What am I missing about Gumroad?
Gumroad seems to be an expensive option for hosting online content. But I see so many people using it, leading me to think I'm missing something.
Sure, they have no monthly fees, which they make a big deal about on their website. But this translates to giving up long-term value. A quick calculation will show just how big a chunk of earnings you're giving up.
(I made a quick spreadsheet to calculate fees assuming a standard product price. You can play around with it here)
They show their fees to align with Stripe's fees on their comparison table. Well, after $1m. That's a huge number! I'm also unsure how international customers will get around having to use PayPal or Stripe in addition to Gumroad. Maybe someone can clarify? (I'm currently paying 4.4% transaction fees on PayPal payments and 2.9% on Stripe for another service.)
I don't know of any like-for-like competitors, but I think there are better options for providing content online. Ko-fi has a storefront which allows you to sell items with zero fees if you upgrade to their gold tier for a paltry $6 per month. Even if you're on their free tier, the fees are only 5%. Systeme.io allows you to sell courses with no transaction fees on their free tier. I'd say Systeme.io is more comparable to Teachable and Thinkific rather than Gumroad, but there is room for them to grow into the same space.
Make no mistake, Gumroad is a great company. The visual aesthetic is not for everyone (or maybe I'm speaking for myself-the garish colour schema and that font don't do it for me). But they've built a super successful business and must be highly commended. I also have great respect for their company values. They're not chasing 'growth at all costs' and their focus on transparency is admirable.
It seems to me, however, that their business is ripe for disruption. I think we may see those fees coming down drastically in the near future.
Or maybe I'm missing something?
[Update: I missed that they act as a Merchant of Record in some jurisdictions, which can be quite helpful for tax purposes]
Gumroad has a high trust signal. If you think about it, their fees seem high only when you start earning more than $500K+. 99% don't reach there.
Most of the creators are optimizing for the trust signals that their product can give out (consciously or subconsciously). Saving a few bucks on revenue of 1000 or say 10K doesn't make sense. Gumroad is a marketplace and once marketplaces hit the scale they keep getting sticky.
You’re not wrong to ask the question. I was thinking the same thing. I think brand is important here. Just like with other marketplaces like Etsy, or eBay, Gumroad will have their own unique audience primed to buy the sort of products sold via their website.
Gumroad has strong brand and story behind it, so many people identifies with their story. Most of users know what is Gumroad, so they feel secured when buying stuff trough Gumroad. Currently I use Gumroad for my 2 projects.
Recently discovered lemonsqueezy.com, seems very good to me.
P.S. There is also great blog by Sahil, founder of Gumroad: shl.medium.com
Yeah, it's interesting how far brand recognition goes. Are you considering moving or are you happy with Gumroad? lemonsqueezy.com looks great - I particularly like that Currency Localisation feature.
I think the strong story behind Gumroad attracts a lot of people to the brand. I remember reading 2 of Sahil's blogposts, especially the one about his reflection on his failure to build a unicorn. The story and his lessons really stuck with me. Naturally, when I wanted to start selling stuff online, I turned to Gumroad :-)
One thing that's left me a bit stunned is that my product sells a lot more (90%) on Gumroad than Github (using Sponsors). And there's hardly a more trusted website than GitHub for developers.
That's an interesting insight.
I guess ~95% of some earnings is better than 100% of no earnings 😅
I don't think they are ready for disruption because they are not swimming in money so doing it cheaper would require even higher volume than they have.
I say good luck!
It's not incorrect of you to pose the query. The same thing occurred to me. Brand is crucial, in my opinion<a href="https://classicgolfclub.net/best-golf-hunting-rangefinder/">.</a> Like other marketplaces like Etsy or eBay, Gumroad will have a specific audience ready to purchase the kinds of goods offered on their website.
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