How To Create Passive Income From Etsy Digital Products [2023 Update]

Have you ever wondered how to create passive income from Etsy digital products?

Unlike active income where you exchange your time for money, a passive income continues bringing in money even when you are NOT working. O_O

Imagine you’re hiking a magnificent mountain with the love of your life, cycling the scenic coasts with your family, or even just chilling with your cat on a weekday morning… all while making money on Etsy at the same time!

How to create passive income from etsy digital products

I know this sounds too good to be true, but I took this course on printables, created passive income from my digital products, and even held my own workshop to teach others.

I now firmly believe anyone can learn how to make passive income on Etsy – yes, including you!

You will learn the exact steps by reading this article: 

  • Create passive income on Etsy using digital products
  • How to create digital products to sell on Etsy
  • How to sell digital downloads on Etsy
  • Best selling digital downloads on Etsy

Affiliate Link Disclosure

The links on this page may be affiliate links, from which I earn a small commission if you click on them, at no extra cost to you. Hope you find the information here useful. Thanks!

Note- If you are super busy and you want to start making money selling digital products  on Etsy ASAP, you can check out this and this Etsy course. Both will step up your Etsy game and start earning within 3 months!

Alternatively, you can also check out this free Etsy Ebook that will share a list of best-selling products by month and teach you how to capitalize on seasonal trends to skyrocket your Etsy sales.

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How To Create Etsy Digital Products For Passive Income? 

First of all, what are Etsy digital products?

Etsy digital products are files that customers can download without a physical or printed product shipped to them.

Upon payment, customers receive a link to download their purchase immediately and that’s it! Some examples include printables, invites, cards, trackers, artwork, and so on.

How to create passive income from etsy digital products

1. How To Create Digital Products Using Pre-made Designs

Want to know how to make money on Etsy without making anything? You’re in luck – I’ll share a neat trick with you!

There are websites that let you buy or download pre-made designs for very low to no cost, where all you need to do is pay and upload the file as listings on your Etsy: 

When purchasing pre-made templates, you can usually use them without making any modifications, however, I highly recommend you read the terms of use for each purchased license.

Please do confirm if there are any commercial limitations when using a product as each platform will have different terms and conditions.

As an example, Creative Market offers two different options:

  • Commercial license
  • Commercial extended license

While you can use the template for your Etsy store with only a commercial license, there will be a limit to how many times you can sell under each license you purchased. 

Creative Market allows buyers to sell designs 5,000 times with a commercial license and 250,000 times with a commercial extended license.

A commercial license lets you sell a design 5,000 times.

A commercial extended license lets you sell a design 250,000 times.

Remember, the terms of commercial licenses will change based on the platform you use, and if you choose to modify or use the product as they are.

2. How To Create Your Own Digital Products With Templates

Next, let me share how to create a digital product using templates on Canva as an example.

Watch this video on Canva’s official Youtube channel on how to edit and share templates!

As seen in the video, you can customize a Canva template to change the overall design, making it an original design by the end.

This allows you to use the final design freely, without commercial limitations, even though you used a premade template in the beginning since it has now become a unique design.

Do note that some of the templates with the dollar ($) sign means they are paid templates that can only be used for free if you have a Canva Pro monthly/yearly subscription.

However, the amazing thing about Canva is that there are a lot of available templates free of charge already so all you need to do is:

1. Choose a template

2. Click on ‘elements’

3. Type a keyword such as ‘flowers’

4. Choose the graphics and/or add text

5. Edit according to your preferences and save!

Another cool feature in Canva is that you can click on a graphic you like and Canva will automatically recommend graphics of the same style!

This saves you time and helps you in the creative process, perfect for a beginner. YES, you will be able to start creating and selling digital products even with ZERO experience in designing.

Simply utilize free tools such as Canva and Google for color palettes or design tips for products you want to create! And best of all, it can be completely FREE to create as much as you want with the following tools.

Best Tools To Create Etsy Digital Products

Even if you are creatively challenged, the following tools offer countless templates where all you have to do is click, click and click. No designing or creating from scratch is required at all!

Additionally, there are also endless Youtube tutorials sharing tips and tricks for free on how to best utilize these tools:

Best Courses For Etsy Digital Products

Pressed for time to learn everything on your own? Or, do you simply learn better with someone telling you exactly what to do?

Then, you should consider investing in a course where the lesson plans are already laid out chronologically for you to just follow step-by-step at your own pace!

By the end of a course, you would have created your own digital products and opened an Etsy shop to start selling right away.

How to create passive income from etsy digital products

1. Printables by Number

Suzi has been making passive income from Etsy printables for years and has taught thousands of students how to do the same! Having bought Printables by Number, I can attest personally that this is one of the best courses on creating and selling Etsy digital products.

How to create passive income from etsy digital products

2. E-printables Side Hustle Course

Another recommendation would be the Gold City Ventures’ E-printables Side Hustle Course. Co-creators Julie and Cody have made thousands of dollars from their Etsy businesses, and now teach one of the most popular courses on Etsy digital products.

 Itching to learn even more? Here are the best Etsy courses I compiled just for you.

SEO For Etsy Digital Products

1. Sale Samurai

Sale Samurai is an Etsy keyword research tool that provides you with insights and analytics with real search volume data from Etsy. 

How to create passive income from etsy digital products

I highly recommend Sale Samurai to skyrocket your Etsy SEO – what’s more, you get 20% off with my code outandbeyond (lowercase) for life!

