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INSIDE: If you've noticed that tons of people are selling Etsy digital downloads, you're not alone! It's a pretty hot sale on Etsy these days. Learn what types of digital products you can sell and best practices so you can make a killing right here!

In my Etsy affiliate post, I let you know that I make purchases on the Etsy marketplace often &#; but probably not for the kind of products you imagine.

I don't know that I have ever purchased a physical product, such as a handmade craft or a vintage item, from the site. Instead, I buy digital downloads, such as marketing materials, logo design, blogging tools and worksheet templates.

There is big money to be made selling digital downloads. For many freelancers, bloggers and home business owners, these Etsy sales opportunities provide not only a nice passive, side income but a full-time living.

The earnings may not always come immediately, as they do with an hourly gig, but you can create your digital item in your downtime and use it to supplement your finances until it takes on a life of its own.

Why should I create digital products?

Besides the secondary income opportunity, there are several other great reasons to get involved in the digital product arena.

If you're creating a product around your expertise, you can immediately position yourself as an authority figure.

This can lead to speaking and coaching positions or even a book deal. You can also submit your product to joint venture opportunities, such as Ultimate Bundles.

The sky's the limit. You can sell one digital download over and over and over again. And because downloads are usually delivered instantly, you can make passive income while you sleep.

What types of Etsy digital downloads can I sell?

Travel guides

Etsy shop owner Bailey Richert used her experience traveling the world to mold her digital product endeavor.

&#;Publishing a book was an item that was always on my bucket list,&#; she says. &#;I also knew it could be a great passive income stream, so that was the impetus for starting out in the writing business. The subject of travel was a natural choice for me because of my experience and passion for the matter. People are always saying &#;write what you know,' and when it comes to generating digital products quickly enough to start making income from them, that is incredibly good advice.&#;

Unique designs

Kristin Berry came up with a cool idea to help increase her monthly income and pay off student loans. As an Etsy seller specializing in wedding designs, she has this to say&#;

&#;I came up with the idea because I am a designer, and I had started seeing designs being sold on Etsy that made me think &#;I can do that, and I can do it way better!' I also think that it helps that I have a very fun, quirky style. There is not a whole lot of stuff out there in the wedding industry that breaks the mold from the traditional flowery stuff, so I think I found a niche that was untapped.&#;

A few of the top digital products on Etsy

According to CraftCount, top Etsy shop owners sell downloads of:

Other digital content

Consider selling a digital file of one of the following on Etsy:

Looking for more ideas? Grab this free idea list, which includes inspiration for all 12 months of the year.

An interview with an Etsy shop owner

There is a huge subset of Etsy sellers making money from virtual products. One of them, Shauna Huston, talks about how to sell digital downloads. She is supplementing her income by offering custom resume writing services in her Etsy shop.

What was your motivation to join Etsy?

My motivation to provide career consulting services came first, and that motivation came from seeing a problem with qualified people unable to land jobs, and knowing I had the experience and knowledge to help. My motivation to join Etsy came because I have heard numerous success stories from Etsy &#; however, none came from digital services.

I decided I wanted to utilize Etsy to become a success story that was different from the typical handmade items people think of when they hear &#;Etsy.&#;

What advantage does Etsy offer digital sellers over other platforms?

Etsy doesn't promote utilization of other platforms through their website because they make money off of each sale done through Etsy. I have discovered many advantages through Etsy, such as Etsy Teams, which allows you to join groups of other sellers, post to discussion boards and promote your items.

Etsy sellers have proved to be team players rather than competitive. They have promoted my items without my solicitation, which has boosted sales and exposure.

How does payment work?

There is a $ listing fee per item. When an item sells, Etsy charges a transaction fee of 5% of the total item cost.

Initially, I signed up with PayPal, but PayPal takes an additional 3%. I stopped using PayPal and connected my Etsy page directly to my bank account. Now when I receive an order the money is in my bank account within a couple of days.

Additional fees may apply depending on the type of sale and member.

What tips do you have for those looking to take a similar route to selling?

