Update Dec 2022: I first wrote this post in July 2020 and I’ve updated it with Gumroad’s new pricing structure. For full disclosure, I invested in Gumroad several months after I first wrote this post, but none of the recommendations have changed.
For authors, deciding between Gumroad vs. Amazon KDP is not always a straightforward answer.
I’ve been a huge advocate of Amazon KDP (Kindle Direct Publishing) for several years now, and most of my books are published on that platform.
However, I decided to self-publish my latest book on Gumroad, and I wanted to share my thoughts about which one I think is best for authors.
I have also gathered some insights from other authors who have used one or both platforms.
Gumroad vs. Amazon KDP: Quick Summary
This is a really long post (3,900+ words, which will take you around 17 minutes to read), so here’s the TL;DR version if you don’t have a lot of time:
Both Amazon and Gumroad have some advantages and disadvantages for authors. And what works best depends on your objective and on your current situation.
If you want to maximize profits, already have a fairly large audience, and have the time and energy to direct traffic to your book, then Gumroad is the best option for you.
If you care more about brand value, have a smaller audience, and want to rely more on organic traffic/ reach for readers to find your book, then Amazon KDP is the best option for you.
You can, of course, publish on both platforms at the same time, but there are some considerations that you have to factor in.
Here are some more details about the advantages and disadvantages of each, and which one wins in each category.
Gumroad vs. Amazon KDP: Fees & Royalties
Let’s start with a foundational question. What are the fees you have to pay and royalties (i.e. profit margins) you get on each platform?
With Amazon, you can publish your book for free (i.e. there are no listing fees), and there are no monthly fees. Your royalties fall between 35% and 70%, depending on the book’s price point.
If you list your book’s price between $2.99 and $9.99, then you’ll get a 70% royalty (i.e., your profit is 70% of the book’s price point).
However, if you list your book’s price between $0.99 (lowest price allowed) and $2.99 or between $9.99 and $200.00 (highest price allowed), then you’ll get a 35% royalty (i.e., you only get paid 35% of the book’s price point).
In other words, Amazon tries to incentivize you to price your book between $2.99 and $9.99 because that’s a sweet spot for sales.
Note: This applies to the ebook (i.e. Kindle) version of your book’s price point. The paperback version on Amazon has a different royalty structure.
With Gumroad, you pay a 10% fee per sale, plus a credit card processing fee (or a PayPal fee). Gumroad doesn’t specify how much those additional credit card & PayPal fees are, but on average, they hover around 3%.
There are no other monthly fees, and you don’t pay any fees if you have a free product.
So in total, you can expect to pay around 13% per paid product.
For example, if you sell a $50 book package, then you pay a 13% fee on each transaction. In other words, you pay around $6.50 to Gumroad, and you make $43.50.
So Gumroad wins here.
Note: This pricing update is fairly new, and will go into effect at the end of January 2023. A previous version of this article referenced Gumroad’s old fee structure, which had a $0.30 fee per sale, plus a percentage of the transaction that depends on lifetime revenue. Check out the Gumroad old fee structure by clicking here.
Another important factor that plays in Gumroad’s favor is “price anchoring.” Given that Amazon persuades authors to price their book between $2.99 and $9.99, most books are listed within that range, which makes it’s very hard to justify selling a $47 Kindle ebook.
Gumroad doesn’t have that problem.
Gumroad vs. Amazon KDP: eBook Formats
When you submit your ebook to Amazon, you have to meet their specific guidelines because Amazon converts your book into their proprietary ebook file format. You can format your book using Microsoft Word or by using Amazon’s own tool called “Kindle Create.”
You can also submit other formats, such as PDF, but those end up causing some formatting challenges when they’re converted to Kindle-specific files.
The way your readers read your Kindle book is either on a Kindle device (e.g., a Kindle Fire Tablet or a Kindle Paperwhite) or on a free Kindle app installed on any other device (e.g., iPhone, iPad, Android phone, computer, etc.).
