The Benefits of Selling Digital Products on Etsy

5 déc. 2023

This image illustrates a blog post discussing the benefits of selling digital product on Etsy rather than physical product, based on my personal experience.
This image illustrates a blog post discussing the benefits of selling digital product on Etsy rather than physical product, based on my personal experience.

Introduction to etsy digital downloads

I know Etsy sellers who have found success selling digital downloads and others selling physical products. However, there are fundamental differences between the two. When I started selling physical products with my first store, it didn't go as well as expected, and I noticed significant differences with my second and third stores (where I sell digital products). So, based on my own experience, I highly recommend new sellers to focus on selling digital downloads rather than physical products.

Let me explain why selling digital product on Etsy is a good idea:

Create digital downloads for passive income

Selling physical products requires more preparation and effort for each product listing. With digital products, once a buyer makes a purchase, they can instantly download and use the product. When you sell digital products, you don't have to worry about shipping, which also means you are more likely to receive 5-star reviews. Customers are generally less likely to be dissatisfied.

Also, on platforms like Etsy, buyers know they can easily get a refund. That's why some people take advantage by claiming the item never arrived, for example, and you will have to refund them. But with digital products, this is not possible.

Higher profit margin

Unlike physical products, you have more control over prices with digital products. You can set your own prices and have greater flexibility in determining your margins.

Additionally, you don't have to worry about stock levels as there is no limit to the number of digital files you can sell. When I started selling on Etsy, I opened a shop to sell t-shirts and sweatshirts (POD shop). After just 4 months of experience, the price of Printify (my supplier) increased not once, but twice, due to inflation. With digital products, you don't really have expenses, maybe just a few subscriptions, nothing significant. All it takes is time to create the products. So, unless you are a craftsman or an artist selling handmade physical products, selling digital products offers you much more flexibility.

Reduced risk of receiving negative reviews

Digital products are less likely to receive negative reviews than physical products. Delivery delays, damaged goods, and supplier issues are more common with physical products. Digital products, by their nature, eliminate these problems, allowing for a better customer experience and more positive reviews.

When I opened my first Etsy shop, I received a 1-star review after only my second sale. Why? Well, it turns out that the Printify print was missed... With my second Etsy shop, I also encountered a few issues here and there. Like a link that doesn't work or a file error.

But all of this is very easy to fix! Furthermore, when I help my customers and find quick solutions for them, they often leave me glowing 5-star reviews. With physical products, when it comes to print errors or delivery issues, we simply have no control over that.

Etsy strongly protects buyers

Etsy prioritizes buyer protection, which can lead to disputes between them and sellers of physical products. Customers can file claims stating they didn’t receive items, received items not as described, or never received the item (despite having received it). Unfortunately, in the latter case, it's usually the seller who refunds. Resolving these disputes can be time-consuming and result in financial losses for the seller. Selling digital products minimizes the risk of such disputes and ensures a more secure transaction, as there is no shipping or delays involved.

No payment reserve for Etsy digital downloads

Etsy may hold payment for sales of physical products by withholding 75% of the amount until a valid tracking number is provided within 45 days.

This can lead to cash flow issues and financial management challenges for sellers, as selling physical products incurs costs. In 2023, Etsy started to set up payment reserves for many shops, even those with 7 to 8 years of experience on the platform. Some shops even received multiple payment reserves in the same year.

I received one for my third Etsy shop. However, since I also sell digital products there, it didn't affect me at all.

Easier international sales for digital downloads on Etsy

Digital products can be sold worldwide without any geographical limitations. Selling physical products internationally can be complicated due to the rules, paperwork, and specific customs fees in each country. Digital products provide an easy experience for both sellers and customers.

Personally, when I compared my first two Etsy shops, there is no comparison! Selling digital products is so much simpler and less stressful.

Conclusion for selling digital downloads

Even if you can find success with physical product sales, I believe that selling digital products offers a less risky, more passive, and less stressful approach, but it is also more competitive. In both cases, make sure to find the right niche before diving into Etsy. To achieve this, prioritize conducting thorough market research. Here are some digital product ideas you may find appealing: digital planners, digital art, Notion templates, PSD mockups...

Timing is crucial on this platform, and if you want to learn more about how to find the best niches before opening your own Etsy shop, check out this article and start selling digital products.

Thank you for taking the time to read my content! If you enjoyed it, want to start selling digital downloads and don't want to miss any posts, feel free to follow me Youtube ou X.