Gumroad vs Shopify: Which is Best for Selling Digital Products in 2023?
Last updated: February 23, 2023
Gumroad and Shopify are two popular ecommerce platforms for selling digital products online. You can use either ecommerce platform to create an online store for online courses, digital downloads, monthly subscriptions, or even physical products. No matter what you decide to sell online, you’ll find that you can build a beautiful custom website using Gumroad, Shopify, or another alternative ecommerce platform altogether.
In this article, we’re going to compare Gumroad vs Shopify to help you find the best platform for you to sell digital products.
- Gumroad Overview
- Shopify Overview
- Gumroad vs Shopify Comparison at a glance: Is there a better alternative?
Gumroad is an ecommerce platform where you can sell anything- from software to graphics to cookbooks. You can build an online store with Gumroad or connect your custom domain to the platform to have access to payment processing. You can sell a few products (or a lot!) on your e-commerce store using Gumroad for a 10% transaction fee per sale.
Gumroad Core features
- Payment provider: You can easily embed Gumroad’s payment provider on your existing website to add payments to your current website so you can sell products online. You can also offer discounts and collect VAT as well.
- Create subscriptions or memberships: Some digital products aren’t one-time purchases. Fortunately, Gumroad allows you to set up recurring payments on a monthly, quarterly, biannually, or yearly basis. Bear in mind this isn’t the typical membership that you might be familiar with (more on that later).
- Secure digital products: Gumroad offers piracy prevention features to prevent your proprietary products from being pirated online such as lightweight DRM.
- Create license keys: If you’re selling software, you can create custom license keys for each of your customers to access your products online.
- Multiple file offerings: You’re not limited to certain file types on Gumroad. So, if you sell files in PDF, ePub, or Mobi, you can allow your customers to choose the file type they prefer.
Unlike ecommerce platforms like Shopify, you can run your ecommerce store on Gumroad with no monthly fees. Yup, that’s right! You’ll only pay a flat transaction fee for every sale made. So, if you don’t generate income, you won’t need to pay a dime. Currently, Gumroad charges a 10% transaction fee for every sale. In addition, you’ll also need to pay for Paypal/Stripe fees which are approximately 2.9% + $0.30 per transaction.
Advantages of Gumroad
1. Use your current website
When comparing Gumroad vs Shopify, most people who use Gumroad already have an existing website that they simply connect to the platform to access a payment provider and other cool perks to simplify the process of selling digital products online. While it isn’t an ideal platform for building your own website on, it’s a great choice for people who have a functional website they use and just want to add more features to their current site.
2. Countless education resources from doers
Many ecommerce platforms have an education hub where you can learn from experts who sell digital products. Gumroad has people on its platform who sell digital products and also share their experiences to help others level up. You can learn from other content creators on their blogs. When comparing Gumroad vs Shopify, they both offer educational resources, but unlike Shopify most of the writers on their blogs are their customers instead of their employees which gives the content a different spin. It’s always great to learn new skills from people who have done things like selling digital products, marketing, or creating products.
Disadvantages of Gumroad
1. High transaction fees
Not paying a monthly subscription is a huge win for someone who’s just starting out. But the goal of running an online business selling digital products is that hopefully you’ll continuously grow and eventually be making a lot of money. A 10% fee per sale (without an upper limit) means that your Gumroad fees will increase as your store grows. If you’re making $100,000 per month, you’ll be paying $10,000 in fees!
Bear in mind the 10% fee does NOT include the additional Paypal/Stripe fees of 2.9% + $0.30 per transaction that you’ll also need to pay. These transaction fees could really eat away at your profits. Most platforms that charge transaction fees charge nowhere near 10%.
A 10% transaction fee per sale at Gumroad could make the difference between a profitable business and an unprofitable one. There are platforms like Payhip that charge only 5% transaction fees with no monthly subscriptions (you can also switch to Payhip’s monthly plans when your store grows bigger, so you’ll never pay more than $99/month in fees). So financially, an alternative online platform might be a better fit for you.
2. No store themes and limited store customizations
Most people who sign up for Gumroad already have their own website. But what if you don’t have a website yet? Now, you’ll need to sign up for another platform, build your website, invest in a site builder, choose a theme, connect hosting, and more to use Gumroad once you’re finished. That’s almost too much upfront work when you’re excited to dive in right now.
Compared to Shopify where you can build an entirely customizable website with their drag and drop editor, your Gumroad store will most likely have the standard Gumroad look and feel that every other Gumroad seller has, there isn’t much customization option available within the platform. If you’re looking to create a unique brand aesthetic, you’re better off with other Gumroad alternatives.
It’s unusual for an ecommerce platform with advanced features that accept payments and allow you to start selling products online to not have a theme store to build a website on their platform. It is possible to find Gumroad themes online, but they’re only available through third-parties. Unfortunately, when you purchase a theme through a third-party, you might not find a developer who updates their theme as Gumroad evolves its offering, which could cause issues months or years down the line.
3. Extensively lacking in terms of online course features
While Gumroad advertises as having a feature for selling online courses, it’s not what you’d expect from an online course platform.
Gumroad’s online course feature allows you to upload a video or other files that your students can download or click to watch the video. However, it does not have the essential online course features, such as various lesson types (video, text, assessments, surveys, etc), drip content schedules, certificates of completion, study progress, etc. You wouldn’t be able to provide an engaging learning experience for your students.
Here’s an example of a student’s course experience:
In comparison, here’s what an engaging learning experience should look like (the example below is from Payhip):
4. Extensively lacking in terms of membership features
While Gumroad advertises as having a feature for selling subscriptions or memberships, it’s not what you’d expect from a membership platform either.
Once a member subscribes to you via Gumroad, they’ll have access to a set of digital files that they can download or watch. See the example below:
However, this again isn’t the typical membership structure where you can easily share exclusive content with your members in exchange for a monthly subscription. The interface also doesn’t promote active engagement from your members as they’ll just be downloading content from you without meaningful interactions. If you’re familiar with other membership platforms like Patreon or Payhip, the experience is much different.
In comparison, here’s what an engaging membership experience should look like (the example below is from Payhip):
Shopify is an e-commerce platform for selling physical and digital products online. Shopify caters to small, mid-size, and large enterprise businesses. It has a comprehensive collection of third-party apps, offers unlimited products, and has a whole suite of customization options so you can build a beautiful online store for your digital goods.
Shopify Core features
- Shopify POS: For people selling products in-person, Shopify offers a state-of-the-art POS system to manage offline transactions.
- Unlimited products: On Shopify, you can add an unlimited number of products to your store on any plan making it a popular choice for a small business testing out trending products in an early stage.
- Unlimited storage and bandwidth: You’ll have access to hosting, storage, and bandwidth on Shopify with reliable uptime and no caps.
- Fraud analysis: You can assess whether or not to fulfill orders on your small business based on a fraud analysis tool that’s built into Shopify’s platform.
- Abandoned cart recovery: You can easily build an abandoned cart email funnel to recover lost sales using Shopify without needing to install any third-party apps.
Shopify has five pricing tiers for a merchant account on its platform. The lowest tier is $5/month but only allows you to sell via social media and messaging apps. The highest tier is Shopify Plus which starts at $2,000/month. There are three pricing tiers in the middle which tend to be the most common plans people choose from. Basic costs $39/month and allows you to have two staff accounts. The Shopify plan costs $105/month and you can have five staff accounts. The Advanced plan will run you $399/month but you’ll be able to have 15 staff accounts. Most people start on the platform with the Basic plan and evolve into Shopify or Advanced. Enterprise businesses typically choose Shopify Plus.
Advantages of Shopify
Shopify’s user-friendly interface attracts new entrepreneurs looking to build an online store so they can sell digital or physical products. Your Shopify store can be easily customized by following a straightforward path when using a theme for your site. You won’t need any technical or development skills to build your website making it a popular choice for selling products online.
2. Over 6,000 third party applications
The Shopify App Store has over 6,000 apps that you can use to accept payments, add key features, attract more customers, analyze and track sales, improve customer management, and more. You’ll be able to customize your website in any way with these apps. But be careful, the costs of monthly subscriptions on these apps can add up fast.
