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Etsy, best known for handmade products, is one of the top options for entrepreneurs breaking into the digital market. While the platform has many upsides, it’s not ideal for all kinds of stores, and it can be particularly difficult selling digital downloads on Etsy.

Looking to start or grow your business, and not sure how best to optimize for growth? Read on for an exploration of the ups-and-downs of Etsy, plus information on alternative methods of selling online.

3 Reasons Selling Digital Downloads on Etsy Limits Your Growth

1. Minimal Branding Options

2. Limited Marketing Opportunities

3. High Fees and Subtle Added Costs

pinterest graphic for the article 3 reasons selling digital downloads on etsy limits your growth from Selz ecommerce and

1. Minimal Branding Options

The upside of the simplicity of the Etsy platform is the ease of getting started. Because all stores look essentially the same, you can focus on your product descriptions and images, making it totally possible to start a new store in a matter of minutes.

Make Your Store Stand Out

While this simplicity is helpful when first taking the step of building the store, it can quickly become a downside as you begin selling digital downloads on Etsy. It is incredibly difficult to make your store stand out in a marketplace of identical storefronts.

Etsy will advertise similar products on your page, making it dangerously easy for interested customers to click away and lose your store in the shuffle.

When selling digital downloads on Etsy, you want potential customers to focus on your product, not be distracted by items from other sellers.

When creating your own site, you have significantly more control over your click funnel. Building a beautiful, eye-catching storefront is easier than ever before, so with only a little more time, you can put together a professional-grade store that establishes a degree of trust with potential customers.

Check out the simple-to-use Selz store builder:

Keep in mind that selling digital downloads on Etsy (or anywhere) generally depends to some degree on the personality behind the product.

Whether it’s a workout plan, a cookbook, or a guide, the credibility of the author has a huge impact on sales. Your own site can include videos, PDFs, and other content establishing you as a reliable source of information.

2. Limited Marketing Opportunities

One more time with feeling: repeat business accounts for 40% of sales. Retaining customers is vital to surviving in the digital marketplace, but it is significantly more difficult on larger, more anonymous eCommerce hubs.

Brand Recognition

Think of it this way: do you remember the name of the store where you last bought a product from Amazon? Have you asked a friend where they bought an accessory and gotten the response: “from Etsy”?

To be successful online you need referrals and customer engagement, and for that to happen, you need a memorable, easily accessible site, ideally with a unique URL.

Targeted Marketing and Discounts

Features like list-building, abandoned cart emails, and customer info retention let you keep an eye on both individual and broader shopping habits and reach out to your customer base in a more specific, targeted way- i.e. offering discounts for repeat shoppers.

Etsy is not built or integrated with platforms for this kind of tracking and engagement.

Customer Contact Information

If a customer purchases your eBook off of Etsy, you have no contact information to retain that customer. Repeat business is the lifeblood of eCommerce.

Through targeted messaging, you can create customers who not only come back for more, but end up promoting your store to their friends (cool, huh?). This is possibly the biggest drawback to selling digital downloads on Etsy and truly limits your growth potential.

Search Engine Optimization

Additionally, SEO is huge for bringing your store to new eyes- another Etsy no-go. When you create your own online store with Selz, you can add multiple pages and a blog to the site free of charge.

This means you can create content and pages that lead brand new users to your site through SEO and targeted advertising. Without this strategic inbound opportunity, you are essentially banking on how Etsy chooses to show your listings and how users are searching for products.

Multichannel Selling

In a nutshell, a store focused around digital downloads needs a combination of word-of-mouth, good marketing, and solid internal mechanisms to thrive. Control over your brand, messaging and customer engagement is what leads businesses to thrive.

Etsy makes the process of getting started simple, but from there you’re pretty much a small fish in a big, distracting pond.

Read more: 5 Tips to Selling Digital Downloads

3. High Fees and Subtle Added Costs

On the surface, Etsy seems very affordable- and starting out it is. Because there is no monthly fee for use, and just a small charge to list new projects, getting going on Etsy is incredibly cheap.

Over time, though, Etsy’s fees can add up and take out significant chunks of your revenue.

Etsy takes 5% of the sale price for every item you sell, plus checkout fees (another 3%), meaning that 8% of every sale goes directly to Etsy.

Again, early on, when you are only selling a few items a month, this isn’t a huge cost. The more inventory you move, however, the more this ends up costing. For example, if you sell an eBook of recipes for $20, $1.60 of each sale will go to initial costs. Sell twenty copies in a month and you’re already up to $32.

But, there’s more. The 5% transaction fee now also applies to the cost of shipping, which can put a significant dent into your overhead, especially if you’re shipping larger items.

The big problem here, again, revolves around the difficulty of standing out in a crowded marketplace. In the example above, your store would be paying significantly more than the approximate cost of using a Selz plan without the benefit of a unique site, custom domain, abandoned cart emails, accounting integrations, Google Analytics and more.

Bonus: Copyright Infringement Issues

So far we’ve focused on material differences between Etsy (and other marketplace hubs) and platforms that allow you to create your own store. We did want to make one more note specifically on Etsy, however, related to copyright issues with your content.

According to their Transparency Reports, over 440,000 stores were closed by the Trust and Safety Team at Etsy between 2014 and 2015.

Essentially, in copyright disputes (which are common due to the ease of downloading and replicating another seller’s designs or product) Etsy will take the safest route and immediately close any store that has received a complaint.

This makes it incredibly easy (and common) for another store to steal your product, make a complaint about your store, and get you shut down. Sellers can also be catty, reporting competing sellers and knowing that Etsy will not investigate before taking action.

If you are selling digital downloads on Etsy, this presents a real danger to your business.

Look instead for features like PDF stamping, Send-to-Kindle, and automatic updates to ease the process of getting your work out into the world and keep your intellectual property safe.

selling digital downloads on Etsy is something to think about, sitting on a rock looking over a beautiful vista, you may want to choose Selz do-it-for-me instead

Let’s be clear- Etsy is not a bad platform. For many creators of handmade products, it’s a great way to get their work out there and make a little income on the side.

For individuals looking to grow a small business, though, the limitations of the platform can be stifling. With Selz, you can build a unique store, integrate shopping features into an existing site, and cover your social media with buy buttons and widgets. Payment processing, digital fulfillment, and customer relationship management are all part of the package.

If you’re not ready to jump ship on Etsy, don’t fret! It’s also 100% possible to maintain a combination of an Etsy store and a business website.

Many sellers maintain a presence on Etsy to cash in on the consumers scrolling the marketplace but direct their traffic to an independent Selz store where they can control the customer engagement and retention, as well as profit from their sales at a higher rate.

So, what’s holding you back? Now is the perfect time to set up your online store and start growing your brand! Sign up for Selz today and receive a free 14-day trial of the platform to get acquainted with our simple store builder and start expanding your enterprise.

About the author

Bryce Patterson

Bryce is a writer and content marketer for tech companies including Churn Buster and Evergreen. He gives ecommerce business and non-profits a more human, relatable voice. He has written a novel, worked on a comic book, and played in a handful of bands. Bryce lives in Colorado.

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