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I’m excited to share with you guys the ultimate guide to selling digital downloads on Etsy. Have you thought about selling digital downloads but don’t know how to start? This Etsy tutorial will surely help you get started the right way.

 In my first year on Etsy, I made over $21K selling digital prints. In this post, I will reveal all of the tactics and tools that I’m currently using to grow my sales, drive traffic to my shop, and things I have learned throughout the course of my first year.

Before I proceed with the tutorial, I do want to make it clear, Etsy SUCCESS does not happen overnight. You will need to do countless hours of research, optimize your profile and shop, create products to sell, design a logo, brand your store, build listings, market your shop, and all of this before making a sell. If you have not done so yet join Etsy today and receive 40 FREE listings. Click here to get the free listings.

Let’s go ahead and dive into the tutorial.

This blog post is all about the Ultimate Guide to Selling Digital Downloads on Etsy.

Home > Etsy Biz > The Ultimate Guide to Selling Digital Downloads on Etsy

DISCLOSURE: This is not a sponsored post. I may receive a commission through my links if you decide to make purchases at no cost for yourself! Check out our disclaimer for more info on how it works.

What exactly is a digital download?

A digital download is an electronic form of a document or file that the buyer will receive without receiving a physical copy. The buyer will receive an electronic copy of the file which they can print from home or at their local printing shop.  

Defining Your Niche? 

Before you open your Etsy shop, it’s essential to identify your niche. I recommend choosing a niche that will set you apart from other Etsy shops and that you’re passionate about. If you aren’t passionate about your niche, you will most likely quit and not put the required effort needed to build a thriving successful shop. 

Things to keep in mind when defining your niche:

• Make sure to pick a niche that has a high demand, not too broad, or too narrow.
• Are you tackling a competitive niche but you don’t have sufficient time to dedicate to it?
• Treat your online business like any other business.
• Invest all the necessary time to find the best niche concept for your Etsy shop.
• Research other Etsy shops that have been open for a minimum of one year and measured their success.

If you’re having a hard time deciding on a niche find inspiration using Alura. This is a tool that you can track top Etsy sellers in every category, do market and product research and so much.

What tools to use to create a digital file? 

The next step after choosing the niche for your Etsy shop is finding a program or software to make your digital files. What tools do you plan to use to create your design? I personally use Adobe Photoshop. I am by no means a graphic designer and before Etsy any designs that I needed for my blog or social media platforms,  I was paying others to do for me. 

The best thing I did was take the risk with Adobe Photoshop and taught myself how to use the program. Adobe Photoshop is a graphics editing program by Adobe and you can pretty much use it for any kind of image editing, touching up photos, creating graphics, drawings, and much more.  I highly recommend doing the free trial online. 

Here is a list of other tools you can use to create your design:

• Adobe Illustrator: is a vector graphics editor developed by Adobe. You can download a free trial for seven days. 
• Canva: You can create beautiful designs with the drag and drop feature without having any experience. Canva is simple to use and the best part is FREE. 
• PicMonkey: Create beautiful photos, logos, social media graphics, and much more with PicMonkey powerful photo editing and graphic design software. 
• Adobe Acrobat Reader DC:  Allow you to make editable PDF files that you can sell on Etsy. Editable files are a great way to make passive income on Etsy. 
• Pixlr:  The robust browser photo editor is great for editing images. No download is required and it’s 100% free. . 

These are some of my favorite tools to use when creating a digital download but keep in mind there are tons of software and online programs you can use. 

What to consider when opening up your Etsy shop? 

1. Naming Your Etsy Shop:  You’ll need to come up with a creative name for the shop. You’re joining the 1.7 million stores that are already on Etsy so your shop name might be taken. You can try adding words such as “shop” or “boutique” to the end of your desired name.

Make sure your shop name matches your niche.  For example, if you plan to sell Wedding Designs you can name your shop, “Wedding Designs Boutique” or “Wedding Designs by Mila.” I personally prefer adding the keywords to my shop name so when potential customers are browsing the Etsy feed they will be tempted to click on my name since it matches what they are looking for. For instance, if you are selling stationery items, a great name would be, “Everything Stationery.”

The sign-up process to open your shop can be pretty long so make sure to take your time and don’t rush to open the store until you have chosen a wise name and uploaded at least one listing. Before you can even open up your Etsy shop you will need to follow the Quickstart-Etsy Checklist.

Related post: 100+ Creative Shop Name Ideas for Etsy Sellers

2. Etsy Banner: You will want to differentiate your shop by adding an Etsy Banner. It’s not a deal-breaker, by any means if you don’t have a banner. I personally like to incorporate a banner for branding purposes. Also, keep in mind that your banner should tie into the aesthetics of your shop. I have also seen top stores that change their Etsy banner based on the seasons and specials. And other stores use the banners as a way to showcase their handmade products or digital prints.

