You might have heard that it is too saturated and that it’s too late, but is that really true?
In this article I’ll show you the facts and dispel the myths. If you dream of starting an online digital products business on Etsy in 2026, this article will help you decide if it’s worth it.
To answer the question of whether Etsy is still worth it, I am first looking at Etsy’s financials.
Let’s dive into these Etsy performance figures one by one, as they provide important context.
Do people still shop on Etsy?
Number of active buyers on Etsy by year.
According to Etsy’s financial reports, the number of active buyers on Etsy (who made at least one purchase in the past 12 months) has more than doubled since 2019, and sits at 93.5 million as of the end of 2025. While the large increase during the pandemic has plateaued, there has only been a slight decrease in recent years.
We can conclude that people certainly do still shop on Etsy.
Are people still spending their money on Etsy?
Etsy’s Gross Merchandise Sales (GMS) by year.
The overall increasing trend in gross merchandise sales (GMS) is similar to active buyers, where there was a large rise (more than double) during the pandemic, followed by a gradual decline during the next few years. GMS is still much higher than before the pandemic though, at $11.9 billion in 2025.
People are very much still spending their money on Etsy.
Is there too much competition on Etsy?
Etsy has 8.8 million active sellers as of the end of 2025. There was a drop in 2024 as Etsy attempted to clean up and remove shops that violated their policies. They also introduced a fee for new shops to reduce spam. The overall increase in sellers, with growth slowing after the pandemic, is all good news for legitimate sellers.
Number of active sellers on Etsy by year.
Those of you with a mathematical eye might have noticed that there are on average 12 buyers for every seller, and this number has been decreasing. But don’t let that deter you. Most of the sales and revenue are being made by the top sellers, and you could become one of those sellers.
Despite there being many sellers on Etsy, take heart as the bar can be quite low.
Many are doing it as a hobby, and many will give up after they don’t see quick success. Etsy is for the long game. So if you are serious and committed to Etsy, your competition is not as steep as you might think.
I will come back to the idea of competition and saturation from a digital products perspective below.
Is Etsy in trouble? Will they go out of business?
You might be wondering about of the longevity of Etsy. Maybe you’ve heard talk that they are in trouble. With so many competing marketplaces, including low cost platforms like Temu and Shein, are Etsy in danger of going out of business?
Etsy’s revenue has been steadily increasing over the past decade, with a jump during the pandemic. While revenue growth has since slowed, revenue has not shown the same decrease after the pandemic as the other metrics I’ve discussed.
We can conclude that Etsy seems to be doing just fine.
Etsy’s revenue by year.
The financial picture overall
Looking at long term trends over the past decade, Etsy has an overall increase in active buyers and sellers, gross merchandise sales (GMS) and revenue.
It is true that some of these figures have been decreasing over the past few years, but some regression to more typical levels is to be expected after the huge surge in online shopping during the pandemic.
Are there good alternatives to Etsy for selling digital products?
Etsy vs other marketplaces
The Etsy marketplace is particularly well suited to selling digital products as they have a special product type for digital downloads and they are highly sought after. You will find many digital download bestsellers and hugely successful shops which only sell digital downloads.
Most other large online marketplaces (such as eBay, Amazon, Walmart, Temu, Shein) are very restricted in the sale of digital downloads, so aren’t really an option you can consider.
Gumroad is a marketplace that specialises in digital downloads, but they are much smaller than Etsy so your products would be seen by a much smaller audience unless you drive traffic there yourself.
There is a discovery element to Gumroad, but it is limited. Most shops would not be relying on this (or else face a steep 30% fee, compared to the usual 10% + $0.50).
Etsy vs Shopify
Your own Shopify website can be a good option for selling digital downloads, but if you are just starting with selling digital products, I would definitely recommend Etsy instead.
This could be a whole blog article on its own, but the short version is:
When you build your own ecommerce website you are responsible for driving traffic to that website.
Sure, you should get some organic traffic from Google, but it probably won’t be at the levels you get on Etsy. If you are a marketing genius or social media guru, then driving your own traffic might not worry you. But otherwise, don’t underestimate how much work this will be, and how much of your focus it will take away from designing awesome products.
There is also a learning curve to building your own website, even using a platform like Shopify. If you have no interest in learning this, and are not in a position to hire a web developer, this is another reason Shopify might not be for you (yet).
Finally, Etsy also has fewer upfront fees, as I’ll discuss below.
Are Etsy’s fees too high?
Etsy fees
While Etsy has seller fees, they are similar to other platforms. I won’t compare with the platforms that don’t allow digital download sales, but compared to Gumroad, the fees work out slightly cheaper with Etsy (assuming a $5 sale price. For more expensive items, Etsy becomes even more attractive in terms of fees).
There are also fees for ads which can go as high as you choose, but they are optional (except for off-site ad fees). If the ads are running profitably, this should not be a concern. I see ads as an important part of selling on Etsy, and I’ll talk about this more in a future blog post as it’s a big topic!
For Etsy you have a listing fee ($0.20 USD) and a small fee when you sell a product (transaction and payment processing fees). There is no monthly fee.
Shopify fees
On the other hand, with Shopify, there is a monthy fee (starting at $29 USD), with the upside of lower fees per sale.
Shopify’s monthly fee might not sound like a lot, but when you’re just starting out and not making many sales yet, these upfront fees could make starting out feel more stressful than it needs to.
You also need to budget for any paid Shopify apps you use, and speaking from experience, you will need a few!
What do you get for your money with Etsy?
Not only do they take care of all payment processing for customers across the world, but Etsy exposes your products to a large audience of customers who are ready to buy.
To take my own business as an example of this readiness to buy, in the past month the conversion rate (percentage of people who viewed my product and then bought it) was more than 6 times higher on Etsy than on my Shopify website. This was not a fluke. My conversion rate on Etsy is always much higher than it is on my Shopify website.
Is Etsy too saturated for new sellers?
I touched on this earlier, but I want to reassure you.
There is room in the market for your shop, providing you choose your product and niche carefully.
For proof of this, if you have a paid eRank account, you can go through the list of Top Sellers which started in the past year or two. I guarantee you will find many that focus on digital downloads of some kind.
Update: I’m looking into compiling information about top recently opened digital shops for you, but in the meantime you can sign up for eRank* and see for yourself. I did this when I first started and it was useful to see successful new shops selling what I was interested in.
The other way to find these successful new shops is just to do a search on Etsy for the product you’re interested in selling.
Look for products labelled ‘Bestseller’ or ‘Popular now’, especially when those shops have a low number of reviews
These could very well be new shops. Go to their shop page to find out the shop’s age (scroll down past their reviews to find this).
Next steps
If you were hesitating about starting your own digital products shop, I hope this post has helped you to see the potential Etsy still has today.
If you would like a shortcut to getting your shop started, I have written a short guide book to take you through each of the steps in opening your first Etsy shop. It should take less than an hour to read, but is packed full of advice based on my own experience building a 6-figure shop with over 30k sales:
Make Money Selling Digital Products on Etsy eBook
* This post contains affiliate links. If you choose to sign up through my link I may earn a small commission at no extra cost to you.
I only have affiliate links for tools I have personally used and found helpful.