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Sarah Waggoner

Can You Make Passive Income on Etsy?

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It sounds like a dream, right? Put up a few listings and make a ton of passive income on Etsy right away. Unfortunately, it’s not as easy as all of the YouTube videos and TikToks bragging about making $30k in the first month might lead you to believe. So can you have a passive income Etsy shop? Yes…and no. Let’s talk about it.

Is Etsy income passive?

Etsy, like almost every other business out there, is never going to be a fully passive form of income for you. Besides the day-to-day, customer service that every shop owner making consistent sales has to deal with, you’re also dealing with an ever-changing marketplace with new competition and changing trends.

Yes, you can outsource a lot with an Etsy shop including your customer service and day-to-day activities, but until you get consistently high sales, it’s not something a lot of Etsy sellers can do right away.

So if you’re planning on starting an Etsy shop for digital products with the goal of the business becoming passive income, be prepared to put in a ton of work at the beginning.

How much money can I make with an Etsy shop?

There are plenty of Etsy sellers out there making six to seven figures on the platform. The revenue you can make is truly limitless because of the amount of buyers shopping on Etsy each year.

If you’re focusing on digital products for a passive income, a realistic goal for your first year will be a few hundred to a few thousand dollars if you don’t have a lot of time to invest. While the potential on Etsy can be a lot higher for many sellers in their first year, digital products are often low cost for buyers, which means it can take a lot of traffic to get the sales you want.

If you can commit to full-time hours at the beginning of your Etsy business, you will be able to generate passive income more quickly than that, however.

If you can’t, no worries. Working 40 hours a week isn’t a requirement to make significant revenue on the platform.

How many hours do I need to work each week?

So how many hours do you need to work to make sales quickly on Etsy? Plan on at least 5-10 hours a week at the beginning to see consistent progress on the platform.

If you’re short on time, you might consider making digital products that don’t take hours and hours to create.

What products should I sell on Etsy?

If you want your Etsy business to be as passive as possible, you’ll want to sell digital products.

Selling digital downloads allows you to create passive income in that you earn passive income in that you aren’t making physical products to order and shipping them to customers. You can create a digital product once, and then sell it multiple times to lots of buyers.

When it comes to choosing a digital product to sell, you have hundreds, if not thousands of options for your business. Printables like wall art and printable planners are common niches, but you might want to explore a niche that’s less saturated like sewing patterns, gift tags, social media templates, or editable templates for checklists.

Want some more ideas? Click here to get my free list of 101 digital products you can sell on Etsy. I’ve even done the keyword research for you and included information about the competition and demand for each product.

How do I get traffic to my product listing?

The key to making passive income as an Etsy seller is to take advantage of the 95 million buyers coming to the marketplace annually. You do that by getting found in Etsy search.

The search algorithm consistent of a ton of factors. Click here to learn more about the algorithm as a whole.

The biggest parts of the algorithm that you want to plan for include your product lines and your search engine optimization, or SEO.

Product lines are groups of similar products that you sell in your shop. For example, a buyer looking for baby blanket knitting patterns is going to be interested in more blanket patterns. Those are the same product line. They probably aren’t, however, going to be interested in digital wedding invitations. Those are made for a different buyer and are a different product line. Those two products are not interchangeable to one buyer. Click here to learn more about product lines.

Your search engine optimization is the keywords that you choose, and how you formatted those keywords in your Etsy listings. Click here to learn more about SEO.

How to stand out in saturated niches on Etsy

One of the biggest hurdles to earning passive income on Etsy, is standing out in a saturated niche. I don’t want you to let this keep you from opening an Etsy shop, because the entire internet is saturated, not just Etsy. That doesn’t mean that new sellers can’t or won’t make revenue.

It does mean, however, that you might want to start selling with a focus on creating unique products and developing new ideas that your buyers cannot get anywhere else.

If there is a specific trend going viral or getting popular, create something that shows your style and take on the trend. Don’t make something that’s similar to every other listing out there thinking you’ll take off.

How can I make my Etsy shop more passive?

If you know, from the beginning that your goal is passive income, you will want to take some steps at the beginning to help set yourself up for success. Here are a few tips for your passive income products:

  1. Create digital products with a low need for customer service.

  2. For digital downloads with a higher learning curve, create a link full of resources for customers to reference when they need help printing or using your products

  3. Have a plan for outsourcing customer service when you’re generating enough revenue

  4. Try Etsy ads when your shop conversion rate is high enough to make them profitable in order to scale your traffic quickly

  5. Find an easy way to watch the trends. Your best-selling items won’t always be your bestsellers. Watch the trends so you can stay on top of them and avoid a dip in sales.

Need more passive income ideas? Click here to get my list of 101 digital products you can sell on Etsy. You’ll get more than a few ideas of digital downloads that sound fun to make and sell.


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About Author:
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Sarah Waggoner is a full time Etsy Seller with over $700,000 in sales. She helps handmade and digital sellers get daily sales on Etsy without all the complications.

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