Gumroad price change is a huge disappointment for thousands of builders.
Gumroad price change is a huge disappointment for thousands of builders.
I have been using Gumroad for various products like Micro SaaS HQ , sponsorships, Info products, sometimes for LTDs for SaaS.
9 Gumroad Alternatives to help you get started asap
- Lemonsqueezy
- Flurly
- PayTable
- ConvertKit Commerce
- Sellfy
- PayHip
- BuyMeCoffe (Donations)
- Ko-fi(Donations)
- Stripe
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As a seller in the 3% tier I’m now paying around 750 USD per month in fees.
This is going to 3250 USD / month in February. Around 40K a year. I don’t know what they’re smoking.
Is it worth 30K to code a new backend connection to Paddle / Lemon Squeezy? Hell yes it is. I could even hire someone to do it for that money.
The most annoying thing is that they’ll take 13% of active subscriptions as well but you can’t raise the price of an active subscription so I’m going to have to try and move all my customers over somehow.
To announce all this on Twitter, on a Saturday, right before Christmas, ignoring every customer that isn’t in the 9% tier, is just reckless.
Hey Rik, I'm in the same situation you're in.
The wonderful thing is that, consumers being the way they are, you know you can expect churn when you're moving those memberships.
Really shitty thing to do IMO. Why not just grandfather old users... Esp. if you believe in growth.
There is no way you can move without any action from customer side. During the movement when you cancel Gumroad subscription and ask customer to take the subscription on XYZ platform, there are high chances of losing the customer. Isn't it? Am I missing something? Any better way.
For now, I am planning to take all new subscriptions on LemonSqueezy and prevent the new leaks atleast
No automated way.
Thinking of offering a small discount on first renewal year at new service (paddle or lq) to compensate for the trouble and of course to get customer to make the move.
Big customers I can reach out to manually and explain the situation.
That would be a nice move.
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I thought this article is about Gumroad alternatives, isn't it? I'm here to help anyone who is interested.
Gumroad has become one of the biggest disappointment of the last few years. After the awful redesign that forced everyone who “wear the same clothes” and have their brand everywhere, now this.
They fail with improving their discovery engine, they fail with having PPC (as Shopify did), and they also fail with expanding the review section and adding text reviews along with the star review.
It’s like they were on vacation i the last year or even more.
Almost feel the same. Their tagline is hurting more than the price itself.
"We want you to live a better life, not focus on fees. That’s why we have no monthly charges and only take a small cut of every sale."
The worst is their support. When Gumroad has a bug and your customers are actively complaining to you that they cannot access their purchased products, it can take 24+ hours to get an initial response from Gumroad and sometimes a week for the bug to eventually be fixed. Unacceptable if you build your livelihood on a platform.
There are several alternatives but not all act as a merchant of record. I am documenting such platforms here:
https://nts.strzibny.name/gumroad-alternatives-eu-uk-vat/
Hi! I wanted to suggest Mini Course Generator. (I work here) It's not exactly a sales tool but you can get payment with your own Stripe account with direct integration, I suppose this would solve the invoice. We do not receive any payment from your sales, so we do not have a billing system directly on us, but we do not have any commission either!
If you want to take a look, I've written a blog post about Gumroad vs MCG and also a video: https://minicoursegenerator.com/blog/gumroad-vs-mcg/
https://youtu.be/cdDSbvnfCXI
Ask me anything!
Best
No, it doesn't solve anything, since you have to do your own taxes and handle EU VAT.
Would you consider adding mobilzer.com to the list?
Here is how we compare to Gumroad https://www.mobilzer.com/mobilzer-vs-gumroad-best-platforms-for-selling-digital-products/
Do you handle EU VAT? I haven't find the information on your web.
We handle country specific tax where you can enter the percentage taxed on all products. We currently handle single tax rate across all sales, we do not yet have multi VAT rates.
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Let this be a warning for those that rely on no-code platforms for their apps.
"not yo code, gonna feel the pain like @gumroad"
I've always sensed that Sahil was not genuine in his desire to build a small company without a billion $ valuation. He talks about it incessantly in his article when his previous startup went bust. However it's hard to bury that desire if that is what you want. My take is that gumroad isn't making any money and now that easy money has dried up he's forced to increase prices especially after hiring Twitter influencers that were costing him $10k/month.
Yeah, I am aware of the back story, his article and the mess.
What is the source for this information?
Instead of spending my time with my family during xmas, I'm scrambling to evaluate a suitable alternative. I'm 90% sure that I'm going to go with Lemon Squeezy. I don't want to deal with sales and VAT taxes.
Folks, I have a question for all of you. Why the heck do you use them? Besides crappy pricing, Gumroad has an awful, disgusting design, is it worth it? Sorry, I just don't get it and can't believe there are no better solutions.
If sales for your digital product is low, gumroad might still be a better option just because of the brandname and recognizability within the creator economy. If you are a top 1% creator then finding a better alternative is probably better because you would be giving up a lot of money.
I feel the same way.
Looking for alternatives right now.
I'll have to re-write the whole Gumroad API integration regarding license validation, customer management, invoicing, refunds, etc.
But I prefer spending a month doing that (or hiring someone to do it) than increasing my payment from 2.9% to 13%.
It just doesn't make sense to me.
I'm happy in Gumroad; it makes my life easier, especially with taxes. But there are also things that I miss in Gumroad and that other platforms provide too. (Flexible pricing for subscriptions, parity pricing, currencies management, one-time subscription offers, payments through transfer... )
I can't see any huge improvement in Gumroad to justify such an increase in my spending.
The timing of the announcement is terrible too.
Not enough notice time and just before Christmas.
I decided today to start building an alternative,
we will have a 30cent + 2,5% fee for launch sellers, if anybody is interested to sell their digital goods, send me a msg
we are EU based, so will take care of all VAT hassle
How can you assure your users that you won't eventually pull what Sahil pulled here?
its all about keep your costs down ... but in the end there needs to be a profit to make. so if everything is automated and there is no fraud , there is no need to make the price high
Can you just decide to be a MoR? Don't you need some kind of credentials?
you need to follow a number of guidelines , being a market place has legal requirements indeed
Can we replace Gumroad with Webflow + Memberstack for subscription based businesses?
Hi! I work for MCG, which can be a very handy Gumroad alternative especially in terms of cost advantage. Here is more to read if you're interested: https://minicoursegenerator.com/blog/gumroad-vs-mcg/
And here is the YouTube video I filmed about the comparison of Mini Course Generator vs Gumroad: https://youtu.be/cdDSbvnfCXI
Would love to hear feedback from creators!
Well now they tell you they removed the 10% discover fee, sounds great right?
Well when you enable discover it will also enable the global affiliate program which can't be disabled when discover is active.
So in that case you will be charged an extra 10% for each affiliate purchase.
Gumroad should change their name to Greedy!
Consider trying us mobilzer.com
Here is how we compare to Gumroad https://www.mobilzer.com/mobilzer-vs-gumroad-best-platforms-for-selling-digital-products/
Bummer... I still like their website design tho!
Another (donation) option to add to your list is www.wishlist.fund
Here is a nice list of 40 alternatives to consider, if switching from Gumroad.
https://asifbasheer.com/best-gumroad-alternatives-to-switch-to/
Would you consider adding mobilzer.com to the list?
Here is how we compare to Gumroad https://www.mobilzer.com/mobilzer-vs-gumroad-best-platforms-for-selling-digital-products/
that net rate looks really low ?!
For me the only benefit of using gumroad is that they handle taxes for me. Otherwise for the platform features any decent developer can make a similar one person solution to sell his products in few hours and handle the payments via stripe, PayPal or paddle
This is one of those instances where I think (hope) they will catch wind of creator disappointment and roll back or reduce the fee, especially if creators move platforms.