When you submit your ebook to Gumroad, you basically upload whatever file format your readers will end up downloading. You can also upload multiple files of the same book.
For example, you might want to offer your book in PDF format only. Or you might want to offer it in PDF, MOBI, ePUB, and HTML. Gumroad basically acts as a document repository and you can upload the same files that you want your customers to view.
Note: If you want your Gumroad customers to be able to read your book on their Kindle devices, then make sure you upload the Kindle-friendly MOBI version of your book.
Gumroad wins in this category because of the file format flexibility.
For example, I wrote a guide called 30+ Email Scripts That Get Amazon Book Reviews & Testimonials (Authentically), and because it included swipe files (and readers needed to easily copy/paste those email templates) the best format that worked was Adobe PDF.
And because of that, I decided to sell it on Gumroad.
Gumroad vs. Amazon KDP: Paperback Copies
Most authors want to (and probably should) sell paperback copies of their book. That’s because some readers still prefer to hold physical copies of books, and it would be a mistake to ignore that potential revenue stream.
Here’s a recent screenshot of revenue from my books. Notice the difference between the ebook and paperback royalties.
With Amazon, creating a paperback version of your book is very simple. You’ll need to convert your manuscript to a print-ready file (easy to do within Amazon KDP) and then upload a print-ready cover (that you’ll need to have designed).
After you publish, Amazon then simply prints your book as soon as someone orders it (called POD, which stands for print-on-demand) and ships it to them. So you don’t have to worry about inventory or paying for print copies upfront.
Gumroad unfortunately does not provide any of those print-on-demand capabilities, which means that you will not be able to sell any paperback copies of your book.
The only potential alternative is to do this manually by pre-printing copies of your book yourself and then physically sell & ship them when someone makes an order (not very practical, and not very cheap).
Winner: Amazon KDP
Gumroad vs. Amazon KDP: Organic Reach
Organic reach is about how people find your book and how effectively each platform recommends it.
With Amazon, over 95% of my book sales come from organic sales. In other words, it’s mostly from Amazon’s own algorithm. I don’t get a lot of sales from my own efforts of directing people to buy my books.
Note: Amazon does not disclose any data about statistics or traffic sources, so I couldn’t give you exact numbers. However, I do track my own sales channels through affiliate links to my books, and that’s why I can estimate organic sales at around 95%.
With Gumroad, it’s almost the exact opposite. For sales of my last book, only around 7% of the sales came in from Gumroad’s organic reach, and 93% came from my own direct efforts, so I have to do a lot more marketing to sell those books.
So for me, Amazon wins because of three reasons.
First, I can depend a bit more on sales as passive income and I don’t have to constantly market my books.
Second, the volume of readers and traffic on Amazon is much higher than the volume on Gumroad.
Third, Amazon has a sophisticated search algorithm that recommends books to readers based on recent events or on their search/ purchase history.
And all three factors converged for me during the COVID-19 pandemic.
I wrote a book around 6 years ago (called “Influencing Virtual Teams“) and it was making around $200 a month. Then, during the pandemic, there was a sudden spike in interest about remote work, and the book ended up making 10X that amount in a couple of those months.
Although Amazon wins in this category, I do have to give Gumroad two advantages here. First, they are open about their sales sources, so I can get much better statistics. And second, I made over $3,294 in sales in one month from one book, so the higher price-point of the book could pay off for you.
Winner: Amazon KDP
Gumroad vs. Amazon KDP: Reader Emails
An essential feature for authors is the ability to collect emails from their customers. There are many reasons why, but in summary, it’s to be able to stay in touch with readers and build a relationship with them so you can sell other books (or products/ services) down the line.
Amazon does not give authors the capability to view any of those email addresses. In fact, authors have absolutely no visibility about who their customers are. There is a workaround, where authors can offer customers a freebie in exchange for their email address, but that takes a bit of effort to set up, and you’ll still not capture 100% of your customers.
Gumroad not only gives you your customers’ information (including email addresses), but it also allows you to communicate with them through Gumroad’s email messaging system directly. You can even export those email addresses and import them into your email management system (such as AWeber) if you’d like to. So it’s a no brainer that Gumroad wins here.
Gumroad vs Amazon KDP: Listing Your Book for Free
Some authors like the idea of offering one or more of their books for free to help them with branding and even making money indirectly.
With Amazon, you can list your book for free on a limited basis only (for 5 days every 90 day period if you’re enrolled in KDP Select). You can also list it as a “Permanently Free” book, but that’s not a simple process.
However, if you are able to list your book for free on Amazon, you’ll get the advantage of the high volume of traffic. I listed one of my books as a perma-free book, and now get around 20 to 30 downloads a day.
With Gumroad, it’s much easier to list your book for free, and you have the option to change the price at any time. The advantage with Gumroad is that you can use a price+ feature (i.e., a “pay what you want” feature), which allows customers to name a fair price.
The same book that I have listed for free on Amazon is also listed for free on Gumroad. But I used a “0+” price on Gumroad, which means that people can pay for it if they want to.
Regardless of paid or free downloads, the total number of downloads is much lower on Gumroad than it is on Amazon (nearly 1 to 2 books every day compared to Amazon’s 20 to 30).
This category is tough to determine a clear winner because free on Amazon gives you a lot more downloads, but doesn’t make any direct royalties.
And with Gumroad, you get the email addresses, a potential for direct royalties (if you use the 0+ feature) but you don’t get as many downloads.
Gumroad vs. Amazon KDP: Promotions & Advertising
Amazon gives you a few options to market and promote your book.
If you’re signed up to KDP Select, you’ll get the option of a Kindle countdown deal (where you can offer a time-based discount for your book), or a free book promotion (where you can offer your book for free for 5 days) during every 90 day period.
Amazon also has a solid paid advertising platform that helps you promote your book through targeted ad campaigns on its marketplace.
For book descriptions, you can control all the information on your book’s description page, but you’re limited to text only (using HTML formatting). Amazon prohibits you from including any images or links.
Finally, Amazon also has an affiliate program (where people can help promote your book and get a small cut) but the program is generic to the entire site and not book-specific. Anyone can sign up and affiliates make a commission of up to 10% (usually between 4% and 6%).
Gumroad, on the other hand, offers limited options to market your book (e.g., there are no paid advertising capabilities or special marketplace promotion options).
However, Gumroad does offer the ability to create discount codes, which are specific URL links that you can share on different channels. You get to determine the “amount off” for each code, and can even limit the quantity for customers. This could also help you understand which campaigns make you the most sales.
I used different codes to analyze the breakdown of sales of my last book on Gumroad (more here)
Gumroad also has an affiliate program, but it’s much more robust than Amazon’s, and they give you a lot of control over who can sign up to become an affiliate. Most importantly, you can choose how much an affiliate can get from your book’s sales (e.g. 50%). This can be quite lucrative if you pursue joint venture deals with influencers in your space.
Finally, Gumroad gives you a lot more flexibility and control over your book description page. You can include text, links, and images, and it’s a lot easier (and faster) to make book description changes on Gumroad than it is on Amazon.
For example, it really helped when I included screenshots of testimonials of my Fun Virtual Team-Building Activities Gumroad page for social proof.
Overall, I think the combination of Gumroad’s discount codes and affiliate program beats Amazon’s Kindle promos and advertising platform. The flexibility with the description is another win for Gumroad as well.
Gumroad vs. Amazon KDP: Customer Service Overhead
Customer service overhead is about how much time you’ll need to spend addressing your customers’ needs.
With Amazon, that’s pretty much down to zero. I never have to interact with customers. For example, if someone was dissatisfied with the purchase of a book (and they wanted an exchange or a refund), or they had specific questions about how many copies they can buy at once, etc., all that is handled 100% by Amazon’s customer service team. This is a huge weight off my shoulders and I never have to worry about any of it.
With Gumroad, I have to spend more time dealing with customer service. For example, when someone mistakenly bought my book twice, they had to email me to let me know, and I had to manually log into my dashboard and fix it.
In another example, when a few folks were not happy with my book and wanted a refund, I had to personally issue those on my end. With low sales volumes, this shouldn’t be an issue, but my concern is that if I’m on vacation and don’t want to read my emails, some customers might be really unhappy with a lack of quick response times.
Amazon wins here because it’s headache-free and more passive than Gumroad.
Winner: Amazon KDP
Gumroad vs. Amazon KDP: Book Options & Formats
With Amazon, you can create three different formats for your book: a Kindle ebook, a paperback, and an audiobook. The neat thing about Amazon is that it links all three formats for you on the same page so that customers can pick whatever medium they prefer.
Here’s a screenshot.
However, Amazon doesn’t do anything else in terms of presenting other options for customers and there are no upsells you can offer to get more sales.
With Gumroad, you can set up different versions of your book that provide customers with multiple options.
Here’s an example from Arvid Kahl’s book, Zero to Sold, where he lists different prices depending on what format of the book customers want to buy.
Another example could be where you have one option that includes your all book files (e.g., PDF, MOBI, ePUB) for $37, and then have another option that includes your all book files plus your audio files and bonus video files for $99. This would help you capture even more revenue.
Given the potential of this feature, Gumroad definitely wins here.
Gumroad vs. Amazon KDP: Brand Perception
This one is fairly straightforward. Amazon has a much higher brand perception for authors and customers. It’s been around for a much longer time than Gumroad and it started out as an online bookstore. It’s pretty much the dominant marketplace for books (and in a way, it’s kind of unfair to compare the two).
Having your book listed on Amazon is sometimes a good idea just because it is associated with (and is the marketplace for), every major traditional publisher and every famous author in the world.
Moreover, people sometimes just prefer to shop on Amazon because of convenience (they’re used to the platform, already have their credit cards saved, etc.).
Here’s an anecdote that illustrates this: Daniel Vassallo, who made over $40,000 in the first 2 weeks from his book (“The Good Parts of AWS“) currently sells exclusively on Gumroad.
However, it sounds like people are actively searching for his book on Amazon because the search box on Amazon pre-populates the book title if you type the first couple of words (“good parts…”) of his book’s name. And none of the search results include any similar titles.
So there will be some potential revenue opportunity there.
In addition, having your book gain #1 Amazon Bestseller status on Amazon (which is not super-hard to achieve), carries a fair amount of weight given the brand value of Amazon. So that’s an additional benefit that Gumroad doesn’t provide.
Winner: Amazon KDP
Gumroad vs. Amazon KDP: Creator Community
This is another easy one. As an author, you get a sense of belonging to a community from the folks behind Gumroad vs. Amazon.
I think this might be due to the fact that they’re a much smaller team, but it’s also because they are always trying to improve and constantly listening to their customers.
Here’s a shout-out I recently gave them on Twitter.
They have even featured me and several other creators on their Instagram account.
I frequently tag both the Gumroad and Amazon KDP accounts on social media, and Gumroad acknowledges and interacts a lot more frequently than Amazon. In fact, I don’t think I’ve ever received any acknowledgment or interaction from Amazon.
My experience is not unique. Here’s a Tweet by Philip Kiely who wrote “Writing for Software Developers” (aff link) reinforcing the point.
Gumroad vs. Amazon KDP: Review/ Rating System
This is about how customers leave reviews of your book, and how much control you have over that.
With Amazon, their review system is pretty much the gold standard of all online reviews. Some analysts even believe that Amazon’s review system is the key to the company’s success.
On Amazon, customers can leave both a star rating (out of 5 stars) and a text-based review. Those reviews are so powerful as social proof that some people (including me), don’t buy anything from any other vendor before checking reviews on Amazon.
Pretty much anyone can leave a review of your book. For example, if someone downloads your book from your website, they can still leave a review on the book’s page on Amazon (they need to have an active Amazon account though.)
However, Amazon gives a much higher weight to reviews of books that are bought by customers directly from their own site. They even mark those reviews with a “Verified Purchase” subtitle.
Positive reviews (particularly verified ones) are so important because they can improve your ranking based on Amazon’s search algorithms.
Technically, you have no control over any of those Amazon reviews. So if your book receives multiple negative reviews that lower your overall score, then there’s nothing you can do about it (other than try to reach the customer directly and try to change their mind).
There are some exceptions to this if the review is abusive or irrelevant. But your only other option to remove all your negative reviews is to just unpublish your book entirely.
With Gumroad, it’s a little different because only customers who bought your book can leave a rating. And the rating system is a simple 1 to 5-star rating with no text-based review option.
The advantage of Gumroad’s system over Amazon’s is that you can choose to remove the ratings entirely with Gumroad. So in other words, if you get a lot of negative reviews, Gumroad gives you the capability to hide those from your customers.
Customers will still be able to rate your book, but those ratings will be private if you choose to hide them.
Note: You cannot selectively choose which ratings to hide (it’s all or nothing).
From a reader/ customer standpoint, Amazon wins here because of the review system’s robustness. However, from an author standpoint, I’m calling it a draw because the control that Gumroad provides you is a great feature.
Gumroad vs. Amazon KDP: Why Not Both?
You can get the best of both worlds by publishing on both platforms. Of course, it’s a bit more work to maintain and post on two platforms, but you will gain double the advantages.
One thing you should keep in mind is that you will have to opt-out of your Amazon KDP Select program enrollment (assuming you were enrolled in the first place). KDP Select is an Amazon-exclusive program (renewed on a 90-day basis) that prohibits you from publishing anywhere else, and you will not be able to list your book on Gumroad before you un-enroll from their program.
Another factor is your book’s price point, and there are a couple of things to consider.
First, Amazon constantly crawls the web for versions of your book that are listed at a lower price than what they offer. So if your book is listed at $12 on Amazon but it’s listed at $9 on iBooks or Kobo, then you’ll get a nastygram from Amazon asking you to lower your price on their platform. On the flip-side, a higher price somewhere else is not a problem for them.
Second, even if you list your book at a higher price point on Gumroad, you want to be careful about having way too much of a price differential. That’s because some customers could feel cheated if the same book is listed at $9.99 on Amazon but $35 on Gumroad. One way to address that is to add a bonus to your book or a freebie on Gumroad that gives a higher perception of value.
The safest thing to do is just price match the book on both platforms. But this also means that you’ll probably have to forfeit some more profit on the Gumroad platform.
Gumroad vs. Amazon KDP: Conclusion
The winner depends on what your objectives are.
Gumroad is way better in terms of royalties and control overall. But it does require more babysitting to drive traffic and deal with customers.
Amazon is great because it has better organic reach, higher brand value, and it’s hassle-free with customers. But it gives you less control and their price anchoring hurts your profit potential.
Here’s a quick summary of the different categories and which one wins in each.
- Fees & Royalties: Gumroad wins
- eBook Formats: Gumroad wins
- Paperback Copies: Amazon KDP wins
- Organic Reach: Amazon KDP wins
- Reader Emails: Gumroad wins
- Listing Your Book for Free: Draw
- Promotions & Advertising: Gumroad wins
- Customer Service Overhead: Amazon KDP wins
- Book Options & Formats: Gumroad wins
- Brand Perception: Amazon KDP wins
- Creator Community: Gumroad wins
- Review/ Rating System: Draw
So out of 12 categories, Gumroad wins on 6, Amazon KDP wins on 4, and it’s a draw on 2 of them.
Some could call Gumroad a clear winner here, but again, it really depends on what your goals are.
For me, I’ll continue to publish and experiment on both.
I’d love to hear your own thoughts on this. Connect with me on Twitter or via email.