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10 Painful Lessons Learned in My Etsy Digital Product Journey

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Have you thought about selling something on Etsy, but don’t have the first clue about where to start? Ready to start making money selling something that generates passive income? One awesome way to do this, and a category of items that does really well on Etsy, is a digital product.

For me, I decided I wanted to use my design skills in a way that satisfied me financially and emotionally, and also become a success story that was different from the typical craft or handmade items people think of when they hear “Etsy.”

Selling digital products is one of the top ways that I generate passive income. I’ve literally made THOUSANDS of dollars in extra income each month from selling things like printables, templates, and digital downloads. Because they are digital in nature, it is a lot less hands-on than selling one-of-a-kind crafts. You can sell a digital product again and again, even while you are sleeping!

Did you know that 95% of sellers on Etsy FAIL within their first year?

I am sharing the top things I have learned so you will hopefully not become part of that statistic!

Here are the top 10 things I wish I knew before selling digital products on Etsy:

1. Be Patient

Success doesn’t happen instantly. Driving traffic to your listings takes time (and the right keywords). Try to stay focused, and motivated, and don’t be scared to put in the long hours. Your shop won’t be perfect, and that’s OK!

New sellers become very impatient when they don’t get their first sale quickly. They start wondering what they did wrong and begin wondering if Etsy is even worth it. I know I did.

The best advice I have is to just chill, be patient, and continue making great stuff. Giving up will guarantee that you never get that first sale or your first ten sales.

2. Treat This Like A Business, Not A Hobby.

If you want a business, you need to treat your Etsy shop like one. Some people may only sell on Etsy as a hobby. More power to them!

But if you are serious about making Etsy your full-time gig, here are some things to consider:

  • Start an LLC. An LLC (limited liability company) provides personal liability protection and a formal business structure. NOTE: An LLC is a type of business entity, while an S corp. is a tax classification. For full details, I recommend consulting with your account or lawyer.
  • Trademark your business name.
  • Add a copyright notice to your images. This is really helpful for digital art prints and the like. Etsy however, doesn’t recommend a watermark.

Incorporate your brand into your images. While some sellers use watermarks, we generally wouldn’t recommend them. Using watermarks makes photos unsuitable for features within Etsy (like Etsy Finds emails), and ineligible for off-site advertising programs like Google Shopping. Instead of watermarking, if you have a brand associated with your shop — whether it’s a logo, a specific font for your shop name, or a packaging style — try including it within your listing image (but not as an overlay). This way everyone will know who made the item.

How To Protect listing images, help.etsy.com
  • Have clear store policies that outline your stance on refunds or cancellations.
  • State product dimensions and disclaimers in your product listings to avoid negative feedback.
  • Keep your files organized using a system that can grow with you. Starting this right away will save a lot of headaches when you have hundreds or thousands of designs or listings. Invest in accounting spreadsheets or work with an accountant/CPA to keep your finances in order.
  • Keep your business expenses and income separate from your personal.

3. Don’t Take Things Personally

I have spent hours creating a design. Thought it was completely amazing and expected the “Best Seller” badge only to not sell a single one. Sometimes, the things you love the most are not going to be your best sellers. You have to accept this and just move on.

Continue creating high-quality items that fit the needs of your target customer.

4. Good Product Photos Are KEY

You don’t have to spend a lot to create great-looking listing photos. When I started, I used Canva for all my digital product mockups. Check out my post here for tips on using Canva. You can even use your phone to take quality shots of your items.

Etsy also offers a lot of great advice – take a look at what they have to say about listing photos here.

If it isn’t quite feasible to take photos of all of your items, using mockups is a great way to show off your item. A quick search on Etsy for “mockup” will yield thousands of results to choose from. Just remember to pick something that fits your brand style and stays cohesive with your branding.

Another resource that I use frequently is Creative Market. They have tons of graphic elements, fonts, mockups, you name it!

5. Test Your Products

Check, check, and triple-check your work. Make sure your links work. Print out a sample of your item at home (where possible). Have someone else download and test your items to see if there are any issues on a different PC or mobile device. The last thing you want is to be responding to a ton of messages or negative feedback because your item doesn’t work.

Legal terms and licenses are so important when creating and selling digital products. Don’t waste your time copying others or using content that you don’t have the right to use.

Make sure you are extra familiar with the terms of third-party design elements you may be including in your products. This means actually reading the terms of service or license agreements. I know it’s boring, but you need to make sure you stay legit or run the risk of fines or even your account being terminated.

When using fonts, make sure they are free (for commercial use) or that you have the license to use them for your type of project.

Don’t embed or send pictures if you don’t have permission to do so.

7. Protect Your Products

When selling a digital product, you cannot predict what clients will be doing with those files once downloaded. To best protect yourself, make sure you are clear on the terms of purchase and terms of use. Include these terms prominently in your listing description and FAQs. Where possible, include a copyright notice on your items.

8. Be Prepared To Deal With Copycats

Listen, this is the worst part of selling digital products online. No one wants to believe that other people would actually sell your stuff. But, it is better to be prepared in the case where you do discover copycats. Don’t get me wrong, I don’t waste my time looking for copyright infringements of my work out there because I’d never get anything else done!

It may be necessary to send a Cease and Desist Notice, and depending on the situation, report the user or website for copyright infringement. Most times, they take the content down in less than a week.

9. Be Clear And Accurate In Your Product Descriptions And Photos

I learned this lesson the hard way. Be super clear when drafting your listing description. List out any necessary skills they will need in order to be successful, whether it be software knowledge or technical skill. It also helps to include if you are providing instructions for use.

More is More! Include MORE details than you think necessary. The last thing you want is to be spending countless hours answering questions because you were not crystal clear in your description or photos.

Make sure to educate your customers on what you’re selling, exactly what they’re going to get, and what’s required of them to be able to use your product. I have found it works best to include this information in your listing photos as well. Some customers don’t bother to read your description, so it can only help to duplicate any relevant info in your photos.

10. There Will Always Be Competition – So You Need To Be Unique

When I first started, I didn’t have my own style and my items were not very unique. Try as I might, my designs always looked like someone else’s because that is what I had been looking at – competition!

It wasn’t until I stepped back and did a TON of research, looking at different sources (Pinterest, Instagram, etc.), scanning products outside my given niche for inspiration, and taking a ton of notes along the way, that I really started to come up with ideas to make my items stand out.

Especially in competitive niches, making your products or service unique will be the only way to get on that first page of search results when selling your digital products!

No Matter What – Be Proactive

Making money on Etsy is possible, but it isn’t going to happen automatically. You can’t create a handful of items and then sit back and wait for the dough to roll in.

There is too much competition to expect that your potential customers will magically find their way to you. You need to be proactive.

Make sure your SEO (titles and tags) is on point, have amazing listing photos to show off your fabulous digital products in action, and add relevant details to your descriptions. Show off your individuality and get creative to help customers remember you and to keep them coming back.

Etsy Success Doesn’t 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 sale. Hang in there, and be willing to get a little uncomfortable in order to take the next step in your Etsy journey.

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