Gumroad vs Payhip

Gumroad is one of the most well-known platforms for selling digital products. I’ve used it to sell on both Work Notes and CSS For Designers.

After some recommendations and exploring the features, I switched both sites over to Payhip. About a month later, I switched CSS For Designers back.

The two platforms offer similar functionality. Integrating the services is similar but not the same and even the design of the dashboards is similar.

So, why the change and why the change back?

Pricing

One of the most obvious differences between the services is pricing. Gumroad offers:

• A free tier where the transaction fee is 8.5% + 30¢
• $10/month tier (for fewer than 1,000 customers) with a reduced fee (3.5% + 30¢) and some other benefits

Payhip’s free tier is a little more generous. There are no feature upgrades, just lower fees:

• Free tier: 5%
• $29/month: 2%
• $99/month: no transaction fee

Despite this, cost wasn’t really a consideration for me. Both services have free tiers with an option to upgrade when sales volumes justify it.

Switching

There were a few key features that attracted me to switch both of my sites to Payhip.

Currency

Payhip can charge customers in GBP. Gumroad can display prices in GBP, but customers are always charged in USD.

This caused some friction in the payment process as customers:

1. Weren’t sure they were charged in USD
2. Might be charged conversion fees by their bank
3. Were confused why a UK-based site would charge in dollars

These concerns are understandable and cause needless friction.

EU Digital VAT

One of the main benefits of both of these services is that they totally relieve sellers of dealing with EU Digital VAT.

Payhip even allows sellers to choose whether EU Digital VAT is added on top of the list price, or to absorbed into the price. That’s a really nice feature.

Integration similarities

The integration for Gumroad and Payhip is remarkably similar. Payhip’s is a little more cumbersome, but there’s barely any difference.

Even Payhip’s Webhooks are remarkably similar to Gumroad’s Ping. This made the switch fairly straightforward.

Payouts

One other difference is how payouts are handled. Gumroad holds all payments for a week before issuing payouts through Stripe on Fridays. On Payhip, payouts are made one week after each purchase.

This is a plus and a minus. On one hand, Payhip pays out quicker, but that can mean a significant increase in bookkeeping.

It also seems that Payhip’s refunds need to be handled through Stripe, rather than Payhip dashboard. On Gumroad, this is handled through the account.

Payhip’s missing features

Switching to Payhip was remarkably easy, but after some time, I found some subtle differences and feature limitations. Ultimately, these caused me to switch CSS For Designers back to Gumroad.

Gumroad have developed lots of new features for variable products and subscriptions. A particularly useful subscription feature is the ability to automatically suspend a subscription after a specified period.

This isn’t possible on Payhip yet. Depending on your use case, that could be a dealbreaker.

Another longstanding feature on Gumroad is the ability to set suggested prices on pay-what-you-want (PWYW) products. Payhip offers PWYW pricing, but there isn’t an option to set a suggested fee.

That might not seem like a big deal, but if customers can pay anything, it’s useful to given a suggested value (i.e. $5).

Lastly – and this is a big ’un – Payhip requires users to opt-in to mailing list integrations. When I contacted their support, I was told this is for GDPR reasons, but there are lots of legitimate GDPR-compliant reasons that a seller might want to add users to a list (e.g. transactional emails).

Gumroad lets sellers automatically add users to mailing lists, which is useful for follow-ups and other things. If transactional emails are important, this is a big consideration.

It’s also worth mentioning Gumroad’s workflows. These allow sellers to send automated follow-ups through the Gumroad interface, which is a nice feature not available through Payhip.

Wrapping up

As ever, the Devil’s in the details. Many of these differences aren’t clear from the feature descriptions on either Gumroad or Payhip.

Both platforms have some great features, though neither are perfect. Ultimately, it made sense to move CSS For Designers back to Gumroad, but I’ve kept Work Notes with Payhip.