I’ve been selling on Etsy for 5 years this month (I can’t believe it!). I spent my first 3 years selling strictly digital items. Back when I first started, Etsy was not very digital friendly, and I had to email each and every file I sold! Now, Etsy makes it easy with their Instant Download system. I have transitioned to also selling physical products in the last few years I’ve been on Etsy, too. So, today I wanted to share the pros & cons of selling digital vs. physical items on Etsy (or both!).
Okay so for starters- digital items are going to be anything that you create once and sell again, and again. There are many custom digital items out there where a customer orders a digital item, such as an invitation and the seller then customizes it with the customer’s information, but for the purpose of this article, I lump those in with physical products, because you are still taking the time to customize the item with the customer’s information. To me- digital items are those that the customer gets automatically sent upon purchase and that you can make once and sell over and over again to new customers.
Some examples of digital products include: printable wall art, organizational printables, DIY printable invitations and party supplies, etc…
Here are the PROS and CONS of selling digital items.
- Passive income- you keep earning, even in your sleep, on the same items
- Little to no overhead – I purchase various software programs to make my digital items, and those come with a monthly fee but that fee doesn’t even begin to come close to what I spend on supplies for making my physical products each month.
- Create one item and sell it again, and again
- The customer has to do more work- sometimes, when it comes to having your customers print their own items, it can be frustrating for them when they have problems with their computer, printer, etc.. and they may blame you, though it may be completely out of your control.
- Items typically sell for a lower cost- you attract a different kind of customer when you sell things at a lower cost, that’s just the honest truth. Sometimes, our customers who are more worried about getting things for a discount can be harder customers to deal with when issues do arise.
- Printable/digital items may be more difficult to sell. If a customer can find the same thing elsewhere on Etsy where they can order the item and skip out on all of the extra leg work on their part, many customers will choose this convenience.
- More competition- it is easier to make and sell a digital item, and with the increase of information available online now, more and more people are selling digital products. This means that there will be more competition and you’ll have to keep up or get buried in the Etsy search results. But I have a solution, keep reading!
So, physical products for me is anything that you are having to take the time to sit down and make for each individual customer. Keep in mind, some physical items may be less labor intensive than others. For example, when I sell planner stickers, my printer and silhouette machines are doing the most of the work and I can typically multitask on other things and still create my items. Then, if I sell planner inserts, I myself have to sit down and hand cut and trim each set and hole punch each page. You can see how creating planner stickers is less labor intensive than planner inserts. However, with each of these examples I am trading my time by putting in the hours and the work to create these items for each individual customer. Here are the PROS and CONS of selling physical items.
- You may attract a different type of customer- just like I mentioned when talking about less expensive printable items, the opposite can be said for more expensive physical items. You’ll likely attract customers with more disposable income, who may be more reasonable if issues arise with their product, shipping times, etc… This isn’t always true, but it is just something I have noticed myself and through talking to others in the community.
- You control the end product. With digital items, your customer is creating the item themselves. Where this can cause issues for digital product creators and unhappy customers, your customers will likely be happier receiving a finished high quality product with less work on their part.
- Trading time for money. The biggest advantage to digital products is the passive income opportunity, so the opposite is true for physical products. You are trading your time and skills to create this item, so you have to factor those things into the cost. Some physical products may be too labor intensive to do completely handmade, and you may find that you aren’t paying yourself well enough for the time spent, while still being competitive on your prices.
- Shipping! Shipping isn’t necessarily a con, as in a bad thing, but it is an extra step that you just don’t have with digital items. Packing orders takes time, you have to charge customers extra for shipping, and also hope that you don’t under charge and have to pay shipping costs out of pocket. You also have the added expense of mailers and packaging supplies. This all further complicates your pricing formulas and making sure that you are charging the proper amounts for your items.
- Lower margins than on digital items due to having to purchase supplies, etc. to create the items.
Why does all of this matter?
It is important to take all of these things into consideration when you are deciding whether to sell on Etsy. It really all depends on your personal situation and what is important to you. If you have a great physical handmade product that is less labor intensive, has higher margins on profit, etc, that is excellent! If you have spare time in your day to spend making these products, and they sell well, even better!
Using myself as an example, I have two young rambunctious boys at home with me all day- we don’t use childcare for them, so I am keeping an eye on them and tending to their needs, which can make finding time to create and ship physical products more difficult. My solution on Etsy has been extending my turnaround times lately, but that turns some customers away, and I get messages everyday from customers wondering when their items are going to ship. I have my turn around times listed, but sometimes they just may not see them or may not pay attention to all of that “fine print.”
So, I have mentioned many times that my ultimate goal as a seller on Etsy is to get my shop back to strictly digital items, to give myself more time for blogging and even more time for my little ones. These are just all factors to keep in mind when planning to open an Etsy shop, or deciding what products to put in your shop. I hope that this has been helpful for some of you prospective or current Etsy sellers, and I want to invite all of you to download my Etsy SEO Guide. It is a printable PDF that will guide you through how to find great keywords for your Etsy shop and where to put them in your listings so that your items will show up in Etsy search results bringing you even more customers! Sign up below to download.