and designing.

Some great items you can design for Etsy using the Canva platform include:

  • Invitations
  • Social media graphics
  • Printables
  • Logos
  • Business cards
  • Brochures
  • Postcards
  • Flyers

Canva is also a great platform for creating customizable digital products. You can easily copy your designs within the same platform and make subtle changes to customize them for different customers. 

This is an excellent way to offer personalized products without having to manually edit every design or create something from scratch each time.

You may also be interested in: 9 Easy Steps to Sell Prints on Etsy (to Make Great Money)

Do I need a business license to sell digital products on Etsy?

No, Etsy doesn’t require a business license to sell digital products. However, it’s important to check the laws in your own country or state as each jurisdiction may have its own rules regarding the sale of digital goods and corresponding licensing needs.

It’s also a good idea to consult with a tax professional if you plan on making regular income from selling digital downloads on Etsy. They will be able to help you set up the proper processes for tracking and reporting your earnings so that you can accurately report your income to the government.

When you make your first sale on Etsy, you’ll be considered a sole proprietor and will need to pay self-employment taxes. This is the default business structure for any Etsy seller, and it’s important to understand the legal requirements that come with running your own business.

As your store and income continue to grow, you may want to consider changing your business structure, setting up an LLC, or getting a Federal Employer Identification Number (EIN). A professional can help you decide which option is best for you.

Etsy digital downloads and copyright

It’s important to remember that when you offer digital downloads for sale on Etsy, you are responsible for any copyright issues. You must have the rights to use and sell all content in your shop, including text, photos, artwork, and code. Usually, a commercial license is required to do so.

If you’re creating your digital downloads from scratch, you are automatically the copyright holder and can legally sell them. You are also responsible for protecting and defending your ownership, which may look like registering for copyright protection or getting a trademark.

However, if you’re using any third-party materials or content, such as stock photos and video clips, you must purchase an appropriate license so that you have legal permission to use it in your shop. Alternatively, you can use Creative Commons-licensed images or content.

When in doubt, it’s best to contact the copyright holder or creator of the material and get permission before selling any digital downloads that contain their work. Doing this will help protect your business and keep you on the right side of copyright law.

a man smiling in front of his computer selling digital downloads on etsy

What if someone steals or copies my digital downloads?

If someone steals or copies your Etsy digital downloads, it’s a good idea to contact them and ask them to stop. If they continue, you can reach out to Etsy and report the infringement. Etsy may take action, such as removing the listing or a suspension of their account.

It’s also important to remember that you can always bring a legal claim against anyone who infringes on your digital work if it’s protected with a copyright.

You can do this by filing an infringement claim with the U.S. Copyright Office, or reaching out to a lawyer for help with the process. This could result in a cease and desist letter or even a settlement payment for damages.

Be clear in your store policies and listing descriptions if your digital items are copyrighted and not to be redistributed or shared. This could help deter someone from attempting to copy your work in the first place.

Should I watermark my digital downloads on Etsy?

Watermarking your digital downloads is a great way to protect them from theft or unauthorized use. It also adds an extra layer of security if someone does attempt to copy it, as they won’t be able to remove the watermark without degrading the quality of the image.

You can add a watermark by using an online photo editor such as Canva or Adobe Photoshop. Simply upload your digital download and then add a logo or text watermark to it. Just be sure to keep the size small enough that it’s not too intrusive but still visible enough to protect your work.

You may also choose to watermark your listing photos and preview images to help protect your work from unauthorized use.


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About the author

Anna is the founder of LogicalDollar and a personal finance expert, having been featured in Forbes, HuffPost, Reader’s Digest, Bankrate, MSN Money, Yahoo! Finance, CreditCards.com and many more. With more than 10 years of experience in the financial and legal industries, bachelor’s and master’s degrees in these fields, as well as her own journey in turning $60,000 in debt into a thriving investment portfolio, she’s committed to helping others get on the path to financial freedom. Find out more.