2. KeySearch

KeySearch is another extremely affordable keyword research tool that you may use for Etsy, and beyond (blogs, Youtube videos, and other E-commerce sites). Please feel free to use my code OUTANDBEYOND for 30% off monthly!

How to create passive income from etsy digital products

Understanding and investing in proper Etsy keyword research from the very beginning will help skyrocket your passive income in the long run.

Best-Selling Etsy Digital Products

Scratching your head over passive income ideas on Etsy? Not to worry, I got you!

Here’s an extensive, yet non-exhaustive list of digital product ideas for you to get started:

  • Planner
  • Home decor
  • Product labels
  • Order inserts
  • Business cards
  • Invitations
  • Fitness and habit trackers
  • Self-improvement printables
  • Wedding printable
  • Party banner
  • Party printable decor
  • Printable games
  • Menu template
  • Resume templates
  • Sewing patterns
  • Monthly Calendars
  • Weekly Planners
  • Daily Sheets
  • Wedding Planner
  • Blog Content Planner
  • Budget Planners
  • Meal Planners
  • Fitness Trackers
  • Inspirational Wall Quotes
  • Bible Verses
  • Funny Quotes
  • Nursery Artwork
  • Bathroom Artwork
  • Laundry Room Art
  • Kitchen Art
  • Resumes
  • Invitations
  • Holiday Cards
  • Announcement Cards
  • Photo Albums
  • Marketing Material
  • Wedding Signs
  • Party Signs
  • Greeting Cards
  • Coloring Pages
How to create passive income from etsy digital products

Selling Your Etsy Digital Products

You’re done creating your digital product – awesome, congratulations! Now let’s get it out there on your Etsy shop for the money, honey.

1. Firstly, upload your digital product file as a listing on your Etsy shop

2. Important! Mark as a digital listing to make it clear to customers that this product is digital

3. Next, price your digital product competitively based on current best-sellers
4. Upload clear, clickable product photos with a consistent theme for branding

5. Last but not least, remember to add relevant SEO keywords and tags

Writing Product Descriptions for Etsy Digital Products

The product description is where customers read for more information when they are interested in your digital products.

Ensure all information are available so they can decide to buy from you before they’re even finished reading. Here’s the necessary information to be included in your description:

  • Dimensions height x width
  • File format
  • Total number of pages
  • Ordering process
  • Info for printing

Digital Delivery To Customers

Etsy will deliver your digital products on your behalf to customers upon their purchase and payment.

You may upload up to 5 files at 20MB each, and also your design to the bottom of the listing edit page.

Etsy will immediately send them the link to download the file when a customer orders your digital listing. Clients can also access the download page in their ‘Purchases and Reviews’ page at a later time.

FAQs On How To Create Passive Income From Etsy Digital Products

Can You Make Passive Income On Etsy?

Can you make passive income on Etsy? Yes, you can make passive income on Etsy! Etsy is a surprisingly good way to earn some side-hustle money passively. A shop with optimized SEO and good-quality products in the right niche will earn passive income. This is the guide for you if you don’t know where to start. I will walk you through the entire process of creating passive income from Etsy digital products.

Do Digital Files Sell Well On Etsy?

So, do digital files sell well on Etsy? Yes! Digital files sell well on Etsy. Digital products are one of the hottest categories on Etsy right now. Every day, Etsy buyers browse for digital products for simple DIY projects. Digital downloads are a great way for sellers to start creating passive income due to low upfront costs.

What Digital Products Make The Most Money On Etsy?

So, what are the best-selling printables on Etsy? Here’s a list for your reference:

  • ADHD planners
  • Flower prints
  • Halloween prints
  • On The Day You Were Born series
  • French text
  • Quotes
  • Manifestation journal
  • Digital planners

How Much Money Can You Make Selling Digital Products On Etsy?

How much money can you make selling digital products on Etsy? Etsy sellers are making an average of $50 a week to $1000 a month by selling digital products on Etsy. However, how much you can make highly depends on the quality of your products, the niche, and if your Etsy shop is optimized for SEO.

Is Etsy Already Saturated With Digital Products?

Is Etsy already saturated with digital products? While many products and niches on Etsy are already saturated, we’re fortunate that Etsy has 96.3 million active buyers as of 2022. Niching down with high demand, low competition products will provide you with the best opportunities and chances for success.

Is It Easy To Create Passive Income From Etsy Digital Products?

So, is it easy to create passive income from Etsy digital products? Yes, it is easy to create passive income from Etsy digital products! However, this is only if you are putting in the effort to learn Etsy SEO and create quality digital products targeting your audience. This is important for gaining traction in the beginning, especially for new Etsy shops.

In conclusion, you should first learn how to optimize your Etsy store with Sale Samurai and KeySearch to create passive income from digital products on Etsy. This is to choose the best niche for you and identify trending and best-selling digital products you want to create.

Next, start creating Etsy digital products using free or paid tools and practice, practice, and practice.

If you want to sell digital planners on Etsy, refer to the best-selling planners and create an even better version. This is the stage where the learning curve feels the steepest as you get familiar with new tools and exercise your creativity – keep going!

Lastly, write SEO-optimized descriptions for your digital products, price your digital products competitively according to market rates and learn from the best Etsy courses to make money from Etsy digital downloads.

I wish you all the best in your journey to create passive income from Etsy digital products! If you have any questions or your own tips, please comment – I’ll gladly answer and share with my lovely community here.

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