If you’re in need of a banner, you can find many stores on Etsy that sell already pre-made banners. You can also create your own banners using free tools such as Canva.com

3. About Us Page:  The about us page is one of the most significant components of your Etsy shop. The about should include a brief description of your store, products, and services. The about us page helps build credibility and increases trust with your customers.  In the about us section, you can even upload pictures of your studio to showcase your workspace. The about me page and pictures will help create a story behind your business.

It can also lead to unexpected collaborations and opportunities including press coverage. Many shops have been featured on sites such as BuzzFeed as a result of having their shop optimized and having an awesome about us page.

The about us section is divided into different sections:

• Shop Story: How you got started?
• Story Headline: Sum up your shop in one sentence.
• Story: You have up to 5,000 characters to share how your business was founded.
• Shop Video: Many Etsy sellers upload videos of their workspace. You can be creative as you like.
• Photos: You can upload pictures of your workspace or products.
• Shop Members: You can list anyone directly employed by you with helping you run the shop.
• Production Partners: You can list production partners who help physically produce your items but who are not a part of your Etsy shop.
• Links: You can add a link to your website/blog and social media platforms.

4. SEO (Search Engine Optimization):   If you’re committed to building a successful Etsy business, you have to focus on finding profitable keywords by utilizing SEO. What does SEO stand for? Search engine optimization. If you want your product or services to be found by the Etsy search engine and Google, then you must spend the necessary time researching keywords.

eRank is a great way tool to help you find low competition keywords which will in return be a high return on your investment and time. The most significant mistake you can make is trying to optimize your store with keywords that have too much competition.

Pro Tip: A rule of thumb is to find keywords with low competition but high searches. Focus on search volume of at least 1,000 and 30K or less in competition.

How to research keywords using eRank:
1. Log in to eRank
2. Click on “Tools” on the left-hand side of the menu, then select “Keyword Tool.”
3. Type the keyword you’re researching for example, “Wedding Invitations” and click on “Get Keyword Ideas.”
4. The eRank Keyword Tool gives you access to alternative keyword and tag ideas for your listings.

eRank uses color-coding to help users determine how much competition each keyword has. You can watch my tutorial on how to find a profitable keyword below.

5. Etsy Seller Handbook: Make sure to get yourself familiarized with Etsy by reading their seller handbook which gives you the best practices for successfully running your Etsy shop. I also suggest joining the Etsy success newsletter. You will receive weekly tips from top Etsy sellers on how to grow your shop.

The handbook is divided into different sections:

• Photography
• Shipping
• Legal
• Productivity
• Community
• Getting found
• Branding and marketing
• Prices, taxes, and finance
• Growth strategies
• Seasonal tips

Check out these top 10 tips to increase your Etsy sales

What to consider when selling digital downloads? 

1. Storage: Consider buying a hard drive for your computer since you will have a lot of digital files and it will start eating up the memory of your computer and slowing it down. I  got my hard drive at Amazon and it was under $100 for 1 TB. It’s up to you to decide which factors are most important to your needs. I personally wanted a hard drive that had a large memory for all my files and something I can carry with me everywhere. I like having the convenience of working anywhere.

2. Dropbox:  You’ll need to find a storage service large enough for files that are too big to upload on Etsy. I currently use Dropbox since I can share my files with any user on any device. Dropbox offers 2GB of cloud storage for free and there is a monthly subscription if you require more storage. However, 2GB is sufficient to get started.

:PRO tip: When sending clients to download their files on Dropbox or any storage service include an instructional guide. Many people have never used these types of services and will not know how to download the file. Make sure to clearly specify that the file will need to be downloaded from a desktop or computer. (It does not work on mobile devices)

3. What to sell on Etsy? You have such a large selection of digital items that you can sell on Etsy.

Here is a list of the most common items that are sold on Etsy for digital downloads to help you get inspired:

• Wedding Invites
• Clipart
• Photography
• Party Decorations
• Coloring Pages
• Printable Artwork
• Collage Sheets
• Iron on Transfers
• Gift Tags
• Printable Stickers
• Printable Wine Labels
• Stationery Items
• Boxes & Packaging
• Editable Flyers
• Blog or Logo Designs
• Scrapbooking Papers
• Printable Planners
• Patterns
• Birthday Invite

4. Pricing your digital download: Another important factor to consider is pricing your digital downloads correctly. The price for a digital download versus an actual product that was made by materials and handmade will be a bit cheaper. The nice thing about digital download is you will spend the initial time on the front end creating the product but you can sell it forever and unlimited times. That’s one of the reasons why selling digital downloads is a great source of passive income.

