Graduating from Gumroad
Where to look when the fees no longer add up.
This weekend, Gumroad announced it’s moving to a flat 10% transaction fee across all its users.
While this won’t make much difference to smaller user making their first $1,000 online, there are accounts making $10k and more each month for whom this represents the cost of a VA or some substantial ad campaign spend.
This is a good opportunity to take a look at what Gumroad offers to make sure anyone who decides to move isn’t missing anything crucial.
At the same time I’ve made some comparisons with tools I’ve used personally to show what alternatives are out there.
I’ve started by breaking down the main features that Gumroad has:
Payment Processor/Checkout
Gumroad’s core function is the ability to take money off someone via Stripe or Paypal in return for a digital product.
So, why not use one of the many Stripe or Paypal integrations out there?
Gumroad uses its own account to collect money, which means you only have to account for a single source of payments — Gumroad — instead of lots of tiny payments with their own tax issues.
The technical name for this is “merchant of record” — your customer transacts with Gumroad, then Gumroad passes on payments to you. This can take out a lot of headaches compared to using your own credit card account.
LemonSqueezy and Teachable do this, and I’ll explain the differences as we go through the rest of the features.
Shopping Cart
Just like the grocery store, the cart is the step before the checkout, where you gather up your products.
For digital products, this is a bit redundant as you tend not to wander round a store picking things up as you go. It’s much more focussed than that.
What you do have is the equivalent of the candy and trashy magazines at the checkout. Last minute purchase items that can increase your order value.
Compared to a dedicated cart like Thrivecart, Samcart or Clickfunnels, it’s missing the ability to offer order bumps and upsells.
Bumps are extra items offered at the first purchase, as in “do you want fires with that”.
Upsells are usually bigger products offered once the first purchase is made, as in “would sir like to see the dessert menu”.
A good set up bumps and upsells can easily double your typical customer’s first purchase on average.
File hosting
Gumroad was built to sell files.
It has a big following in the design community selling things like Photoshop brushes. It’s also useful for selling Wordpress plugins and other small scripts as zip files.
If you’re selling software or information you can package up in a zip file, you still need somewhere secure to store them.
Lemonsqueezy is a good next step for this, as it still operates as merchant of record so simplicity is the name of the game.
Course platform
I hesitate to call Gumroad a Course platform when all it does is host videos and PDF’s.
PDF’s are a terrible way to distribute text, particularly on mobile, but it has a market on Twitter, so here we are.
Free video hosting shouldn’t be underestimated as a feature. We all got used to free video hosting with YouTube, but if you want to turn off ads and links to other videos, you might be surprised at the costs.
What Gumroad is lacking is easily readable HTML pages, and well organised lesson pages where you can hold video, text and downloads of useful resources.
It’s also missing any of the quiz or assessment tools to check your students have understood the material. There’re really no interaction with the course creator and information-only products aren’t earning the prices they did a few years back, so you’ll hit a ceiling on what you can charge for such a basic product.
Of the platforms I’ve worked with, 3 stand out:
- Thrivecart Learn: A little clunky but it’s a lifetime deal with ThriveCart. You’ll need to host your own video on YouTube, Vimeo or a CDN like bunny.net
- Teachable: A solid course platform that just edges out Thinkific by handling all the tax issues for you.
- Kajabi: More pricey, but it has a far better structure for testing different “offers” around the same product. Also contains a solid set of email marketing features whiich shoudln’t be underestimated as your list grows.
Affiliate sales
Because of the merchant of record setup, this is super easy to get started. Share a link and off you go. Tracking of who makes a sale, and making payouts is simple and automatic.
The reporting is terrible though and leaves you open to fraud when you don’t know where your affiliate traffic is coming from. As an affiliate you’re pretty much blind to how you made each sale.
Thrivecart, Teachable, Kajabi all offer affiliate functions and of these Thrivecart is undoubtedly the best. It not only handles affiliates, but can deliver bonuses when someone buys through your link, and even handles Joint Ventures where you collaborate on a product and split the costs.
