Selling Digital Downloads on Etsy: Best Guide in 2023

Selling digital downbloads on Etsy: best guide header

Digital downloads have transformed the way artists and designers are able to make extra money and earn a passive income from their efforts.  In this post, I’ll explain how creatives can sell digital downloads on Etsy. This is the process in a nutshell…

Set up your Etsy shop and list your digital downloads (printables) as you would with physical items, making sure to state they’re digital goods. The most common file types are JPG, PNG, and PDFs. When a customer purchases the digital product, Etsy will send them a link to download the files.

Sounds simple enough as a summary but of course, there is far more to it, it’s no easy task. Passive income only happens after a lot of hard work upfront, and then it’s never guaranteed! I’ve laid out what you must do with a reality check at the end, so keep reading. 

Let’s start

(I get commissions for purchases made through affiliate links in this post. However, I only promote products I like and recommend)

What Are Digital Downloads?

Digital downloads can be all sorts of things, from printable wall art (often described as printables) to digital planners and templates, coloring books, ebooks, and so many more. Essentially, they are anything that can be turned into a digital file and downloaded.

The Advantages of Selling Digital Downloads on Etsy

There are several advantages to selling digital downloads that will appeal to artists and creatives, let’s go over them:

  • Creating a Passive Income Stream: It’s the dream. Do the work once and enjoy a recurring income with no extra work. We all want that right?
  • No Physical Inventory: No more packaging, storage, stocktaking, breakages, quality control, shipping, customs, returns, unforeseen costs, and trips to the post office.  
  • Instant Sales: Your item at the click of a button. It’s instant and as any merchant will tell you, the fewer barriers you put up, the easier it is to sell. It’s the power of impulse. And what’s more, downloads are exportable, worldwide with no extra hassle.
  • High Demand: More and more buyers are happy to purchase digital products and print at home. It’s convenient and easy. 
  • Low Barrier of Entry: The startup costs are low, and the profit margins are very high. 

Are Digital Downloads Profitable on Etsy?

In theory, the profit margins are obscenely high, no wonder Etsy is awash with printables of every description. 

Each listing costs $0.20 (source) and they are valid for 4 months. The transaction fee is now 6.5% plus a 3% processing fee for Etsy payments. There are

other hidden fees that may occur and I’ll reveal those at the end, but for now, that’s your basic costs. 

I’ll use a simple example. 

Let’s say, for argument’s sake, that you’ve created some digital wall art and calculate that your competitors are selling their art for about $10. When you deduct the 6.5% Etsy transaction fee it equals $9.35, less the 3% Etsy payment fee, which makes $9.06.

Now let’s take off the $0.20 listing fee, and it makes a grand total of $8.86 net profit.

You are making an 88% profit with each sale, far higher than you could expect with a physical product.

You must bear in mind that this is theoretical because nothing counts until you make the sale. There are many hurdles to overcome before someone hits the buy button.

The variables include, how well you market your product, the level of competition, how well your item is optimized for the search engine, the quality of the offering, and the list goes on.

I’ll go into more detail as we go, so keep scrolling.

How to Sell Digital Downloads on Etsy

You can’t expect to create a great digital item and expect instant sales. You have to create the things that people are actually searching for, and buying, to have any hope of success. Even then, your competition will be fierce. With that in mind let’s cover the basic process of setting up your Etsy business.

1. Do Your Market Research

Before you do anything you must research the market and see if your ideas have any viable traction. It all starts by searching for the ideas you have in mind and seeing what turns up. What is the competition like? Make a note of the prices and read the reviews.

You can see the products that are trending right now on Etsy Trends or use tools such as Marmalead or Sale Samurai

Researching the market thoroughly before committing the considerable time it will take to establish sales, will ensure that your digital product has the highest chance of success.

2. Make Your Digital Design

Midjourney and Other AI Generators

Until recently, you were required to have decent art and design skills to compete on the Etsy marketplace or be prepared to buy digital designs from third-party sellers. Now there is Midjourney and all the other AI programs that are popping up in the gold rush. 

Is AI the answer for the unskilled masses? Time will tell, but I wouldn’t bet on it just yet. I’ve played around with some tools, and I know enough to realize that the results are only as good as the prompts, and even then, most of the regurgitated imagery is junk. 

