Digital products on Etsy have made a name for themselves on the eCommerce platform.

Sellers are making thousands in passive income thanks to this “make it once sell it forever” product class.

Top-selling digital products on Etsy include:

1. Printable and Digital Planners
2. Spreadsheets
3. Goal Trackers
4. Lightroom Presets
5. Custom Digital Watercolor Paintings
6. Calendars
7. Website and Social Media Templates

The best part about selling digital products on Etsy is that you don’t even have to be an expert in the field to do well.

Read below to find out more about what digital products are and how you can start making money with the top-selling ones.

Digital Products On Etsy and Their Pros and Cons

Etsy is an eCommerce platform synonymous with handmade arts and crafts products.

While it may be true that the company started out as a “handmakers marketplace” it has since then expanded into so much more!

One of the large pieces of the Etsy revenue pie is something we call a digital product. Digital products, also called digital downloads, are digital files that customers can purchase and print or use virtually.

Once a customer purchases the digital product they are given a link or a downloadable file with the product.

There’s a broad range of these, and, even if you’re already selling physical goods or know a craft like knitting or metalsmithing, odds are, there’s also a digital product you can make.

Printable and Digital Planners, Spreadsheets, and Goal Trackers

Planners and goal trackers are used to mark events and meetings on a calendar as well as make to-do lists and track goals and habits. Spreadsheets can be used for budgeting or managing busy schedules and dates.

All of these products can be downloaded and interacted with, or printed out and can be used by anyone and everyone, from a single mom to a small business.

Pros:

-These are relatively easy to make for beginners and experts alike and there’s a lot of creative control.

-They are always in high demand and sought after by all kinds of shoppers.

-These can be made in a variety of apps and programs including Canva, Adobe InDesign, or even Powerpoint.

Cons:

-The market for these is extremely saturated on Etsy, meaning that it is difficult to price competitively, make a profit, and stand out.

-Most software and applications require subscriptions or memberships to use any or all features to create the product.

-There is a possibility of having your work stolen (copyright infringement) by other shop owners and designers.

Lightroom Presets

If you are a Photoshop pro, Lightroom presets might be up your alley. These presets are made of a variety of things including light balance, saturation, exposure, shadows and highlights, sharpness and grain, et cetera.

These products are geared towards other Photoshop users or people who want a cohesive, themed album or collection.

Presets can be cinematic, romantic, saturated, and vibrant, or even vintage and retro.

Pros:

-These can be made fairly quickly with a practiced hand.

-There’s a lot of room for customization.

-There’s a huge market for presets and thanks to social media, it’s only expanding.

Cons:

-Etsy is filled with Lightroom preset listings, and oftentimes, they sell for a few dollars for a thousand preset bundle.

-You need a Lightroom subscription to make presets.

-Since it’s hard to get a perfect preset per photo, people often seek preset bundles, making selling individual presets unsustainable.

-Your work can be stolen and sold by others.

Custom Digital Watercolor Paintings

A more traditional approach to selling digital items is custom watercolor paintings. Thanks to the power of digitization, anyone can now have custom fine art in their home or business.

Pros:

-Because these are custom, shoppers are more likely to pay a higher price.

-If you are making custom art for a business, your work gets more exposure, visibility, and marketing

-These prints can be made across multiple programs and software including Illustrator, Procreate, or Microsoft Paint.

Cons:

-These are more time-consuming and require more attention.

-Creative control is more limited since you are catering to a client who wants something specific.

-Custom paintings cannot really be marketed in the same way a premade product can, meaning that their visibility is considerably lower.

-It is harder to get clients if you don’t have a following or a reputation as a digital artist

Website and Social Media Templates

It seems that everyone and their mother has a website or social media of some kind nowadays. Because of this, templates have become really popular because very few people want to spend time painstakingly customizing and curating their websites and social media posts from scratch.

Pros:

-These are relatively easy to make on Canva

-There’s a lot of creative control

-These are priced higher than other digital products on Etsy

Cons:

-Selling individual templates is not sustainable.

-The market for templates is very competitive on Etsy.

-These can be more time-consuming to make.

-A template made for Squarespace might not be compatible with Wix or other platforms.

What Are The Benefits of Digital Products?

There are 3 main benefits of digital downloads as products.

1. No Inventory

Having to always hold or deal with inventory is one of the biggest drawbacks of a traditional e-commerce business.

For many people, the concept of having a dedicated space to put inventory of ready-made goods and the tools and supplies to make those goods is a bit daunting- and for some, it simply isn’t feasible, especially if they are in an urban environment with a small amount of space.

Not only that, but if you are selling physical goods, most likely, you keep track of how much of the supplies and tools you have, and how much you purchased them for so you can price your products accordingly.

That just sounds like a lot of accounting and bookkeeping that no one wants to do.

Not only that, but having inventory can be costly and the initial investment required to run a shop might deter people- and stop them from pursuing it altogether.

Having a digital downloads shop might only require a subscription to Adobe Photoshop or Procreate while having physical inventory might be significantly more costly.

Selling digital downloads literally implies that there is no need to hold inventory- except a computer, and, maybe, a drawing tablet.

The shop owner is free to expand and scale up their shop to whatever proportions they desire, without having to be concerned about the logistics of inventory and space.

2. Scalability of Income and Higher Profit Margin

The second perk of owning a digital products shop is that you can make the item once- and then sell it for an infinite amount of times.

Remember the “make it once, sell it forever” principle we mentioned earlier?

Well, it certainly plays a role in digital commerce.

If you are strapped for time and have a 9-5, selling digital downloads might sound appealing because you can spend, say, five hours meticulously designing a calendar or goal tracker, then reap the rewards a day afterward- or ten years afterward.

The longevity of having a digital download shop is infinitely scalable, which means that the profit margin for every hour worked can potentially be higher than making physical products for a fixed hourly income.

3. Easier to Sell

Because of the nature of digital products, you can price them more competitively because, as we’ve mentioned, the income is scalable.

There are no material costs or shipping associated with digital goods so selling them is cheaper and easier.

Physical goods can take weeks to arrive, especially if shipped internationally, and sometimes arrive broken.

Sometimes, they don’t arrive at all! This dissuades some buyers, but digital downloads don’t have that nuance tied to them. One click and the product is within the customer’s grasp.

Maximize your Etsy growth and accelerate your discoverability by dramatically improving your Etsy search optimization.

Search is everything on Etsy and lucky for you our all-in-one Etsy optimization tool will provide top keywords in real-time with little competition, allowing you to get ahead exponentially faster.

Get in touch with us today!