As an aspiring digital seller, you’re probably feeling overwhelmed at your choices of what to sell. There are so many possibilities! But how do you narrow this down and decide what to sell? There are a few important considerations that I’ll walk you through to help you feel confident when choosing your product type and niche. While you can of course change this down the road, it is still important to not jump into this decision too quickly as it will have a huge impact on your shop’s future success.
But first, what is a digital product?
A digital product is one that your customer downloads and uses on their computer or mobile device, or sends to a printer.
They fall into broad types such as wall art, stationery and templates.
They also belong to a niche, such as wedding, business or travel, which aligns with your customer and their use case.
Within niches there are also subniches that get even more specific.
So with all this in mind, how do you choose your digital product?
Let’s break this down into 3 considerations:
- Market demand — what are customers looking for?
- Market saturation — what is the competition like?
- Your skills and interests — what would you enjoy?
Choose a niche where there is strong demand, reasonable competition, and that is aligned with your skills and passions.
What are customers looking for?
You’ll never sell a product that people don’t want, no matter how good it is. Unfortunately.
There are two main ways to find out what people want:
- From the marketplace itself (Etsy)
- Using market research tools
How to do market research on Etsy
This is just a brief overview, but the easiest way to assess demand is to go straight to where customers are shopping — in this case, Etsy.
If you don’t have any idea what you want to sell, you could start with a broad search such as ‘digital product’ and see what comes up. Take note of listings marked Bestseller or Popular now. You would want to see several of these on the first page.
Search for your product idea on Etsy and look for ‘Popular now’ and ‘Bestseller’ badges on the search results.
Next, move onto more specific searches based on your ideas. Again, look for evidence of customer demand through bestseller and popular now badges.
Clicking into a bestseller or popular now listing, you may find more information such as how many shopping carts the product is in, or how many have sold in the past 24 hours. This information is gold and gives you a great idea of demand right now.
Etsy shows various indications of customer demand on the product listing page.
Please be careful not to click on listings that are ads while doing your research (marked by a very subtle ‘Ad by’ in front of the shop name). This will cost that business money!
Is it worth using market research tools for Etsy?
It could be, but you probably only need to sign up for a month or so while you’re getting started. After that, I would pay more attention to your shop’s own analytics: sales, favourites, views, in order of importance.
Over-reliance on market research tools can make your shop more of a follower than a leader, which is not what you want to be once you’re established.
Having said that, here are a few of those tools:
- eRank
- Alura
- eHunt
- Everbee
- InsightFactory
- ProfitTree
- Marmalead
- Sale Samurai
Yes, that’s a lot of tools! I’ve tried a few of these and I quite like eRank*. I think it is probably the best value and they have a very generous free plan too. I use them more to assess level of competition versus demand — I’ll cover this in the next section.
But you can also get an idea of market demand (number of searches or sales) from these tools too. Bear in mind many of the numbers are estimates only, though Etsy have recently released keyword search and competitor data (Etsy Marketplace Insights) that is the real deal, and some of these tools might integrate this data.
Etsy’s own Marketplace Insights show real search volume against competition (search results).
What is the competition like?
So you might be thinking, great, I’ve found popular products to sell! Let’s go!
I love your enthusiasm, but hang on there! The next step is to check if you could compete against other shops to sell your version of this product.
What to look for in the competitor landscape:
Competitor volume — How many competitors are there for that product? Is the ratio of competitors to searches reasonable?
Competitor quality — What is the quality of competitors’ products? Is there room for improvement?
Competitor age — Are the top sellers new or well established?
How does supply compare to demand?
If you get very lucky, you might come across a unicorn product that is often searched for but does not have a lot of competitors. If you did, amazing!
Usually that won’t be the case though, to be honest. So now you’re looking at whether the amount of competition is reasonable. This is a subjective term, and a bit relative, so I can’t give you an exact number to aim for. But take the number of competitor listings and divide it by the number of searches, and you will find out roughly how much competition you would have. Low numbers are great, high numbers would be a challenge.
Some of the extensive data eRank provides for a keyword. Divide Etsy Competition by Avg Searches to calculate the number of competitor listings for each search. Lower numbers are better.
You can also lower your competition by narrowing down to a subniche. For example, instead of a ‘wedding invitation template’, you could look into selling a ‘wedding invitation template for beach wedding’.
Can you improve on this product?
While you’re looking at popular listings in Etsy, read some of their reviews to find out what customers like about the product, and if there are any suggestions for improvement. These could give you ideas for ways to make a better version of that product.
Is there room for new players?
Go to the shop’s page to find out how long they’ve been selling on Etsy. This can be very telling. If most of the shops with popular products are many years old, it will be harder to break into this market. On the other hand, if you’re seeing newer shops (say, less than a year old) making good sales, this is a great sign that there is room for your shop in this market too.
What would you enjoy?
Finally, think about your skills and interests. People underestimate how important this is for a long-term, sustainable business.
For the vast majority of digital Etsy shops, to be successful you won’t need just a few products, you will need to produce many, many products and on a regular basis.
I strongly suggest choosing something you would like to make over and over again!
If you have particular skills (say, you’re a Notion wizard), keep that in mind too. That will enable you to create better products more quickly, so you’ll have an edge over your competition.
Next steps
There is a lot to consider when choosing what digital products to sell, and I’d suggest that you give this some time and not rush into anything.
But once you feel like you have enough information, the best move is to start creating and listing. There is nothing like real shop feedback to get a sense of whether you are going in the right direction.
In case you’re still hesitating and unsure though, 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.