It’s no secret that selling and making money online with digital products consistently, especially when you’re just starting can be tricky. Like any small business, you’ll have good and not-so-good months, making diversifying your income SUPER important.

Not only this, but you never want to leave all your “eggs” in one basket by only selling on Etsy because the unthinkable could happen. Your shop could be shut down, leaving you with no income source. This makes diversifying your income critical to protect you and your family’s finances so you’re not left without a solid income source. 

Plus, diversifying your income only gives you Way more opportunities to make more money each month!

And running an Etsy shop is running a business. As any successful business owner or freelancer will tell you, having only one client is a recipe for disaster and is sure to give you anxiety at one point or another.

This is why you and all digital entrepreneurs should diversify their income streams. Multiple revenue streams reduce stress on you because if your Etsy shop doesn’t have a great month, it’s okay — you’re still making money through other income sources. 

Now, for some people, this looks like continuing to work a day job, maybe freelancing, or selling digital products alongside another business model, like coaching or content creation. All of these are really great options and something I do 

However, if you’re dedicated to becoming a full-time digital products business owner, you can still diversify your income effectively without going outside the digital products world. Here’s how.

(This post may contain affiliate links, and you can read the full disclosure here)

1. Build an Email List

An email list gives you direct access to your customer base, AND you don’t have to rely on Etsy or a third-party platform like social media accounts to connect with your customers. Nobody can take an email list away from you, so if the absolute worst were to happen tomorrow and your Etsy shop went down, and Facebook and Instagram closed down, you’d still have your customers’ emails. 

Plus, an email list is very lucrative for announcing new products, social media platforms or websites, and sales, which can increase your revenue overall. 

Customers who have chosen to sign up for your email list are also “warm leads” because you’ve already piqued their interest in your products, and they’ve probably bought from you before. All of this means that it’ll be easier to convince them to purchase a product or service from you compared to a “cold lead,” aka a stranger coming across your products for the first time. 

Plus, email newsletters give you a competitive advantage over other Etsy sellers. Instead of relying solely on the algorithm, you can directly reach your target market and keep your products fresh in their mind. You’ll also gain new insights into what your customers are and aren’t interested in. Many email providers provide you with analytics and your open rate, and you can even track what percentage of email readers are clicking on included links to see what is and isn’t appealing to them. 

Now, if you’re not a fan of writing, that’s okay. For starters, email newsletters are notoriously short — the ideal one is about 20 lines of text or 200 words (about two paragraphs of text). I recommend batching your work as much as you can, so sit down one day and write out four newsletters at once. Once you’re in the flow of things, the ideas will just keep coming, and it’ll go much faster. Plus, you won’t have to worry about writing a newsletter the day before you plan on sending it out. 

You can also brainstorm a huge list of newsletter ideas ahead of time so you’re never stuck not knowing what to write. Think holidays, sales, product launch announcements, and even behind the scenes information about your product creation process (this creates a fantastic connection between you and the reader so that you’re more than just a business, but an actual living, breathing person creating these products!) 

I recommend an email newsletter creator like Everbee because you won’t need a domain or hosting and it’s one of the best low-cost options out there. I use Everbee to build and send my emails weekly with great images of new designs I’ve released and special sales or discounts

2. Have a Website and Create Your Own Digital Product Brand

I STRONGLY recommend launching a website and, by extension, a digital product brand. In addition to my Etsy shop, I run BaileyTumblerDesigns.com where customers can purchase my tumbler designs and sign up for a membership with over 7,000 included designs, business training on selling sublimation products on Etsy, and exclusive member-only designs not available on my Etsy shop. 

Not only does this website protect me in the case of my Etsy shop being banned, but it also gives me another place to sell my designs to customers and entice them to sign up for a completely different revenue stream of mine (my membership program) which has created a stable, predictable recurring revenue. Since I use Etsy to essentially gather new customers and introduce them to my designs, a large percentage of them join my email list or FB group and usually join the membership.

This has allowed me to step back from running a large ad budget on Etsy, worrying about the algorithm and competition & copycats :) It’s also allowed me the freedom to start other businesses back in the POD and handmade space with a new brand. 

While you can create a website solely as a way to establish your digital product brand and sell products as a backup to your Etsy shop, I recommend brainstorming other ways to build additional income streams through your website. 

Other popular options among Etsy sellers include coaching others when you have a successful shop yourself, you could offer custom work.

An example of what I do, is how all of the equipment and supplies and inventory for everything I use in my tumbler business and as a result I earn affiliate income by just sharing what I already use which then creates another stream of income.

Building a digital product business, for most of us, is all about earning extra money (maybe even more than our current day job) and living the life we dream of — which, for most of us, isn’t being glued to our computers 12 hours a day. 

So creating additional income streams by not putting all your eggs in the Etsy basket helps you reach your financial goals faster by leveraging additional income streams and protects you from the worst-case scenario of losing your hard-earned Etsy shop. 

In other words, there’s absolutely no downside to expanding your business by launching a website and social media accounts. Will you need to dedicate a little extra time and money to web hosting fees? Yes, but you’re getting peace of mind and additional revenue streams which can be invaluable in the end

3. Second Best Case: Sell On Other Platforms

If the idea of launching a website is overwhelming or too much for you to juggle now, I completely get it. Instead, start by diversifying your income by selling on other platforms like Creative Fabrica, Creative Market, or Gumroad. These platforms share many similarities with Etsy, allowing you to reach new markets and financially protect yourself. 

However, keep in mind that each platform has its own rules and fees. Do your research before selling on any of them to ensure you are compliant and not violating the platform’s policies before listing your products. 

A final tip — maintain consistent branding when selling on other platforms. Keep your colors, messaging, fonts, logo, and more consistent across all platforms. 

Consistent branding builds brand recognition and trust with your audience, making it easier for customers to identify your products and feel comfortable purchasing more from you. For example, you don’t want to have the same shop name on Etsy and Gumroad, buy sell gifts for moms on one and gifts for teachers on the other. 

As a business owner, you never want to leave your eggs in one basket, especially in today’s economy. Algorithms can change, Etsy’s policies can change, and so many other things can impact your Etsy shop’s sales, so expanding how and where you sell your products is a smart business move that I really don’t recommend you ignore.

Ready to elevate your Etsy shop to new heights? Explore my signature coursemunity, "Digitally Purposed: The Digital Product Profit Formula". With step-by-step guidance and weekly trainings on relevant topics, this course and community equips Etsy sellers with the tools they need to reach $10K+ per month in their digital product business, just like I did.