Gumroad was founded in 2011 by a former Pinterest designer, Sahil Lavingia. The platform was created when Lavingia wanted to sell an icon he designed and couldn’t find an easy way to do it. Gumroad was built over a weekend to help simplify the process of selling digital products online.
What is Gumroad?
Gumroad is an ecommerce platform for selling digital products online. The platform allows you to sell books, memberships, courses, and software. They offer specialized features for each product type you can sell. For example, if you want to sell ebooks, you can let buyers choose PDF, ePub, or Mobi as their download options.
How does Gumroad work?
Gumroad works by allowing creators to upload their digital products to the website. They can choose from digital products, courses, ebooks, memberships, or bundles. Creators will need to set a price for their product. They will also need to customize their website to add their logo and other design elements, creating a branded website. Creators can use their newly created URL to promote their products on social media, helping them make more money online.
What you need to know about selling on Gumroad
One thing you need to know about selling on Gumroad is that it’s considered a very expensive platform in the ecommerce space. Charging 10% plus $0.50 per transaction is more than double what other platforms in the same space are charging. When you’re selling digital products online, you’re putting in hard work to create and sell products, and you deserve to keep more of your revenue in your pocket. There are Gumroad alternatives that offer much better pricing and more features.
Gumroad also has a marketplace where you can sell your digital products, similar to Etsy or Payhip. However, Gumroad charges a 30% transaction fee on each sale made through its marketplace. Some platforms don’t even charge any fees to allow you to sell on their marketplace. These high fees eat into your revenue potential, reducing your total earnings from the platform.
Gumroad also has many rules against selling physical products on its platform. For example, dropshipping someone else’s products is against their terms of service. You also can’t resell ebooks that you have the reseller rights to. It’s even against their terms to sell jewelry, one of the most popular items to sell online. Their strict rules about what you can’t sell aren’t standard, since food and beauty products are commonly sold on some of the most popular ecommerce sites. If you’re looking to sell physical items, you should consider an alternative platform that’s more accepting of allowing most product types.
Gumroad has delayed payouts once you start getting sales. While most platforms have instant payouts, Gumroad only pays out customers every Friday. To receive an instant payout, you’ll need to pay an additional 3% transaction fee, capped at $10,000.
Another thing to note about Gumroad is that they don’t refund fees if a customer refunds an order. So that 10% transaction you paid them, they’ll still keep, causing you to experience a loss from the sale. Plus, there are payment processing, marketplace, and affiliate fees that also aren’t refundable. So, if a customer refunds a marketplace order, they’ll still keep that 30% transaction fee. Overall, even when customers request a refund, they keep their share of the earnings.
Is Gumroad the best platform to sell products?
No, Gumroad isn’t the best platform for selling products online due to its 10% plus $0.50 transaction fee. The best platform to sell products is Payhip, which charges a 5% transaction fee per sale and no additional fees for inclusion in the Payhip Marketplace. This platform also has instant payouts via Stripe and PayPal, unlike Gumroad, which typically pays every Friday. In addition, they allow you to create a storefront with customizable themes and pages rather than just generating a checkout page to sell. To start selling products online, sign up today.