Digital products, unlike physical products, have little to none variable costs for each item sold. For most cases, there are also no shipping/delivery consideration for digital products as they are delivered instantly by Etsy.
So the main differentiators come down to price and design.
Here are some ideas for your digital product to command a higher price:
Having different price points in your shop are very beneficial. A higher-end option can be one with better materials, more intricate design and a higher profit margin. And the lower-priced product can have a simpler design with fewer features.
Doing this can help you reach a wider customer base who is looking for various price points, including customers who love a bargain or those who don’t mind paying for quality.
The different priced products can also help act as ‘anchors’ for each other. This is also known as ‘price anchoring’. For example, your mid-priced item can look more reasonable, or even a bargain, next to the premium option.
You can do this in two ways: Either offer two separate products, or put the various price points as variations in the same listing if they are closely related.
There are some rare cases that you can’t charge much higher than market prices.
An economics theory - Price Elasticity - can help explain why sometimes charging a higher price can lead to losing most customers. Read more about price elasticity here.
A product with high ‘price elasticity’ means a small increase in price will lead to a big drop in demand. They are usually products that are near-identical to each other, which makes it harder to differentiate with each other.
There are not many Etsy products that fall in this category. Some rare examples include certain craft supplies if they look exactly the same. For example, a ball of cotton yarn sells for very similar prices across different shops.
The chance is, your shop doesn’t fall into this category, but if you do, here are some ways to lower your cost while price your products competitively: