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Real profit on downloads — no shipping.
No materials, no shipping, no inventory — digital products keep the per-sale math clean: price minus Etsy fees, times volume, minus your monthly tools. The margin per sale is high, which is why volume matters more than squeezing the last dollar of price.
The trap is the tool stack: $20 here for mockups, $15 there for fonts, and suddenly you need 40 sales just to cover software. Keep tools lean, price with the pricing calculator, and let volume do the compounding.
Yes — every listing, digital or physical, costs $0.20 per quantity sold, plus the 6.5% transaction and processing fees. Digital just skips shipping and materials.
Design software, mockup subscriptions, font licenses, scheduling tools — anything monthly that exists to run the shop. One-time purchases don't belong here.
It varies enormously by niche and listing count. New shops often start at a handful; established digital shops do hundreds. Use a conservative number — hope is not a forecast.
Yes — digital product income is taxable income like any other. Etsy collects sales tax/VAT for buyers, but your income tax is on you. Set aside a percentage of profit.