Not only that, there is such a flood of generic, copycat garbage appearing on these marketplaces, that the rules are beginning to change and fees are going up. Redbubble and Teemill have recently introduced new fees for sellers. With luck, it will squeeze out the crap flooding their platforms.

Software and Design Platforms

If you’re a beginner, and reluctant to invest too much there are free tools and software such as Canva, which is an online graphic design tool with a very generous free plan, and Gimp, the open-source image editor in place of Adobe Photoshop and Illustrator.

Did you know that first-time buyers on Udemy get a massive discount? Check out the prices and see if I’m right

If you own an iPad, you can create almost any graphic on the Procreate app. It’s currently a one-time fee of only $12.99. It’s a no-brainer.

Remember, the quality of your digital product is paramount. Your art or design must visually grab the attention of the viewer in a very crowded space. Quality and presentation really matter.

If your skills are lacking, or you’re taking too long, consider using premade designs, or get some tuition.

This is a very popular Domestika course that covers the basics of Procreate. I took it myself and it’s so easy to follow.

3. How to Set Your Price

Setting the right price for your digital art can be tricky. You can’t consider the time and effort you’ve put into creating your product, because no one will pay you the added premium.

You will have to match the rates for similar items. Sorry, but that’s how the market works. No one knows you and no one really cares.

I watched a Youtube video recently by William Lee (scroll down and watch), he’s well qualified to dissect the numbers, and suggests that the top sellers on Etsy list their items for $20 or less. This indicates that the average Etsy buyer is not prepared to spend much money. Good to know.

There is little scope for adding value. You can add pages to a book or sell products as a bundle, or offer your files in different formats and in the case of wall art. multiple standard frame sizes.

Your prices can’t be much higher than the rest because buyers will see the cheaper items and check them out first.

This post is related but concerns physical prints: How to Price Art Prints: A Practical Guide For Beginners

Set Up Your Etsy Store

First things first, you’ll need to set up your Etsy shop. Opening an Etsy store is straightforward but it’s even better to follow proven experts.

Ali and Sumner Hobart have a very popular course with great reviews

Here’s a quick guide to help you get started:

1. Account Setup

  • Create an Etsy account. Go to Etsy.com and tap the “Register” button at the top right
  • Add a profile picture and bio to introduce yourself to the Etsy community

2. Setting Shop Preferences

  • Select your shop’s default language for your listings. This is fixed and can’t be changed later, only translated.
  • Choose your shop’s country. This will help Etsy to present your products
  • Pick the currency. This is important. You need to avoid currency conversion fees.

3. Choose a Shop Name

  • Your shop name should be between 4-20 characters long
  • All one word, no spaces or special characters
  • Do not copy other members or infringe trademarks
  • Don’t be too specific, use general terms that will allow you to change
  • Your name must be memorable and easy to spell

4. Add Your Listings

  • Optional. You can do it later.

5. Connect Your Bank Account 

  • Fill in your personal details
  • Select the country where your bank is located. 
  • Enter your bank details and verify your information. Sellers outside the US will have a token deposit sent to your account.
  • Tap ” Save and Continue”
  • Add your credit or debit card.
  • Tap “Open your shop”

Etsy payments are the common method of payment. You will incur fees, Etsy doesn’t like telling you what they are, you have to dig for the info

  • USA  3% + 0.25 USD
  • UK 4% + 0.20 GBP
  • EU 4% + 0.30 EUR
  • CAN 3% + 0.25 CAD Domestic
  • CAN 4% + 0.25 CAD International
  • AUS 3% + 0.25 AUD Domestic
  • AUS 4% + 0.25 AUD International

6. Set up two-factor authentication

  • Via an authenticator App (Apple Store or Google Play)
  • SMS
  • Phonecall

7. Set Up Your Storefront

  • Add a banner. You have two choices, mini – 1200 x 160px, and big – 1600 x 400px. Find it under “Shop Manager” > Sales Channels > Your Shop name with the pencil icon. 
  • Upload a clear, sharp photograph that represents your brand and attracts the eye. Alternatively, select “None” and skip it.
  • Add a shop announcement and welcome your visitors to your shop
  • Add a Photo of yourself or a logo. Tap the camera icon. It’s under your name at the top right 500 x 500px
  • Tap “choose file” and upload your image. You can come back to this anytime.
  • Add an about section. Craft an enticing bio and tell your story, tell visitors what you do, and your mission. Add photos and keep it authentic.
  • Add your shop info, including shop policies and any delivery details. Make buyers aware that they are buying a digital product. It’s not advisable to offer returns for digital products.

