Is selling digital products on Etsy profitable?

One of the most common questions I get asked is: Is selling digital products on Etsy profitable? My answer is always the same: Not only is it profitable, it is also my recommended platform for beginners. Many shops are making thousands per month on Etsy. The top 10 digital product stores have made millions in their lifetime.

This is due to the fact that Etsy has very few upfront fees, giving you a much greater chance of turning a profit from the very beginning. Combined with the fact that digital products can be created cheaply or freely, a digital product store on Etsy has a very good chance of being profitable.

The only upfront cost is the physical equipment needed to run digital product businesses, however most people will already own the essentials – and the software (which you can use as little as or as many programs as you like.

Proof that selling digital products on Etsy is profitable

Anyone who follows me knows that I run three Etsy stores.

• Planprintland, started in late 2020
• My second shop (which I do not share publicly) started in 2022
• Selfwage which I started in Early 2023. 

As you can see in my 2022 digital product sales income report, I managed to generate an income of $160,240 AUD ($110,565 USD) between Planprintland and my second Etsy shop. Please note that this income report did not include income for the SelfWage Etsy shop, as I did not open it until 2023.

Not only that – my second Etsy shop was only opened in January of 2022, which means I managed to earn $78,187 AUD ($53,949) one year, from just one of my digital product stores on Etsy. This goes to show that selling digital products on Etsy remains a viable option in 2023, despite many claiming that “Etsy is too crowded”.

Why selling digital products on Etsy will usually be profitable

Selling digital products on Etsy will almost always be profitable, due to the fact that Etsy has very few upfront fees. What this means is that you will not be charged until you begin making sales, unless you decide to run advertisements on Etsy (or through other platforms). You can have a look at my Etsy fee breakdown, and have a look at what the Etsy fees are for digital sellers.

Other platforms, such as Shopify or WordPress with Woocommerce, will require you to pay fees such as monthly subscriptions, domain name registration, hosting, plugins and more. Etsy on the other hand allows you to open your shop and list your digital products (almost) free of charge.

What are the fees on Etsy that you should worry about?

Etsy Listing Fees

There are some fees which you should be wary about when starting a digital product shop on Etsy. The main one being the listing fee when adding a product. Etsy charges a flat 20c USD listing fee for each new listing. This fee is charged every time a product is sold, as it must be ‘relisted’ with each purchase.

A new shop with zero sales will cost just $8 USD to list a total of 40 digital products. 40 Digital products is a great starting number for a new Etsy store to aim for, and should be more than enough to start making your first few sales.

Note: If you have not yet opened your Etsy shop, you can use the following link for 40 free listings – saving you money and almost guaranteeing you a profitable Etsy shop.

Other Etsy Fee

Etsy also has a number of other fees, including ‘Listing fees’, ‘Transaction fees’, ‘Processing fees’ and Sales taxes such as GST (Australia) and VAT (Europe).

However, you will not be charged any of these fees until you make a sale, with the money coming directly out of your sales balance. This means that it is very unlikely that you will ever have to ‘pay’ these fees from your own funds.

I’ll let you know now – Etsy’s fees can be quite difficult to navigate. If you want a more in-depth look at the fees you will face as a digital product seller, be sure to check out my Etsy fee breakdown.

Other costs associated with running a digital product store on Etsy

Graphic Design Software

In all honesty, it is possible to run a profitable digital product store without paying for any software or subscriptions. This is of course, largely dependent on the type of products you are selling. For example, if you were to sell guidebooks, study notes or spreadsheets, you could make them all for free using Google Docs or Google sheets.

At the bare minimum, I personally recommend using (and paying for) an online graphic editor such as Canva or Adobe Express. Paying for subscriptions will mean that you can not only create beautiful listing images, but can also legally sell your designs to customers.

Programs such as Canva and Adobe express will cost you less than $10 a month, which is a tiny cost compared to the potential income you can make on Etsy with digital products.

Etsy Keyword Research Tools

The only other cost that I recommend to beginners is your choice of one of the many Etsy keyword research tools available for use. Again these will cost you no more than $10-15 per month, but will help you immensely when deciding what to make, and what keywords to use. 

I currently recommend Everbee, which has been monumental in growing my stores.

These are by no means a requirement of running an Etsy store, but creating products and product listings will be a shot in the dark without them.

There is one thing I will always preach: It is in your best interest to do everything in your power to make your shop successful from the get-go, even if this means you may eat into your profit at the beginning. 

Too many times have I seen new shop owners give up before reaching their full potential. Many have beautiful products, but lack in other areas such as SEO or with listing images.

Total Costs of running a digital product Etsy store

Evidently, you can open and run an Etsy store almost for free (or if you were lucky enough to open your store with 40 free listings) for free. Cheap online tools such as graphic design software and Etsy keyword research tools will help you optimize your digital products, and give you a better chance of running a profitable shop. 

Most people will be able to run an Esty shop for under $20 USD a month, which in reality is a crazy cheap price for having your own business. Over time, you will find new tools and make upgrades to existing software.

But these changes will scale with you, meaning your spend at the beginning will be low, and your chances of profitability being high.

What are the Ways to run a profitable Etsy Shop

If you were to take the average of $20 per month on software to run your Etsy shop, it won’t take much to recuperate your costs and turn a quick profit. To achieve this profit (after fees) you for one month, you may:

• Sell one $24 product
• Sell two $12 products
• Sell four $6 products
• Sell six $4 products
• Sell twelve $2 products 
• A mixture of the above

This really isn’t much of a difficult feat. Most dedicated sellers who stick with it will be making much more than this by their third to fourth month on Etsy. 

Clearly, selling digital products on Etsy is profitable, even in 2023 and beyond. Etsy’s minimal upfront fees, and low supporting software costs make it the perfect platform for new sellers looking to sell digital products online. Monthly costs can easily be recuperated after a few sales, which means that it is one of the easiest ways to profit as a business.