My biggest tip is to provide great customer service. When a potential customer contacts you inquiring about your services, you should respond within 24 hours, and the sooner the better. I respond to my clients within an hour &#; and typically within a few minutes. I have been constantly applauded for my prompt responses.

Another tip is to utilize the ads! The seller pays per click, and the turnaround is worth it.

Another tip is to price everything right. The biggest pricing mistake is to price too low. If you do, people will assume the services are not worth it and move on to what appear to be higher-quality services.

How to sell on Etsy

Do you have a product you're ready to sell on Etsy? Awesome! It's a great way to bring in some income with both handmade products and digital printables.

The Etsy platform is an established one, with many people eager to buy. It's intuitive for buyers and sellers, and it offers a complete selling solution for you. This means you don't need another website on top of your shop.

But you can't just throw together an Etsy shop and hope that money starts rolling in. So many products are available that yours will just blend in. You must take some steps to rise above the competition to improve your chances of being profitable. Here's a quick guide to how to be a successful Etsy seller.

1. Do market research

Market research basically means figuring out what's going on in the market right now. You want to get really familiar with what's there, how it's moving and what's missing.

Are people looking for products like yours? How much are they willing to pay? What sorts of features are nonnegotiable? Can you do anything to differentiate yourself from your competition?

Answering these questions is an essential part of market research. You need to know that there's a market for selling your goods before you invest a ton of time or resources creating them.

Take time to look at shops selling similar goods. These are your competitors, and their Etsy stores can provide a lot of information. How are their listings priced? What does their product description include? Is any customization available?

Read the reviews, looking for clues to what buyers are seeking. Do they really wish this skirt had a pocket or that journal was a bit smaller to fit more easily in a handbag? You also want to find out what they love about a successful Etsy shop, so you can be sure to offer or even improve on what the customers like.

Talk to people you know in real life who are part of your target audience. Poll people in your Facebook group. Find out as much as you can about who would buy your product, what features their ideal one would include and how much they're willing to pay.

Now you can use this information to create your offers and prepare to sell on Etsy. You want to be able to easily answer the question: Why should someone buy from you instead of your competitors? In other words, what makes your product different or better?

2. Create the product and set prices

Whether you're creating a handmade item or a digital download, you can't price it properly without some information about the production process. This means you should create at least a few samples or test pieces. You need to know:

• How much you spend on materials per item.
• How long it takes you to create it (your time is valuable).
• The size of the final product.

Once you have some samples, you can take photos of them for your Etsy shop. Remember that images sell, even with digital products, so take time to use good lighting and take quality pictures.

You can also create mock-ups using templates such as those offered at IvoryMix. It's better to have too many photos to start than not enough, so you can pick and choose the best ones to display.

You shouldn't price your product until this point. You need to be profitable, so to arrive at your price remember to include your materials, your time and the fees you need to pay Etsy for listing and selling. Then give yourself some markup. Otherwise, you'll just break even and not turn a profit.

You can compare your prices with your competitors', but be sure you don't go too low.

Remember this sage marketing advice: There's absolutely no advantage to being the second-lowest-priced product. Figure out what sets your product apart, emphasize those selling points, and charge what it's really worth.

If you need to lower your prices, you need to find a way to cut your expenses by changing suppliers or buying in bulk. Don't lose money selling your products.

3. Set up your Etsy shop

You can't make money on Etsy without creating a shop. Setting up your shop is pretty intuitive, but if you run into trouble you can check out the Etsy help section.

To start, click on the &#;Open Your Etsy Shop&#; button. Then create an account with your email address. You must fill in some basic information about your online store, including your language, currency and shop name. If the shop name you want is already taken, there's a name generator to help you think of a similar name.

Before you start sending people to your shop, complete your profile. You should tell a bit of your story in the About section, to help potential buyers learn about you and your products.

Weave some personal information in there to help you connect with your buyers. Adding a personal photo to your Etsy account instead of just a logo or product images can help build a connection as well.

4. Add your digital products

Once you pick a shop name, it's time to start listing items. Be sure you use strong keywords and plenty of details. Create digital item descriptions that make people want to buy and that answer the questions buyers will have.

As you're creating your listing, remember to use your photographs. Pick the one that best represents your product to be your featured image.

Fill out the pricing information and delivery details. Add several relevant tags with keywords to help shoppers find your Etsy printables.

Finally, take time to create policies for delivery, returns and exchanges. You want everything clearly spelled out, so your buyer knows what to expect. Your policies should prevent any surprises about the transaction for your customers.

You can upload up to five digital files. The maximum size for each file is 20MB.

5. Market your products

Once your listings are up, you can start marketing your product. Don't make the mistake of just assuming people will find your amazing goods on Etsy and start buying. It rarely works out like that.

You must tell people about your product. And you can't just drop a link and run. It takes continuous work to market your Etsy store.

Create social media accounts and make an email list for your Etsy store, and start building an audience. Get creative! Your audience wants to know about you, your products and your brand. Show your products being used. Take pictures of the behind-the-scenes process. Share the process from start to finish with a time-lapse video.

Share information in a non-pushy way. Focus on building relationships. Be sure you respond to comments and are genuine in your interactions. You don't want to spam your audience, so post a variety of content.

6. Get reviews

Good reviews help improve sales. People want to hear from other buyers that you're an amazing seller with an awesome product. (This is called social proof.)

To get reviews, be sure you provide excellent customer support. Use proper grammar, and be professional and courteous in your interactions. Make products that match your descriptions, and deliver them on time.

Then follow up with your customers. Send an email making sure everything is satisfactory. In your note, go ahead and ask for a review. You can either ask directly or include it in your signature. The simple ask can help you get more reviews.

7. Continue to sell on Etsy

If you've got goods to sell, Etsy is a great way to make money. It's a crowded marketplace, but there is room for you and what you offer. Create products that people want, and market them to your ideal audience. Make connections with your customers, and ask for reviews. Keep repeating these steps as you watch your income from your Etsy shop grow.

Etsy Sellers Will Tell You It's still work

I mentioned above that the income may not come instantly or automatically. You'll still have to hustle.

As Bailey Richert says about aspiring to make a full-time income from her products&#;

&#;I hoped I would, but that turned out not to be the case. As I learned more about the self-publishing industry, I realized just how competitive it is. As I learned more about business, I realized it was a wise decision to have more income streams anyway. It helps you reach those financial goals faster, and you're not putting all your eggs in one basket. You have to plan for the future and diversify the sources your money is coming from.&#;

&#;Knowing where your target market hangs out is key,&#; says Kristin Berry.

&#;When I first started, I had no idea how to reach people other than on Etsy, where I was listing and selling my products,&#; she says. &#;Over the years, I have tried many different marketing strategies, some free and some paid, and I have found a few that have paid off. The biggest marketing tool I currently use is Pinterest because it's full of brides-to-be looking for wedding ideas. Beyond that, I have found some great wedding blogs that I advertise with, and of course, word of mouth.&#;

Tools of the trade for Etsy digital downloads

All of the Etsy store owners I talked with were more than happy to share their favorite tools and resources with those aiming to create digital downloads.

&#;To be honest, the greatest tool you have is just dedicating time to your business. The more time you put into it, the more results you will see,&#; says Kristin Berry.

&#;Even if I have 10 minutes waiting for the train or 15 minutes while I am waiting in line, I will go on Pinterest or post something to Instagram, or whatever else I can do in that short time. I always think about the fact that each step you take to get yourself out there is one more potential client, which means one more potential sale.&#;

&#;Beyond that, I think that Google Analytics has been super helpful because it helps me see all of my streams of traffic, which in turn helps me determine which marketing tactics are paying off and which aren't. Also, I recently started using Pinterest Paid Pins, and that has upped my Pinterest game, allowing me to reach a lot more potential clients on a very affordable ad budget.&#;

Final thoughts about Etsy digital downloads

Etsy digital downloads can be extremely lucrative, and because they are digital in nature, it takes a lot less work that selling one-of-a-kind crafts on Etsy. Now, you know how to do it and you can get out there and start a fun and rewarding business.

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