8. Add Your Shop Listings

  • Tap ‘Listings’ or ‘Your Shop’ 
  • Tap ‘Add a Listing’
  • Choose ‘Add a Photo’ and add your image files. They can only be JPG, GIF, or PNG files. The shortest side should be 2000px at 72DPI
  • Add your thumbnail image. The first image in a listing is the thumbnail. List a square or horizontal image 4:3 ratio.
  • Add the details. Add a title, about section, and category
  • Set a renewal date or leave it on the default auto-renew after 4 months

9. Describe Your Listing

  • First of all, select your item type as Digital.
  • Write a clear and detailed keyword-rich description in a positive natural style.
  • Use storytelling to evoke an emotional response
  • Highlight the benefits over features
  • Write in short paragraphs and sentences using bullet points and simple English
  • End with a call to action
  • You can add a description, item type (select digital), and optional information like tags, materials, and whether the item is customizable.

10. Add Your Digital Files

  • You can add up to 5 separate files
  • The maximum size for each file is 20MB
  • Etsy supports 18 file types as downloads including JPG, PDF, and PNG,
  • Ensure the file names are logical and make sense. They will be visible to the buyer.
  • Add a thank you note to the buyer with any advice you may wish to add

11. Add Your Price

  • Add your price after having assessed the average price set by your competitors
  • Now have a cup of tea

5 Ways to Market Your Digital Products

Online marketing is a huge subject so this is a summary of some of the most useful approaches you can take.

Search Engine Optimization

SEO is your number one priority on Etsy. You must use relevant and targeted keywords in your product titles, your descriptions, and your tags to increase your visibility in the search results. Think about how your customer would search for your item. Marmalead is a very popular tool

Social Media

Leverage social media and direct your followers to your listings. Promote your products on social media platforms such as Instagram, Pinterest, and Facebook. Share your images run promos, and engage with people. Follow other people and comment.

You’ll find these interesting:

Join Facebook groups and forums like Quora and Reddit. Be proactive and seek an audience.

Etsy Ads

It’s worth experimenting with paid Etsy Ads to appear higher in the search results. Ads help you to reach a wider audience quickly.

Email Marketing

Building a personal brand is not so easy on Etsy, 60% of buyers one time visitors so it’s vital to capture emails where and when you can. Your digital product is a golden opportunity. Offer an incentive to join your list. Include a bonus within your download in return for a subscription.

You can save money with this huge bundle of Digital Marketing courses by Robin and Jasper on Udemy.

Blogging

Having a blog and creating content opens up another source of potential traffic. Write about things that relate to your product and add links to your Etsy shop.

Having your own website gives you the authority in your field, acts as a hub for repeat customers, and is a great opportunity to send traffic to your Etsy shop. This in turn will signal the Etsy algorithm to rank your listings higher.

At the very least consider writing articles on a blogging platform such as Medium. Medium is an authority site that can leapfrog your articles to the top of searches on Google.

You should read these posts about my experiences with blogging:

Digital Product Ideas for Artists and Designers

There are more types of digital products than you imagine. The list is so long that I’ll restrict my suggestions to only those that relate to artists and designers.

  • Printable Wall Art: Buyers can buy your files to print their images at home or at a print shop. Increase your sales by offering standard sizes to fit ready-made frames.
  • Digital Stickers: Stickers are very popular. Sell as a download or as a print-on-demand offering.
  • Color Palettes: Sell bundles of color palettes. Anyone working with color will appreciate the convenience of having great color combinations in their library.
  • Digital Coloring Books: These are huge and not just for kids. There is high demand for adult coloring pages. Think along the lines of niche interests, animals are popular, mindfulness, and relaxation.
  • Product Mockups: All art needs visual context. Why not sell mockups to artists who need to showcase their art and designs? Why sell the product when you can sell the mockup for more profit?
  • Ebooks: If you want to be taken seriously there is nothing to beat writing a book. Sell your knowledge. And remember to add plenty of links back to your products and to affiliates to gain extra income.
  • Digital Presets: Artists can create and sell bundles of their own brushes for use in Procreate or Photoshop. Photographers can sell Lightroom presets.
  • Clip Art Collections: Artists and illustrators can create bundles of simple themed clip art for projects such as scrapbooking, card making, invitations, worksheets, websites, stencils, planners, and the list goes on and on.
  • Art Tutorials: If you have a particular skill why not sell it as a digital product? You’re not confined to ebooks, you can sell videos too.

