In this post, I’m going to show you how to make passive income on Etsy, and exactly what kind of digital downloads you should sell.

I’ll show you things like:

• What you should sell
• Why you should sell these products
• How to market these products

I won’t show you obvious things that you can Google like:

• How to sign up for an Etsy account
• How to make good images for your listings (just use Fiverr if you’re not proficient with Photoshop)
• Technical setups

What Kinds Of Digital Downloads Should You Sell On Etsy?

When you think “Etsy,” you might be thinking of blankets, trinkets, and other homemade goods. The issue with these products is that it isn’t passive at all.

For every order, you don’t want to have to turn on a machine or make something from scratch as it is extremely difficult to scale. If you have to manually make stuff, you also need to charge a lot for each item, which shrinks your market down quite a bit. My preferred way with most products is to keep it low-to-medium price, with a potential for very high volume.

This strategy will focus on products that are highly scalable, low-price, and most importantly: passive. And when I say passive, I mean 100% passive. Not the pseudo-passive you get from real estate rentals. Not the fake “passive” income you get from running Airbnbs. I mean, bonified, 100% money collection with no real financial risk (but comes with time risk, which I’ll discuss later).

To make your product as passive as possible, you should sell digital downloads on Etsy in the form of informational PDFs or useful checklists. In addition, you do not want to sell highly competitive things like resume templates and things like that. The reason is because Etsy will favor stores that are already proven to generate them a profit with their own digital downloads, so entering and trying to dominate a mature space is not going to work out in your favor!

I’ll answer 2 questions below, which is:

1. “What are good information PDFs and useful checklists?”
2. “How do I make sure there isn’t an insane amount of competition?”

Useful checklists / informational PDFs: In these checklists / PDFs, you’ll want to help your customer prepare for, or assist them in, certain life events.

Why life events? Because the market is evergreen and you’ll never have to worry about the market drying out. As an example, if you’re selling some wedding checklist or PDF, you’ll never run out of potential customers because people will always keep getting married and people will generally keep using platforms like Etsy as a resource for the foreseeable future.

Here are some Etsy digital download ideas to make money with:

• Spring cleaning checklist (though your potential customers only will come each spring)
• Real estate buying checklist
• Moving checklist
• Death planning checklist
• Information on how to get into the best schools
• Wedding planning checklist
• Various resources / templates for weddings, like invitation cards etc
• Fitness and exercise-related checklists and instructions
• Divorce checklist – feel free to cross this with other things like “real estate sale in divorce” checklist; more niche and less competition.
• Child custody calendar / checklist.

How do you know if something is very competitive?

Easy. Simply search for it and see if there are ample options. If there is, don’t bother wasting time making (or hiring someone to make) the PDF – you won’t get an ROI.

For instance, “wedding checklist” has a ton of results (6960):

And all the checklists are extremely relevant to what you want, which is a checklist to plan a wedding. There’s no real way to differentiate yourself and it would be extraordinarily hard for you to climb up top from the 6960 results and have your result dominate like the $1.60 first result we see in the screenshot.

You can try to compete with this if you want and you will get a lot of money if you rank near the top, but it’ll take an inordinate amount of time for you to do it (as we’ll see later it’ll already take you a fair amount of time even if you’re aiming for low competition). Thus, we don’t recommend doing highly competitive stuff as you’re starting out because it won’t ROI.

Another example would be like “child custody calendar”:

There’s only 167 results and not all of them are relevant. For example, the result in the 3^rd row “A Mom’s Guide to Child Custody” isn’t the same thing as a custody calendar. And in fact, a lot of the results later on in the first page isn’t very relevant to someone who is searching for a child custody calendar.

So, your competition is very low here (much less than 167) and while you might not 100% land on the top results, this is at least something that’d be worth competing on. Also, you’ll note that the market isn’t small because people are always getting divorced and there’s always going to be some poor child that’s caught in a destroyed marriage.

Dark, but true.

These PDFs are very passive because they just download it and then that’s the end of it. You don’t have to email them anything – Etsy does it for you. Maybe one out of 50 orders you have someone who can’t figure out how to download it, in which case you can just email to them or refund them.

Hiring Someone vs. Doing It Yourself

If you’ve got an idea of all the information / data you’d like to put in the PDF and checklist, you can definitely hire someone on Fiverr. In fact, I hired on Fiverr for probably ~10 of my Etsy digital download products.

The thing that’s risky here is two-fold:

1. They might not deliver what you want and you’ll waste a lot of time trying to explain exactly what your vision of the layout should look like. There’s a lot of cases where you could have just fired up Adobe Illustrator and did the whole thing from scratch yourself by the time you explained it to a contractor. So the first risk is time-risk.
2.  $5-$20/PDF (the good ones cost $20-$30 when I did it back in 2019) adds up quick. This business model is one of rapid testing and betting and aligns with the Pareto’s principle. Of probably 100 PDFs, there’s only a handful (maybe 5) that sell consistently. If you’re short on cash, paying $25 average per PDF may not be that great since it might take 100 PDFs until you find something that’s working (and even 100 PDFs isn’t a guarantee you’ll find something that works).

But, if you can get your ideas and layouts across quickly to a Fiverr contractor and you’re fine with the financial risk, you can definitely do it.

If you plan to do it yourself, I highly recommend learning Adobe Illustrator and start executing on these Etsy digital downloads yourself. I think back in the day I could do up to 4 to 6 a day, if I worked very hard. But that was more of a sprint period where I got carpel tunnel, so you probably want to do 1-2 PDFs a day if you do decide to pick up this business model.

