In 2011, a 19-year-old designer called Sahil Lavingia had a problem.

He had created a single digital icon (representing a pencil) which he wanted to sell for $1.

But setting up a website just to flog a $1 icon seemed ridiculous. It would take more time to set up the shop than it took him to create the product itself.

He wondered how many other digital product creators were put off by the same obstacle?

So he created Gumroad.

It was a stripped-down e-commerce system that made it easy to sell small scale digital products via a simple ‘buy now’ button:

Once you had created a digital product (like a graphic, template or report) you uploaded the file….

Gumroad instantly gave you a unique link.

Then if someone clicked that link, they were directed to a simple checkout page with a big “Buy” button where they could pay via their card for an instant download.

At the time, this was revolutionary.

Gumroad was a big hit with anyone who wanted to sell a digital download quickly, without lots of hassle.

Within a year, venture capitalists were throwing millions at the platform and declaring it “the future of digital sales.”

Then the bubble burst.

By 2015 Gumroad had laid off nearly all its staff.

And for a while it looked destined to join the graveyard of forgotten eCommerce start-ups.

But Gumroad is now thriving again.

The post-pandemic side hustle boom – along with the rise in the popularity of digital information products – has made it a hit once again.

Today it’s a booming marketplace where you could sell eBooks, PDF reports, courses, templates and other products.

So let’s take a closer look…

How Gumroad Works

In a nutshell, Gumroad is a checkout and delivery system for digital products.

You upload your file (eg. an ebook or training video) and Gumroad will give you a page with a “Buy” button.

A customer pays with their debit card or PayPal.

Then Gumroad delivers the file.

This means you can sell your products without needing a website.

However, if you want to, you can embed their checkout button on your own website. You could also link a custom domain to your Gumroad storefront.

The good thing about Gumroad is that it pays money straight into your bank in British pounds.

Also, since January 2025, Gumroad has become a “merchant of record.” Basically, this means that they are allowed to handle the VAT for each sale.

This means you don’t have to register for VAT unless you’ve got other businesses that tip you over the £90k threshold.

Of course, you still report your income to HMRC, but you don’t have to stress over VAT returns for your Gumroad sales.

What Gumroad Costs

Gumroad promises “No monthly fee!”

Which is true.

You can start selling without paying anything upfront.

But there are costs, naturally.

On each direct sale, Gumroad takes 10% plus 40p per transaction.

Then the payment processor also takes their cut, which is about 3% plus 25p for a card. PayPal varies a bit, but works out roughly similar.

So on a £10 product, you’d lose about £1.65 in total fees, netting you £8.35.

On a £25 product, fees would be around £3.05, leaving you with £21.95 profit.

This doesn’t sound too bad, but if you were to sell something very cheap – i.e. for around £2 – then the 40p flat rate would take almost a third of your profit.

Which is why I’d recommend combining super-low cost products into a bundle that you can charge a higher price for.

Gumroad also has a marketplace, called Discover.

If a buyer finds you there (instead of you finding them), the fee is a much larger 30%. That does include the cost of card processing, but it’s still quite steep.

That said, it’s a great way to find new customers without you paying for marketing and advertising.

You can set a minimum price for a product that you list (eg £5) but also let people pay more if they want.

(Surprisingly, some people do this!)

There’s also an option to hold a sale, offer discount codes or ‘friends and family’ prices.

You can select to be paid weekly, monthly, or quarterly – however, each sale has a 7-day holding period before it’s eligible for payout (to reduce fraud and refund issues).

The money will either arrive in your bank account or your Paypal account. If it’s the latter, you will need to cough up a 2% payout fee.

There’s one other thing to watch for…

If a buyer thinks the product isn’t what they paid for, and requests a refund, you’ll not get that 40p processor’s fee back.

Which is a good reason to make sure your product delivers what it promises!

What Sells Well on Gumroad

Gumroad is ideal for a lot of the digital products I’ve been writing about over the past few years in What Really Makes Money.

• PDF files – these are what I call ‘Micro Manuals’. They are short, problem-solving documents that come in the simplest digital form. They can be reports, quick start guides, checklists, recipes, cheat sheets and lists.
• Ebooks and Reports – these are more detailed forms of information product that help people achieve their goals. A report might be 2,000-5,000 words long while an eBook might be 10,000-20,000 words long.
• Digital printables – these include planners, habit trackers, goal-setting systems that people can download, adapt to their needs, and print out.
• Templates – these could be design templates that people can use for their websites, social media and promotions…. Or copywriting and editorial templates for written materials… or spreadsheets, CVs, and other practical resources.
• Video and audio – You can upload stream-only video, or audio files that contain advice, demonstrations and coaching.
• Memberships and subscriptions – you can deliver ongoing content with monthly or annual tiers, including options for trials or fixed-length memberships.
• Bundles – you can create packages where you sell multiple digital products as a single offering.

Once a customer buys, you can then email them directly, which allows you the potential to sell further products.

However, you only unlock the full email features once you’ve hit $100 (about £80) in sales and had at least one payout.

But all in all, this is a very good option for you to sell digital products beyond Etsy (which has been the main focus of my recommendations in recent months).

Alternative Digital Marketplaces

There are some alternatives to Gumroad that you might want to consider.

• Payhip – This is a UK based version of Gumroad where you can sell your eBooks, PDFs, printables and courses. It also handles EU and UK VAT. The bonus is that it comes with built-in landing pages for your marketing efforts. The free plan takes 5% per sale, or you can move onto paid plans that lower that percentage.
• Ko-fi – This is good for one-off sales of eBooks, PDFs, or artwork. You can let people download for free or pay if they want. It also doubles as a ‘support me’ platform where fans and customers can literally buy you a coffee. There’s a 5% cost per sale on the free plan, or 0% if you upgrade to Ko-fi Gold.
• Podia is best for courses, bundles, and memberships. It includes clean, visual layouts that make your products look slick and professional. Built-in email tools mean you can keep in touch with buyers without needing broadcasting systems Mailchimp or ConvertKit. The Free plan comes with a 10% fee. Paid plans (from about £30 per month) remove the per-sale cut.

These are all worth checking out and testing.

However, resist the temptation to scatter a load of digital products across all of them, and hope for the best.

It’s far better to pick one, learn how it works, and get some sales under your belt. This way you can figure out some statistics (e.g. conversion rates, net profit after fees, refund rates).

Then when you try an alternative, you have a like-for-like comparison.

But Gumroad certainly is a good option for many of the digital products I recommend you create in What Really Makes Money.

If you use this platform, or have tried it in the past, I would love to hear about your experiences with it!