Gumroad Fees: What to Watch Out for & Whats the Alternative?

Gumroad enables creators to sell digital products from e-books and music to art and software, directly to their audience. Launched in 2011, Gumroad provides tools to help users upload their products, set prices and share them with customers through unique links. It’s designed with an easy to use user interface, enabling anyone to start selling online. On top of that, it cuts out the need for a third-party marketplace, connecting you with your customers.

In May of 2024 alone, Gumroad received 30.27 million visits, making it a high traffic eCommerce platform for your business.¹

Let's break down everything you need to know about Gumroad fees as a seller.

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Gumroad Fees: A Full Rundown

Gumroad charges fees to use its platform. Understanding Gumroad fees is crucial for any potential seller.

Here's a breakdown of the main Gumroad costs to watch out for:

How Much Does it Cost to Sell on Gumroad?

The cost to sell on Gumroad depends on your sales volume and whether you take advantage of boosted rankings.

Here’s a scenario to understand how Gumroad fees work. If you make $100 USD in sales, your fees will be:

• Transaction fee (10% of $100): $10 USD
• Credit card processing fee (2.9% + $0.30 USD): $3.20 USD
• Total fees: $13.20 USD

That means you’d keep $86.80 USD.

If you were to boost your product rankings and pay the minimum Discover fee of 30%, your total fees would rise to $33.20 USD, leaving you with just $66.80 USD.

The more you sell on Gumroad, the more these fees begin to add up.

Other Gumroad Fees to Consider

Besides the basic Gumroad fees, there are a few other Gumroad costs to be aware of:

• Currency Conversion Fees: If you're selling to customers in different countries, Gumroad charges a currency conversion fee.⁵ All transactions are processed in US dollars, so if you sell in another currency, Gumroad will convert it to USD at the time of the transaction. The exact fee for this conversion depends on the rates set by Gumroad’s payment processors.

• Payout Fees: Depending on how you receive your payouts (PayPal, direct bank transfer or Stripe), there might be additional fees to withdraw your money.⁴

Do People Make Money on Gumroad?

In 2020, Gumroad sellers generated a total income of $142 million USD. The earnings breakdown was as follows:

• 8 creators made a minimum of $1,000,000
• 179 creators made a minimum of $100,000
• 1,853 creators made a minimum of $10,000
• 7,945 creators made a minimum of $1,000
• 20,591 creators made a minimum of $100
• 45,917 creators made under $100⁶

And in the third week of May, 2024, alone, Gumroad creators are said to have earned $3,129,297.⁷

Overall, creators do have the potential to earn an income on Gumroad. How much you earn will depend on the success of your sales and marketing strategy.

How to Get Paid on Gumroad

How you get paid on Gumroad depends on the country you’re located in.

If you’re operating in one of the following countries, Gumroad will pay you via a direct deposit bank transfer.

• Argentina
• Australia
• Austria
• Belgium
• Bulgaria
• Canada
• Chile
• Colombia
• Costa Rica
• Croatia
• Cyprus
• Czech Republic
• Denmark
• Egypt
• Estonia
• Finland
• France
• Germany
• Greece
• Hong Kong
• Hungary
• India
• Indonesia
• Ireland
• Israel
• Italy
• Kenya
• South Korea
• Latvia
• Lithuania
• Luxembourg
• Malta
• Mexico
• Morocco
• Netherlands
• New Zealand
• Pakistan
• Peru
• Philippines
• Poland
• Portugal
• Romania
• Saudi Arabia
• Serbia
• Singapore
• Slovakia
• Slovenia
• South Africa
• Spain
• Sweden
• Switzerland
• Taiwan
• Thailand
• Trinidad & Tobago
• Turkey
• United Arab Emirates (Business accounts only)
• UK
• US
• Vietnam

You’ll need to provide a valid, government-issued photo ID and proof of residence within the country to get paid. If you have a bank account in a different country to your country of residence, you won’t be able to receive payments into it.

Depending on the country and bank, direct deposits can take anywhere from 2 to 7 business days to process.

If you have a Stripe account, you can connect it to Gumroad. You can receive credit card payments directly into your Stripe account, making for faster payout times. You can connect your Stripe account to Gumroad in all countries where Stripe is available, except for Brazil, India, Indonesia, Malaysia, Mexico, Philippines and Thailand.

If bank transfers aren’t supported in your country, Gumroad will pay you using PayPal. PayPal payouts are processed within 1 to 3 business days and are paid in USD. Keep in mind that PayPal may charge additional fees for receiving money.

Gumroad doesn’t support other payout methods such as Payoneer, Wise, checks, money orders or wire transfers.

No matter how you get paid, Gumroad uses a fixed payout schedule that means you’ll get paid every Friday.

What Currency Does Gumroad Use?

Gumroad processes all transactions in United States Dollars (USD). If you sell to customers who pay in a different currency, the amount is automatically converted to USD at the time of the sale. This means that as a US seller, you’ll always receive your earnings in USD, regardless of where your customers are based.

You can then choose how to receive your payouts in a way that best suits your needs, whether directly in USD or converted to another currency via platforms like Stripe or Wise. If you want to convert your earnings to another currency at the best possible rate, one strategy is to receive payments via Stripe and then transfer them to Wise Business. From there, you’ll be able to convert your funds to different currencies at the mid-market rate.

Gumroad Alternative: Are Etsy Fees Lower Than Gumroad Fees?

Etsy is another popular eCommerce platform for selling creative products.

Comparing the cost of selling on Etsy to Gumroad fees is essential to determine which one is more cost-effective. Etsy’s fee structure includes the following fees:

• Listing Fee: $0.20 USD per item listed
• Transaction Fee: 6.5% of the total sale price (including shipping)
• Etsy Payments Fee: 3% + $0.25 USD per transaction⁹

To illustrate the cost difference, here’s a fee scenario on Etsy. If an Etsy seller would sell $100 worth of digital products, they’d pay the following fees:

• Listing fee for one product: $0.20 USD
• Transaction fee: $6.50 USD
• Etsy Payments fee: $3.25 USD
• Total fees: $9.95 USD

That means they’d take home $90.05 USD.

The same seller selling on Gumroad would pay a total of $13.20 USD in fees, leaving them with $86.80 USD.

While this example makes Etsy seem cheaper, high volume sales merchants should be cautious of Etsy’s product listing fee which can add up. Overall, both Gumroad and Etsy have similar fees. For Etsy, you’ll be charged a total of 9.5% + $0.45 USD per product and for Gumroad a total of 12.9% + $0.30 USD. Etsy’s offsite advertisement fees and its subscription service fees can add up while Gumroad’s Discover fee can also take a chunk out of your earnings.

Just like on Gumroad, if you sell internationally, Etsy payments are often converted to your local currency. However, you can use Wise to receive Etsy payments, saving you on currency conversion fees.

Choosing between Gumroad and Etsy depends on your specific needs as a seller. Gumroad is great for digital products and offers a simple, straightforward way to get started with minimal upfront costs. Etsy is well-suited for sellers who want a marketplace with built-in traffic and are okay with a bit more complexity in fees.

Whichever platform you choose, make sure to consider all the potential fees and how they will impact your earnings. Whether you’re just starting or looking to scale your business, understanding these costs is key to making the most out of selling online.

Sources:

All sources checked September 2024.