Marketing Your Etsy Digital Downloads

You can do paid ads on Etsy but generally for these PDFs it isn’t worth it because paid ads are expensive relative to what you can sell a digital download for ($1-5 for a lot of the more basic PDFs, and $10-$20 if you have a very comprehensive PDF like a 20- to 50-pager or something).

If you do sell PDFs/information for a higher price, then the paid ads is worth a shot. The Etsy ad platform is extremely easy and straightforward so I won’t go through that here.

Instead, I’ll just go through the Etsy SEO and how I used to SEO my products.

SEO stands for “Search Engine Optimization” which basically boils down to strategically putting certain keywords in the right places so Etsy knows what you’re trying to sell. The more relevant your store and your product is, the more you can sell.

Your store’s relevance is a mystery but very likely a function of sales you’re making and how many of your products are aligned to the same category. For example, a store selling anything and everything under the sun without a niche might not be considered a great store by Etsy and so it’ll be harder to show up on the Etsy search results. But if the competition is very low, it won’t matter because you’ll be one of the only few listings available.

Likewise, your store’s financial relevance to Etsy is pretty much non-existent when you first join. This is why you want to fight in low-competition spaces so you can build up a track record (albeit modest). This’ll allow Etsy to give you more and more “street cred” over time and all your stores’ products will eventually be ranked higher as a result of your slowly accumulated sales.

Making sure your listing and SEO is on point is simple.

First, make sure your mockups are on point (get someone on Fiverr to do it or download templates to make mockups yourself) and upload at least 3-4 photos. One photo of the PDF, stylized, and maybe another 2-3 mockups where the customer can see how your PDF is viewed on an iPhone, tablet, monitor, etc.

Second, make sure the keywords you want to optimize for show up in these places:

In the title, make sure to have your most relevant keywords first, and then your second-most relevant keyword second, and so on. For example, say you’re selling a PDF on wedding planning that has a calendar, you could do:

“Wedding Planner Printable, Wedding Calendar Template, Digital Download Wedding Binder”

If you feel a wedding planner printable has the best chance of selling, wedding calendars 2^nd best chance, and a wedding binder as a 3^rd best option.

Beware of keyword stuffing here, which is when you do things like this:

“Wedding Planner Printable, Printable Wedding Planner, Wedding Planner With Calendar That You Can Print”

Etsy doesn’t seem to penalize keyword stuffing as much as Google but you’ll want to sprinkle in your relevant keywords instead of drowning the title in it.

In the description, it is crucial that your most relevant keywords show up in the first 160 characters. Google will prioritize the opening for their SEO, and Etsy displays the first 160 characters for their item’s descriptions (and so you can kind of conclude Etsy will optimize SEO with respect to the first 160 character as well since that’s what their audience sees). This isn’t to say that the rest of your description will not have any keywords in it anymore, but you will need to prioritize your most important keywords so it shows up early in the description.

The longer the description the better, since you can sprinkle more keywords in there, more frequently. And you can optimize what’s called “TF-IDF” by having more rare keywords (with respect to Etsy as a whole) and sprinkle them in more frequently in the description. And if you’re going to sprinkle in these longer-tail / niche-y keywords frequently in your description, you’ll need to have a lot of text in your description to be able to prevent keyword stuffing penalties.

Likewise, it doesn’t hurt to sprinkle in your main keywords in your description as well as long as you don’t ‘keyword stuff’ it.

Finally, the tags are straightforward: just keep the same rules in mind and sprinkle in as many relevant keywords as you can.

It’s Not Easy Selling Etsy Digital Downloads

Doing Etsy is anything but passive upfront. But once you’ve set up your store and have recurring revenue going, it gets very passive.

I had a phase in my entrepreneurial life where I’d try out new ideas for 30 days and just sprint through it as hard as I can for 30 days. This Etsy strategy was one of the things I’ve tested with the most ROI. Years later, I still get sales from my stores.

However, this was ultimately not for me because it required me to make a lot of Etsy digital downloads which caused me carpel tunnel (I didn’t want to hire it out for other people to do mostly because they were a lot slower than me and couldn’t make the documents as good as I wanted them to be). And because for each PDF I wanted to test, I had to make it from scratch, it became an enormous time risk for me where I might need to stick with it for many months before I get good traction (and traction isn’t even guaranteed). See this post for more details on why I don’t do Etsy anymore and why I now do e-commerce instead.

Overall though, I don’t regret spending a month on it because I picked up a fair amount of Photoshop and Adobe skills, and for example in 2020 this is what I earned across 2 stores (I did 2 stores since one store was more general PDFs, and another store was more focused a a niche due to the fact that I wanted to point all the keywords in the store in the same way to see if Etsy would like it more).

So for a month of effort as a side hustle, I was able to earn $763 in the year of 2020, and will probably earn similar in 2021.

But don’t like my lack of results discourage you though – keep in mind when I did this 1-month sprint, I had never used Adobe software before so a lot of that time was spent on ramping up. If you stick with this for 1-year, it’s extremely likely you’ll do more than 12X what I did since you wouldn’t have to start from 0 each month. In fact, with each month that passes you’d take what you learned in previous months and compound your skills and knowledge. I just stopped because honestly that 1-month sprint burned me out. So some advice if you want to start: 1) have patience, and 2) don’t burn yourself out in the first month with major carpel tunnel.

In sum: Etsy is a great choice for you if you’re interested in selling your own products and want to exercise that creativity. And also a great choice if you have the patience for the SEO to play out for your Etsy store and the maturity to not give yourself carpel tunnel by doing 8 hours of PDFs every single day.

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