Gumroad is going to increase its fees to 10% for everyone Jan 31st.
Gumroad made a sudden announcement that they're going to increase their fees to 10% for all creators.
If they sent out an email blast, I missed it, but I came across it on Twitter.
Apparently, they decided that the current pricing model was "too generous".
This means that if customers use PayPal, you can end up paying 15% per transaction.
If you sell high ticket stuff like me, e.g. $1K+ products/services, that's $150...
So heads up to people using Gumroad.
EDIT
Nope, they didn't email it out. Just hidden in SHL's thread.
Trending on Indie Hackers
Looks like most folks started receiving the email this morning and my Tweet blew up yesterday.
Here are 9 Gumroad Alternatives to help anyone get started asap
PayPro Global
cheers
BuyMeaCoffee also has membership features. I found it best, because they offers multiple payment service.
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.
I was actually wondering about that very question so I did some digging... Took a while but was able to uncover it.
Turns out it's a highly pure, incredibly refined version of crystal meth.
I'm almost in the same boat. I'm in the 5% tier. But I sell high ticket. (1.5K) So with the new fees 13% if a customer uses Paypal, I'm looking at almost 20%.
So we're talking about $300 per sale. Politely, whilst channeling my inner Bernie Mac, they can suck deez motherfucking nuts!
😄 Thanks for the laugh
Nederland boiiiiii
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/
I don't think gumroad is a merchant of record either. From what I can see in their help docs they only do the sales tax for Australia, the EU, UK, and sometimes the US (if the sale came through their marketplace). The rest of the time the sales tax is your problem.
They are for me being from EU. I only invoice them, nobody else.
Depending on what you sell you may need to pay sales tax where your customer is located, not where you or your business is located. I hope that doesn't apply to what you sell!
I think if I only had to deal with one sales tax jurisdiction I wouldn't need a merchant of record as it would be straightforward to deal with the sale taxes. The benefit of a merchant of record in my view is dealing with international sales tax for me.
I think you don't get it.
I only ever invoice Gumroad so the only tax I am concerned about it the one for the Gumroad invoice. Gumroad is my only customer.
They deal with international taxes and I only invoice them.
Ok, as long as you're sure 👍
It's not the impression I get from their help page
https://help.gumroad.com/article/121-sales-tax-on-gumroad
I think you are technically right, they don't handle every country in the world. They are merchant of records for the regions stated, thought.
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.
If you were making less than $10K, it was 7% if I understand the chart right.
So $1K used to have $70 fee, now it's $100. Up to $10K, $300 in fee wouldn't motivate enough people to move away. Find a good alternative, change all the underlying connections. Update all the previous marketing materials. Message all the active/stale subscriptions to renew. They'll lose more than $300/month if they try.
Believing top earners doesn't have a special deal is just naive. However I wanna befriend with anyone making $1M+ and paying $29K for a third party payment processor.
Numbers from 2020 They were milking the right category so far. Top earners were basically their brand ambassadors to lure the rest. If now there is a higher number in the middle band. They need to lose more than half of them for this move to hurt them.
Epic apple style marketing.
Appreciate your insight as always Rusted.
I'm in the 10-100K bracket so for me it doesn't make any sense.
I moved over my $11K consulting recently just to have everything in one place and that amount of money is just silly.
Also, it's not 10% cuz they now exclude payment fees, that's just what they take. SO it's already 13% and then if the customer uses Paypal, you're looking at 15-20%.
If people sell eBooks, then it may not be a huge deal. But if they sell big ticket items around $1K or more, it starts to become very unattractive.
last time they changed their pricing, only few sellers were complaining.
I guess they was thinking the new pricing will don't make such noise...
even with all their great features, I will move to an other platform because gumroad is only a processor for payments. so loosing 10% and more only for a processor is huge. paddle or chargebee are great
Plus it's not just 10%. They also don't include other fees anymore. So 10% is JUST what they take. So you're looking at 13 if people buy via GR or 20ish if they use Paypal in total.
No need to be stuck with Gumroad's increased pricing!
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Glad I'm using Paddle for my main product. This seems to be a great move to lose your customers.
Does it work for you well?
Have you considered Stripe?
Yeah I'm pretty happy with it. I can't use Stripe here in Iceland but like someone below said, they handle taxes and simplify stuff a lot for me. I would have to pay my accountant a lot more if I used Stripe or similar.
Paddle handle taxes. Technically they act as software reseller.
Oh so Stripe doesn't have this functionality?
No, I think Stripe Tax only tells you where/how much you need to pay
How do people use stripe? Do they hire someone to deal with all the taxes in all the countries?
I am not sure TBH, I suspect many are non-compliant
There is usually like a $20,000 limit in each country before you have to report VAT, so most only do that much in like one or two different countries, so they don't have to report it.
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