This is just the tip of the iceberg. Find a niche and double down on one theme at a time. Don’t spread yourself too thin. Dominate a space.

You can buy art mockups on Creative Market you should check it out.

When you brainstorm ideas it soon becomes apparent that the potential is endless.

What about these 5 printable ideas for nurseries:

  1. Fairy Tale Wall Art
  2. Alphabet Poster
  3. Childs Growth Charts
  4. Nursery Rhyme Posters
  5. Animals of the World Map

Who Uses Etsy?

If you know your market you are halfway to success. One thing stands out, the majority of users are female. Good to know if you are targeting a male audience.

Women are the main users of Etsy

According to Similarweb over half the buyers are female. StartupBonsai claims that 89% of sellers are female and Statista claims that number to be 79%. Similar discrepancies appear on other sites but the message is clear, Etsy is primarily a female-to-female platform.

What’s more, the vast majority of buyers are under 44, the demographic most likely to spend on children, homes, and weddings (source).

I can’t back this up with proof, but in my experience, selling my own art prints for over 20 years (not Etsy), the majority of my customers were women. The stats ring true as far as I’m concerned.

Where do Etsy buyers live?

Over half the audience is in the United States. According to Similarweb, it’s the 29th largest US website and the 62nd largest in the world. Etsy is a giant.

Similarweb geographic indicating the distribution of Etsy traffic by country
Distribution of Etsy traffic by country

As you can see the markets are mainly English speaking with a significant presence in Germany. This matters much more if you are exporting physical items, but it’s good to know where your audience lives so you can cater to their particular needs.

Is Selling Digital Downloads Worth it on Etsy?

Etsy has 89.4 million buyers and 5.4 million active sellers as of the end 2022. If you want more stats, listen to William Lee who breaks it down wonderfully.

If you haven’t got the 15 mins to spare, he highlights the difficulties sellers have succeeding on the platform.

For instance, Etsy has 5.4 million sellers and they’re defined as those who sold an item or incurred a bill charge in the last 12 months. Yet, he calculates, the average seller only made gross sales of $2,169 in 2022.

The figures are distorted by averaging the enormous profits of the minority of top-performing sellers and the meager profits, if any, of the poorest-performing. As always, the market is dominated by big players, most of whom have had a store for many years.

The bottom line, posting a few items amongst the 100s of millions of listings, is not likely to generate revenue. Sellers must expect to list hundreds of items to see any return.

It’s sobering stuff, but it’s not a reason to abandon the idea completely. It is however a wake-up call to the reality of selling on Etsy and puts things into perspective. You’re not going to see riches overnight.

On the plus side, digital downloads have a huge profit margin so you need fewer sales, and it’s easy to offer multiple versions of the same product. You can have hundreds of items for sale in a relatively short time.

Selling Digital Downloads on Etsy: Final Thoughts

Selling digital downloads on Etsy has the potential to generate an income if you are persistent, are prepared to put in the time, and think in the long term.

Selling downloads is a viable side hustle that can provide an additional income stream if you target the right audience, use the best keywords, and offer quality products at the right price.

Only you can determine the amount of time and effort you are prepared to put in. Proactive sellers who market their items will see better results. You have to find the right balance.

I hope this has helped.

Now before you leave, keep scrolling down for a moment in case you miss something…


This is my digital download. I wrote it during the lockdown when all work stopped. I show you how I sold prints for a living for over 20 years. I think it will interest you.

If You Want to Sell Your Art

Check this out!

Psst…it’s only $12.99!


Check out these other posts related to online selling:


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This course is popular on Domestika, check it out and see for yourself.


The artist and Author Kevin Hayler


Hi, my name’s Kevin and I’m a real person!
I’ve been selling my wildlife art and traveling the world for over 20 years, and if that sounds too good to be true, I’ve done it all without social media, art school, or galleries!
I can show you how to do it. You’ll find a wealth of info on my site, about selling art, drawing tips, lifestyle, reviews, travel, my portfolio, and more. Enjoy