I think if creators started to move to another platform, they will never come back or at least very hard.. cost of transfer (time/effort/money) is already spent to move
As an operator of a competitor, I understand first hand the challenge of keeping platform fees low while still staying in business ourselves. I can confirm it's a hard problem to find the right balance, but believe it's easier when your team is small.
Has Gumroad become too big and requires too much to keep its operations going? To date we've been more focused on providing web3 and alternative payment support, but perhaps we should look at addressing Gumroad head on, especially given this news. (Would love to hear thoughts on this)
We chose to keep our team right-sized (all in we're under 10 people), so that we can do things like offer 0% fees. Could it be that this is one thing small business does better than a large corporation / platform?
If interested, Monetized (https://www.monetized.link) is technically an alternative for Gumroad, although we are going after the content creation part of the market as we're ex-content creators (background: Condé Nast, Fast Company, Indie publishing).
If anyone wants help migrating I'd be happy to lend a hand. 😀
It's becoming a trend these days. When i seen that google and apple will put 30% tax on in-app purchases then it blew my mind. Notice that they don't allow other payment processors than google pay or apple pay. And their own app youtube doesn't come under this rule.
I mean why the hell would i pay you 30% from my revenue for doing absolutely nothing for me?
I worked hard, put my sweat and money and tears to build an app business that can generate some revenue for me. And these suckers like google and apple wants 30% cut from my hard earned money? Why the hell are we even allowing this shit to happen. Government is sleeping. We are living in insane world.
You're using their platform. If it didn't exist then your app wouldn't exist either. They also spend millions per year to maintain the platform. Finally, you can build PWAs if you would rather not pay the 30%
They are already making billions from running App Store ads. They dont need a 30% commission to sustain their app store.
First you give them money to promote your app in App Store and Play Store. Then again you pay them money to when you earn money from your ad investments. insane.
To be fair while I hate the imposed 30% tax, I'm not convinced that they "are doing absolutely nothing for me". You are essentially using their platform and they provide you with the API and the infrastructure for payments (good luck trying to store credit cards in your DB or making your own payment solution).
Stripe does that too, but for like 3%.
Hmm good point, but most stripe customers are SaaS business , where the revenue is much higher per customer (subscriptions) taking a 3% cut out of a 15 dollar monthly subscription would be very similar to taking a 30% cut out of a 1 dollar app.
yup. but some people are happy to pay 30% commission
What a terrible decision by Gumroad. Rather than elevating creators and putting them in a place they can succeed and build from, they just become greedy and ironically hurting the best/top users.
They offer nothing that can claim a 10% fee. There's already the standard 2.9% for payments, and more than 5%-7% total in fees for any platform is quite outrageous.
(don't get me wrong, an open 2.9% on CC charges is already a steal, it should be capped as well...)
It's probably not a big surprise, coming from Gumroad, but it's still weird these things can still happen.
When you use shady business models, it has to be super clear and transparent, and it must make sense. Taking a % of MRR or revenues from any individual or company should be the last resort. (It would be OK if they had a "free" plan that is based on rev-share or something like that, but once you have more sales, it should definitely be capped to $X per month...)
I know. Their tagline is hurting more than the price itself.
"We want you to live a better life, not focus on fees. That’s why we have no monthly charges and only take a small cut of every sale."
Would now be a good time to start working on a competitor product ? :) I personally never really understood why they charge per commission. If I owned a piece of land that I am renting out to a store I charge rent monthly and not per item sold by the store.
I don't see why it can't be the same way for Gumroad
Many people love to pay based on 'per item' sold especially in early stages.
'You make profit, they make profit' is not a bad model.
Obviously those processing a lot would love a flat fee.
And those processing very little would love a commission structure.
The platform's incentives are obviously flipped (commissions for big users, monthly for small users).
Substack has a similar model, and largely people are ok with it. The creators with larger audiences usually move on to a self-hosted one to avoid not just fees but also the risk of getting banned for some stupid reason.