(Lemonsqueezy promise they’recatching up with their affiliate function to take care of Gumroad customers)
This is a big one. Free email is a big deal once you’re past about 1000 names, although Gumroad’s deliverability is sketchy at times.
Their “workflows” are useful for basic welcome series, but fall short of even fairly cheap email systems elsewhere.
Kajabi includes good email features. Other than that my recommendations are MailerLite for it’s excellent deliverability or ActiveCampaign for more advanced automation flows.
(No, I don’t recommend Convertkit. I’ve seen fairly poor deliverability from the platform and had this confirmed by other email consultants. If your emails don’t get through to the main inbox, not much else matters.)
These two integrate with all the tools I’ve mentioned so far.
Mobile app
A niche Gumroad feature, but underrated, making it easy for buyers to consume your content should be a priority.
I have a bunch of meditations I’ve bought that I listen to on the app, and I re-listen to a lot of content this way.
Kajabi and Teachable both offer equivalent apps.
Blogging
Gumroad’s “Posts” are sort of a blog, that echo what you’ve sent by email.
This feature doesn’t seem to attract any SEO traffic at all, in fact the few articles I checked on some quite big Gumroad sellers weren’t even crawled by Google.
Fixing this should be an easy win. Just look at any post on Substack and you’ll see the effort they put into helping you get new email signups.
In the midst of a new era of newsletters, using posts to attract SEO traffic and convert it into email lists and buyers is a huge missed opportunity.
Kajabi and Teachable both have blogging functions.
(I prefer to keep my marketing site on Wordpress, then keep all my sales pages, checkout and courses on a separate hosted system. But then I’m bending wordpress to do things a course platform will never do, like building copy swipe files.)
Landing pages
I had to hold back a little bit of sick writing that.
Gumroad’s sales pages have been a constant bone of contention, and were made worse with their horrible redesign this year that dropped any ability to style the pages as you want.
They’re aesthetically atrocious, badly laid out and limiting in design.
They’re a tick in the features box you need to cover off though.
Most serious Gumroad sellers are now using at least a page on Carrd, if not a more sophisticated page designer, and sending buyerrs direct to the Gumroad cart, bypassing the sales page.
Kajabi has the most flexibility in this area. Teachable isn’t bad but a bit formulaic.
Thrivecart has a great landing page builder, but always has the checkout as part of the page which may not be to yor taste.
What’s missing:
If you’re moving onto a platform with a monthly fee, there’s a few other things you might want to take a look at that Gumroad is missing:
These are tools that will take you from 5 to six figure revenues and beyond.
Community
Eventually you want the income security of a membership group, and your users want somewhere to get ongoing feedback.
Few tools have challenged Facebook Groups for this function, but Discord is probably the most popular among younger audiences. Don’t expect the LinkedIn crowd to get to grips with it though.
Other options are:
Circle (integrates with Teachable)
Mighty Networks (has its own course platform)
API
An API lets you automate actions that your users would otherwise have to do.
The main ones would be adding people to email lists and adding people to courses.
As Gumroad makes it’s money off people buying through the checkout, they’ve never offered this, but most of the course platforms that get paid on a monthly flat fee will do it. This opens up the ability to split your cart off from your course platform as yoo get more sophisticated.
Even in the early days you might wan to link a landing page tool like Carrd to your email list and an API is how you do this.
My marketing tech stack
For Copy & Conversions, my stack is Wordpress for the marketing site, Thrivecart for payments, affiliate tracking, and course platform, and MailerLite for email. I’ll probably trade up to ActiveCampaign again at some point in the next year.
I have a bit more tech ability than the average creator.
Without being an actual coder I can plug tools together quite effortlessly. If you can’t do that and don’t have a readily available resource to do it, I’d stick with Kajabi as my next preferred option.
So should you leave Gumroad?
If you’re getting started, Gumroad has an impressive feature set under one hood.
On a feature by feature basis it stacks up against Kajabi, it’s just that each feature is done with zero flexibility, almost no reporting and looks dog ugly.
But, until you hit the offer that makes your first $1,000 online, it’s an excellent, risk-free place to experiment.
With the new pricing, I couldn’t recommend anyone gets too wedded to it though.
