The Pros and Cons of Selling Digital Products on Etsy
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Etsy is best known for being a marketplace for handcrafted and vintage items. Recently, it has become a great platform for selling digital products.
Digital downloads, printables, design templates, digital planners, and more attract audiences that enjoy immediate access as well as the unique designs these products on Etsy have to offer.
Here at Gold City Ventures™, we love all things printables and digital products. If you’re considering jumping into the world of selling digital downloads on Etsy, understanding the pros and cons is an important step.
In this blog post, we will explore the advantages and disadvantages of selling digital products to help you make an informed decision.
Pros of Selling Digital Products on Etsy
There are many good things if you decide that you want to sell digital products in your own Etsy shop. Here are some common things to consider.
Immediate Delivery & No Shipping Costs
One of the greatest advantages of digital downloads is the ability to have your product available to download immediately after the purchase. That means Etsy sellers do not have to worry about shipping costs or waiting for the physical product to be delivered.
Low Overhead Costs
Running an online business is no easy feat. As a digital download seller, once you’ve created the digital product, you can sell that very same product over and over again.
Other than the Etsy fees which include listing fees and transaction fees, choosing to create and sell digital downloads has a low cost. Unlike physical items, you don’t have to worry about materials, storage, or restocking. Many Etsy sellers choose to go digital due to the increased profit margin.
Passive Income Potential
One of our favorite things that we love about digital products is the passive income that can come with it, especially on Etsy. You can open a new shop and start selling in the course of a weekend.
After putting in the upfront work, you can maintain your Etsy shop and monitor and update your products as needed, but you do not have to actively manage each sale and your shop can almost run itself.
If you choose to sell digital products, you can easily sell to customers from all over the world and there is no limit to who or where your digital downloads can reach.
By not having physical products to ship, you can increase your appeal to your potential customers that you would not otherwise have had access to and you will not be limited by the complications and expenses of international shipping.
Flexible Work Schedule
Many Etsy sellers choose to sell digital goods and downloads because it is less hands-on and does not require as much attention as physical inventory might. It is less time-consuming in that they can work on new digital products and designs as their schedule allows.
Not selling physical goods means there is less waste, shipping materials, and transportation emissions. If you are an environmentally conscious person, this is a great benefit of being a digital product seller.
Builds Brand Reputation
As with any product on Etsy, consistent positive reviews can help you establish credibility with target customers and build a brand reputation, drawing more customers to your shop.
Cons of Selling Digital Products on Etsy
While selling digital products on Etsy may seem too good to be true, it is important to know some of the disadvantages that come with it. Here are some additional things to consider.
It may seem like everyone you see these days is selling digital products on Etsy. The ease and low overheads mean many sellers are jumping on the bandwagon, rightfully so. Your unique designs could be drowned out by the sheer volume of competitors.
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By Gold City Ventures™
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Risk of Copycats
When you sell a digital product, whether it be on Etsy or your own website, there’s always a risk that someone might reproduce, replicate, resell, or distribute it for free. It can be a very frustrating experience but there are some steps you can take as a seller to ensure your work is unique and not prone to these types of behaviors, but it can’t eliminate the risk.
You can better prepare for the possibility of copycats. Check out our previous post, How to Protect Your Printable Designs From Being Copied or Stolen.
Dependence on Etsy’s Platform
Etsy is a great option for many sellers starting out due to the traffic that Etsy brings to your store on your behalf. Each seller does not have to do much additional to get buyers to their stores, although mastering SEO and understanding Etsy search is beneficial.
Selling on Etsy does mean, however, you’re at the mercy of their rules, algorithms, and fee structures. If they make changes to their platform or terms of service, it might affect your shop’s visibility or profitability.
Race to the Bottom Pricing
With some of your Etsy competitors, you may experience race to the bottom pricing, where it may seem that a sell is listing similar products to yours for less than their actual value to try and land the sale. This strategy can be detrimental to other sellers, as they may feel to compete, they too have to lower their prices to gain sales.
How Should I Price My Digital Products?
Finding the sweet spot when it comes to pricing your digital Etsy products is an important step you will want to take with your shop. Check out our guide on pricing.
How to Price Your Digital Products on Etsy
In addition, some customers might perceive digital products as having a lower value than physical ones. This perception can affect your pricing strategy and overall income.
Technical Difficulties and User Errors
While we live in an ever-evolving tech-driven world, not all of your customers are going to be intuitive when it comes to this skill set. It is very common to have buyers reaching out to you about how to access their digital downloads from the platform itself.
For my own Etsy shop, the most common customer service request I receive is when a customer is unable to access their downloads, not realizing that they cannot access them using the mobile app, rather they need to be logged into their account using a browser.
In addition, buyers may struggle to use a particular program intended to edit the digital product or have difficulty printing items too. This can lead to potential disputes, refunds, and sometimes even negative reviews.
Saturation of Popular Niches
With the popularity of printables growing on Etsy, certain niches, like printable planners or selling digital prints or wall art may seem to be oversaturated, meaning there are a lot of sellers competing to sell similar products. Sure, the demand does exist for these products, but the challenge will be finding a unique angle to tap into the niche and achieve success.
Choosing Etsy as your platform for selling digital products comes with great rewards and can help jumpstart and propel your business forward and help you reach your goal of passive income.
Of course, as with any business venture, it comes with its own set of challenges. As an Etsy seller, you need to be aware of the increasing competition, the potential for copycat products, and the potential difficulty of dealing with a digital customer base.
If you decide to
If you decide to make Etsy your starting point, focus on creating unique, high-quality products and deliver stellar customer service.
Being aware of the pros and cons, and strategizing accordingly, will put you in a prime position to make the most out of selling digital products on Etsy.