I read that they only make $50K profit a year. Looks like this is their way of squeezing as much revenue as possible. Could have been done significantly better by not alienating folks that rely on the service. 3% to 15% is ridiculous.
Great list of alternatives. Def a plug but I'd add reetail.store to the list:
$50K profit?? That can't possibly be true right?
sauce
it's $54Kish not $50K, please.
To me that says they're making $54k in net income per month. The rest of the slide is just about November's numbers, so I assume this tweet is also just talking about November, not the whole year.
Also, we don't know what Sahil pays himself. He could potentially be paying himself a very decent salary which wouldn't count towards net income.
Thanks for pointing this out. I matched the numbers didn't go in details. Looking at that image now, it also says November was the record month. Makes it less than $600K/year. More likely way less.
Not sure why Gumroad had so much hype all these day. $54Kish is nothing in most cases. Many sellers on the platform are making more than $10K.
On top of that, Sahil paid dVassalo $10K for 1/4th part-time work for 10 hours per week that ~ roughly equates to $500K per year full time. Not sure how the math was working for Sahil.
That's funny because dVassalo was shit-talking Gumroad about their pricing change recently.
dVassalo worked roughly for a year last year. He isn't working for Gumroad anymore.
WOW... mind blown
Thanks for making LemonSqueezy.com #1 — that means the world to us!
For recommendations, I'd add Paddle. It acts as a Merchant of Record, so they take care of VAT and they offer lower rates than Gumroad, which does not support help in taxing.
People use Gumroad for a lot of other things.
Not allowed on Paddle: Human services which are not related to a software offering (e.g. pure consulting or advisory services, including but not limited to legal advice, coaching, access to a community of experts).
https://paddle.com/help/start/intro-to-paddle/what-am-i-not-allowed-to-sell-on-paddle
But these are allowed on Gumroad and most of the alternatives mentioned in the post.
Thanks for the post about Ko-fi. It actually looks really good.
Does Gumroad have a post detailing the reason behind the price change?
The gave one but people were more irritated at it. They linked a 52 min Youtube video :)
https://www.youtube.com/watch?v=wSwSp2V2XdA
thank you :)
If that was the case, we'd see people sharing where they've moved. Not where they'll move. I'd be surprised if they wouldn't attract more users.
Twitter is full with people sharing where they're moving 🤣
not my twitter bruh. 🙃
Check out the trending section, "bruh" :)
Many made the move already. Many Tweets in Twitter showing that. Even I moved my FounderBeats sponsorship page to LemonSqueezy.
Even LemonSqueezy founders and other founders from similar products tweeted about flux of new customers/queries in the last 12 hours.
link or didn't happen.
27K creators and how many tweets have you seen? I saw the lemon's twitter ad campaign tho. :) Like I said on another post on the same topic. If they lose 15K more people like you are, they'll still be more profitable after the changes.
Probably, let's wait and watch for now. But the point of the original post is just there are some good alternatives :- .
💯 My point was those alternatives were around and they were already better than old/current gumroad. Flurly for example offers almost the same if not more, asking only 1% fee. But people won't follow me or jr, they follow shl or dvassallo.
That's the word of mouth I was referring to EXACTLY. Now, Gumroad will lose on that because top sellers won't recommend it anymore.
Because you draw the comparison with Flurly, FYI - Flurly now withdrew other payout options except for Stripe payout. Gumroad is 10x better with support to a lot of other countries, Paypal, Bank transfers etc. But love Flurly for competing with big players.
" top sellers won't recommend it anymore." in a perfect world, maybe.
the thing about flurly, I live in Turkey with 85M people where the freaking paypal is banned and I have access to Stripe. So that makes Flurly infinitely better not 10x than gumroad which is no use for me.
Wow wait. I never know there are places where Stripe works but not Paypal. Kind of strange. But good for you!! Anyway as I said, Flurly is still a great product.
Honestly, I think the way everyone is reacting is very surprising. This community worries about rising prices and for this reason. Will everyone leave? Will people stop signing up? And we've seen it time and time again, some people will leave, some people may not sign up but these are low-value customers.
