A Beginner’s Guide To Selling Digital Products Online

etsy digital products etsy for beginners Mar 29, 2024

Selling digital products or digital downloads online is a great way to earn passive income. And when you’re just starting out, it can certainly feel overwhelming. Here is a beginner’s guide to selling profitable digital products online, including:

  • What digital products are
  • The benefits of selling digital products
  • Which platform is best for selling digital products
  • What type of digital products you should sell
  • How to do market research and find your niche


What Are Digital Products?

Digital products or digital downloads are non-physical products that are purchased and received entirely online, without any need for shipment. This includes eBooks, templates, digital art, and printables.

What Are The Benefits Of Selling Digital Products?

  1. No physical inventory

Unlike physical products where you need a place to keep your stock, digital products are all based online, so require no physical space to house your products. This also essentially means your stock is unlimited!

  1. Low overhead costs

Since there is no need for shipping, you don't have to think about the manufacturing cost, the shipping, any rental fees and everything related to that.

  1. Global reach

Whenever you create a digital download, you can sell it to anyone around the world who can access the website you’re selling it on, whereas it’s a lot harder to do this with physical products.

  1. Scalability

If you can make one passive sale, you can make 100 and lots more! Because of the unlimited stock and low costs of selling digital products, there is so much opportunity for growth. For example, you could keep adding products to your shop to reach a wider customer base, or create multiple shops in different categories.

  1. Flexibility

All you need is a laptop and a good internet connection to start and run your digital product shops, which is the best part of it!

What Is The Best Platform To Sell Digital Products?

There are a lot of different platforms that people are talking about such as Gumroad or Shopify, but I’ve personally found that Etsy is the best choice, especially for beginners. I’ll now go over a few reasons why!

Why Etsy over other platforms?

  1. Existing customer base

Etsy already has tens of millions of active shoppers searching for specific products on the platform. So if you can understand the market and what products are being searched most often, you can create profitable items that will give you the best chance of success.

  1. You don’t need an audience to get started

Because of the huge existing customer base, you can use the power of SEO (Search Engine Optimization) to attract potential customers to your products. If you can understand what people are looking for, you can utilize targeted keywords in your products to drive organic traffic to your shop.

💡 Search Engine Optimization (or SEO) is the process of improving the visibility of your shop and product listings in search results such as Google and Etsy search. You can do this by using targeted keywords throughout your shop and product details.

  1. It is very user-friendly

Etsy’s dashboards are super easy to use! They have analytic tools to help you track your business, including your conversion rates so you can continue to improve your shop. They also have an Etsy Seller app which is great for when you’re out and about.

What Types Of Digital Products Should You Sell?

You want to do some research to find products that:

  1. Align with your existing skillsets; and
  2. Have a high demand but low saturation/competition

Some examples include:

  • Social media templates
  • Financial templates
  • Resume templates
  • Wedding templates

You might also like to check out my 100 profitable digital products list for even more ideas and easy digital products to sell here.

💡 No matter which niche you decide to dive into, the key principles and process of building your shop will remain the same! Check out my completely free masterclass here to learn the 4-step method I use to build all my Etsy shops!

How To Do Market Research On Etsy

This is the most important part when you’re just starting to sell digital downloads. The worst thing that can happen is that you spend weeks building your products, to then realize that the category you want to delve into is too saturated and not worth selling in. So make sure you take your time at the start to do in-depth research on your potential niches!

There are 2 main objectives when doing market research:

1) Identify gaps within niches

Once you have a list of potential categories, you want to identify any gaps that you can fill. This could be a different perspective, style, theme, or an additional feature to the product to make you stand out from your competitors.

Putting your own spin on a product will enable you to have a unique selling proposition (or USP). When you do something differently and provide extra value, potential customers will be more likely to buy from you than the other already established shops.

2) Understand your customer’s needs

Before you get started, you want to fully understand what your customers are looking for. One of the easiest ways to do this is to look through competitor reviews. Here you can learn a lot about what customers like, dislike, or would like to see improved. This is where you learn to not make the same mistakes as other sellers and are able to come in from a unique viewpoint to solve those problems for the customers. Then you can provide an even better product for them!

💡 The market research phase is a super important part to building a successful Etsy shop. When you know there is a clear demand for the product, it also gives you more motivation and confidence that you can do well in the niche!

Learn More

Hopefully, you’ve now gained a better understanding of what it takes to start selling digital products online, especially on Etsy. If you’d like to learn more, don’t forget to check out my free masterclass here where I walk you through the step-by-step of how to sell digital products on Etsy.

Or if you want to learn what trending niches you should AVOID when selling on Etsy, click here.

And if you’d like to check out my full YouTube video for more visual explanations of everything I’ve discussed above, check out my video here!


Want to start a profitable Etsy shop but don't know where to begin? 

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