Here’s a step-by-step formula that takes into account material costs, labor, platform fees, and profit margin:

Pricing Formula for Etsy Sellers

Price = (Materials + Labor + Etsy Fees + Overhead Costs) × (1 + Profit Margin)

Here’s how to break down each component:

1. Materials: This is the cost of all raw materials needed to make the product. Add up all costs per item, including small materials like packaging, tags, or ribbons. [ \text{Materials} = \text{cost of all materials used per item} ]
2. Labor: Estimate the time it takes to make one item, then decide on an hourly rate for your work. Multiply the time by your hourly rate. [ \text{Labor} = \text{time (in hours) per item} \times \text{hourly rate} ]
3. Etsy Fees: Etsy charges several fees, including a 6.5% transaction fee and a $0.20 listing fee. You may also want to account for payment processing fees, which are typically around 3% + $0.25 per sale. [ \text{Etsy Fees} = (\text{transaction fee} + \text{payment processing fee} + \text{listing fee}) ]
4. Overhead Costs: These are the indirect costs of running your business, like shipping supplies, workspace rent, utilities, or marketing. Divide the monthly overhead by the number of items you sell per month to estimate overhead per item. [ \text{Overhead Costs} = \frac{\text{monthly overhead costs}}{\text{average monthly sales volume}} ]
5. Profit Margin: Determine the percentage you want to earn as profit. Common profit margins range from 20-40%, depending on your market and competitiveness. A 30% profit margin, for example, would mean setting a multiplier of 1.30 in the formula.

---

Example Calculation

Let’s say:

• Materials: $5
• Labor: $10 (at an hourly rate of $20, with 0.5 hours of work)
• Etsy Fees: 6.5% transaction fee + 3% processing fee + $0.20 listing fee
• Overhead Costs: $2
• Profit Margin: 30%

Plugging it into the formula:

1. Materials + Labor + Overhead: $5 + $10 + $2 = $17
2. Etsy Fees (on final price): Estimate around 10% for simplicity (Etsy takes 6.5%, and then add payment processing and listing fees).
3. Final price with 30% profit margin: [
   \text{Price} = 17 \times 1.30 = \text{approximately $22.10}
   ]

Adjustments might be necessary based on your niche, customer base, and competitor prices, but this formula will give you a solid foundation for sustainable pricing.

Learn how to properly calculate Etsy fees:

5. Avoid Infringement notice or getting your store shut down: You’ll see many stores on Etsy that are selling trademark items that they are not licensed to sell. For instance, many shops sell Disney items. They use the word Disney on their listing title, description, and even on their designs. This is a big NO-NO unless you have a license to use it.  If you get caught infringing another’s intellectual property (IP) it can be costly, not to mention you can have your Etsy store shut down.

If you’re creating a new design for your store and don’t know if a common phrase is a trademark it’s wise if you check with uspto.gov/trademarks search system to make sure that you are not violating any intellectual property.

I’ve also created a short tutorial on how to check for a trademark, copyrights, or patent. Click below to watch the video!

6. License to sell: Make sure to take the necessary time to make sure you have permission to use graphics or fonts for re-selling purposes in your design.  Anytime you purchase clip art or fonts read the terms and conditions to make sure that you can actually use them on your design for commercial purposes.

A great way to avoid any confusion is getting your graphics, fonts, or any other designs in markets sites such as:

Creative Market: You can buy handcrafted designs like vectors, patterns, icons, graphics, photoshop brushes, fonts, and much more with a built-in license.

Explore over 580,000 graphics to use for social media, e-commerce, cards, & webpages. These graphics sets feature apparel mockups, logos, icons, & themed graphic elements for web & print projects.

The Hungry JPEG: is another marketplace that offers users thousand of premium graphic design resources available for instant download. For example they amazingly cheap fonts, graphics packs, design templates and so much more, all for just $1 per product. As always, commercial licenses are included as standard. Check them out by clicking here!

The CraftBundles:  offer a wide range of SVG images and DFX cutting files perfect for any craft graphics project.

7. Make it easy to use: Make sure to include an instructional guide with any information the customer might need after downloading the file.

For instance, I sell editable files using Adobe Acrobat Reader. I have listed everything the customer needs to know about the file on the listing description. The issue is many people don’t read the listing description and end up messaging you. Due to receiving so many messages, I now include an instruction guide with exactly what they have to do to edit the guide. This will help reduce messages and unnecessary bad reviews.

8. Search Results: Keep in mind when you publish a listing it usually appears in the search results within minutes, however from time to time it can take up to 24 hours for listings to be indexed into search results.