Some people are acting like this is the end of Gumroad a platform that has won them chargeback disputes they wouldn't have otherwise won. They've made thousands of dollars through the site's marketplace discovery. Yet the mere mention that they charge more money so they can grow and what not they're off to a smaller product which would need to do the same thing eventually. I suspect, many people who jump ship will probably lose more money than they gain.
Price changes are normal for any product. But this one off is different in many ways.
Rob Walling made an excellent Tweet on why this is a mess.
"hey've made thousands of dollars through the site's marketplace discovery."
Gimme some of that crack you're smoking homie ;p
The top earners will have made good money from the site's marketplace discovery. Most of the site's earners are probably only making a few hundred a month.
Haha, good point!
Beyond raising prices, their fee's were already high compared to their alternatives. Majority of gumroad creators were already on the highest fee tier. 9 or 7 percent and they are the ones going nuts about the news :)
Rob Walling made an excellent Tweet on why this is a mess.
Rob talking about it mentioning "This change doesn't impact me (I don't sell on Gumroad)." I'm talking about it wearing the same shoes. You are writing about it. They managed to pull this without spending a dime on marketing.
I doubt there is a good way to tell; "We are doubling/tripling our fees". What I say is from the business perspective, not the creator side. It's a great move by the business. Even if they lose the half of their creators which won't happen. They'll still be afloat as today with less work/client/issues/expenses.
The recent Tweets and replies from Sahil echos your statement. Gumroad apparently is not making any money out of the high volume sellers. So, even if high volume sellers move out, not going to impact much to Gumroad from revenue stand point.
But the intangible point that is being missed is - These high volume sellers were the primary word of month for Gumroad and drove many users. Now Gumroad will miss that if they just make this move from revenue calculations. But I get it, its not a charity and it's a business. But for the love of Gumroad, it still hurts creators :)
They still make the same money with half of the clients but don't get the same word of mouth for the long run.
shl is muted. But what's the logic behind they don't make any money from the top sellers? Do they don't apply those public fees to them. Are those top sellers already working for the company or affiliated in some other way like an investor or such. If that's the case, is there any reason for them to move out. So nothing changes on the word of mouth part.
Is it possible that a company like gumroad doesn't think, oh wait these guys who makes a million dollar won't pay us 100K for our service.
Nothing much changes for the majority who were already paying 7-9 percent. Gumroad basically went greedy, targeted the mid tier and they'll get what they want.
shl is muted????? Why? 🤔🤔
No. The top sellers are all normal sellers, no way affiliated to the company. For some math, if they are making $10K per month on Gumroad, earlier they have to pay $290 to Gumroad but now they have to pay $1000 to Gumroad and this almost equal to having a full time VA/employee in most cases.
So, Gumroad apparently is absolutely okay if these folks move out.
From Sahil's statements, Gumroad uses Stripe for processing the payment and Stripe is charging Gumroad. So, whatever 2.9% is paid by the seller is actually going to Stripe (roughly 2-3%) but not to Gumroad.
Here is another muted guy.
https://gumroad.gumroad.com/p/q-a-with-daniel-vassallo-head-of-product-and-randall-kanna-head-of-community
Not sure if you are kidding or not. According to the image/chart you shared its 5% up to $99K. If you made $10K you were paying $500. By the top sellers I mean those who makes millions not "peasants". Who listens a guy who quits amazon to follow his dreams and sell those dreams to land on a job on gumroad. 🤣
Sorry, my bad. Right it's $500. But $500 to $1000 isn't small.
You muted Daniel too :)
From Gumroad stats, I couldn't recollect but I guess there were only 100-200 people in $1M club in 2020.
Lol, rofl, anyway he wasn't full time at Gumroad then.
It was 8.
https://gumroad.gumroad.com/p/last-year-in-the-creator-economy
"In fact, the top 1% of creators earned about 60% of the money in 2020. The top 10% of creators earned nearly 92% of the total GMV."
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