Disadvantages of Shopify
1. Expensive for beginners
Shopify is not an affordable option for most entrepreneurs. You’ll likely need to invest in paid themes, paid apps, a monthly fee, transaction costs from payment providers, and more. Keeping costs low on Shopify isn’t easy. And unlike Gumroad, there’s no free plan available on Shopify. Plus, as you scale, the costs of monthly subscription rises. Shopify Plus starts at $2,000 but the cost can be steep for enterprise businesses.
2. More focused on physical products than digital
When comparing the two platforms, Shopify excels at physical products but isn’t ideal for digital products. You can install and use third-party Shopify apps for your own needs as a digital products entrepreneur but that can make the cost of running your business skyrocket. The Shopify platform is built for selling physical products. Many people who run dropshipping businesses turn to Shopify, but sellers of a digital product would likely look to competitors like Gumroad or Payhip.
Is there a better alternative?
When comparing Gumroad vs Shopify as platforms to start selling digital products, you might start wondering if there’s an even better alternative than a Gumroad or Shopify store.
Fortunately, there is.
Payhip is an ecommerce platform that specializes in digital products. That means, you can use the platform for selling software, online courses, ebooks, graphics, or literally any type of digital product. Plus, if you wanted to sell physical products to go hand-in-hand with your digital products, you can easily create product pages for that too.
Here are a few other reasons why you might choose Payhip instead of Gumroad and Shopify.
- Affordable option: Payhip offers generous forever free plan with unlimited access to Payhip’s entire platform. When comparing Gumroad vs Shopify, both of them end up costing sellers a lot. Gumroad’s 10% fee on every transaction has no cap. You’ll never get a discount or a reduced fee even if you’re selling millions of products on your ecommerce store. Shopify charges a monthly subscription and transaction fees. Payhip only charges a 5% transaction fee on its Free Forever plan, but you also have the option to switch to Payhip’s monthly plans so you’ll only pay a maximum of $99/month regardless of how big your business grows to become!
- Fully customizable: Unlike Gumroad and Shopify, Payhip allows you to sell anything but with a twist. There are specialized features just for specific types of products. For example, if you’re creating an online course website, you’ll be able to use a beautiful, native course player for your lessons instead of needing to build a custom course player. If you sell digital downloads, you’ll be able to access security features to prevent piracy, marketing features such as an affiliate system, and offer instant downloads. Those of you who choose Payhip to offer coaching services can benefit from calendar integrations and more. No matter what you sell, you’ll find unique features available for those types of digital products.
- Powerful marketing tools: On platforms like Shopify, you’ll likely need to head to the Shopify App store to access most marketing tools. This means you’ll need to invest more of your earnings on the platform to provide a better experience and more features for your customers on your e-commerce store. On Payhip, most of those marketing features are available natively on the platform. Using Payhip, you’ll be able to offer coupons to your customers, build an affiliate and referral program to help you better sell products, and offer cross-sells and up-sells in your shopping journey. You can also allow customers to leave reviews and approve the reviews you get. Payhip also offers a comprehensive email marketing tool so you can send emails to customers that are GDPR-compliant.
- Unrivaled customer support: Payhip’s customer support team is unlike any other platform. While both Gumroad and Shopify offer comprehensive customer support, you can contact Payhip’s support team anytime and receive a high level of care with your business. Plus, you can easily find their email on their website unlike most e-commerce platforms (in case you’re wondering, it’s: firstname.lastname@example.org). Plus, Payhip offers countless educational resources on their blog and Help Center so you can get the training and support you need fast.
Gumroad vs Shopify: Which should you choose in 2023
When comparing Gumroad vs Shopify, it’s clear that both platforms excel in different areas. Gumroad is a great e-commerce platform for selling digital products if you already have an existing website. Shopify is an amazing e-commerce platform for dropshipping, print-on-demand, and other physical products.
However, despite their strengths, their high costs such as Gumroad’s transaction fee of 10% and Shopify’s expensive monthly subscription can cause entrepreneurs to look for an even better alternative. Payhip’s Free Forever plan offers one of the lowest transaction fees on a free plan you can find online without any reduction in features available. If you’re looking to sell digital products, you can sign up for Payhip for free today.
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