9. Display your design: Another thing you will need to get is what they call a “mock-up” to display your design. You can visit Creative Market to find all sorts of mockups for your design.

You will be able to all types of mockups for your artwork, fonts, wedding invites, birthday invites, and much more!

Explore more than 3,900 custom scene creators to design unique layouts with realistic objects and backgrounds.

10. What files can you upload?  Etsy allows you to upload up to five digital files. The largest size for each upload is 20MB. You can compress your files into zip files to be able to attach more digital downloads.

Etsy currently supports the following files:

Audio

• .mpeg
• .mp3

Image

• .gif
• .jpeg
• .png
• .tiff
• .bmp
• .pdf

Text

• .tx

11. Write a killer description: The listing description plays a big role in whether you will make a sale or not.  The next step in this tutorial is writing a killer item description.  You will need to describe precisely what you’re selling. For instance, a lot of my wedding signs I display my artwork with a mock-up of an easel.

I always make sure to mention in the listing description, props and frames are not included with the purchase. Even though I have this clearly stated in the description, I still receive messages asking me if the easel comes with the sign.

This will happen pretty often as part of selling online so don’t get frustrated. It can be confusing sometimes when buyers looked at the mock-up of the product and assumed they would get an easel, frame, or what’s in the picture we used to style the image.

I break down my listing into sections to clearly describe the product, what is included, how they will receive their digital product, our mission, printing process, refunds and exchanges, and terms of use.

Here is a sample of one of my listing descriptions:

► Description ◄

Polaroid Guestbook Sign.

*No physical product will be shipped, frame and props are not included.*

► What’s Included ◄

You’ll receive 4 different sizes of the print:

*4”x6” inches, 300 DPI, High-Resolution, in JPG format

*5”x7”  inches, 300 DPI, High-Resolution, in JPG format

*8”x10”  inches, 300 DPI, High-Resolution, in JPG format

*11”x14”  inches, 300 DPI, High-Resolution, in JPG format

Each JPG file is high-resolution (300 DPI), which will get you clean and clear beautiful prints.

► How to Order  ◄

1. Simply purchase the listing
2. After your payment has been cleared you can download your instant download under purchases/reviews
3. It’s that simple!

►Our Mission◄

We take pride in creating beautiful prints at an affordable price. If you need something custom made feel free to reach out to us and we will love to create a unique design for you.

►Printing Process ◄

The final project of the artwork will be determined by the quality of the printer and either the paper or card stock that you choose.  Please keep in mind that colors on a monitor may vary slightly from how they appear in person or how they display one a viewing device to another due to the color calibration of your device or monitor.  For the most visually stunning final results, we recommend printing the pages using high-quality paper, such as card stock.

Please note, this listing is for an instant download, no print will be mailed.

*You can print at home, print shop, or online service such as the following:

*Vista Print

*Shutterfly

*Snapfish

An unlimited amount of copies can be made.

► Refunds and Exchanges ◄

Every digital and instant download purchase is non-refundable, as there is no way for me to tell whether you have printed the design.  If you have any questions or concerns about your order, please feel free to reach out to us anytime.

► Terms of Use ◄

This artwork is copyrighted by Nancy Badillo Boutique. This purchase is strictly for non-commercial, personal use only. You may print and design in your home, business, or a public place but may not resell, reproduce, distribute by electronic means or profit in any way from the design.

Pro Tip: It’s important that you include any question the buyer might ask in the listing description. Due to the nature of selling digital downloads and a majority of people don’t read, make sure that you clearly state in the listing description that they are purchasing a digital download or instant download, and no physical item will be shipped to them. The biggest con of selling digital downloads is that people do not read what they’re buying then they message you upset that they have not received the item through the mail or open a case against your store.

If you cover all your bases even if the buyer opens a case against your store, Etsy will have your back and the case will eventually be closed.

12. Automatic Message: Lastly add a thank you message on your digital file section. After the buyer purchases from your shop, the message will appear on Etsy on the purchases and reviews section and they will also receive an email notification. I personally use the automated message to thank them for their business, I give instructions on how to download their digital files and request a review from them.

You can add the automated message by following these breadcrumbs: Settings > Info & Appearance > Message to buyers for digital downloads.

Conclusion: The Ultimate Guide to Selling Digital Downloads on Etsy.

I hope this Etsy tutorial comes in handy for selling digital downloads.  Make sure to subscribe to my blog to receive delightful emails on Etsy tutorials and how to build a thriving business! Leave any comments or questions you may have below!

Ready to Start or Scale Your Etsy Business?

If you’re considering starting your own Etsy store but unsure about which products to offer, my signature course, the Etsy Mastery Course, is your ultimate guide. Learn how to start, manage, and scale your Etsy business to a full-time income. 

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