SendOwl vs WooCommerce vs Easy Digital Downloads: Which Digital Product Delivery Tool Works Best To Sell Your eBook?

The internet isn’t the wild frontier it used to be.

When it comes to selling products online these days, customers expect a premium checkout experience and your local tax office gets upset when it doesn’t receive its cut of the action.

That means your payment process, digital product delivery system, and tax collection methods are now crucial to doing good online business. Basically, you can’t risk half-assing them anymore.

All this is to say that simply slapping a “buy button” on your sales page and calling it a day probably won’t turn out well for your online business in the long run.

More...

If you’re going to sell digital products to customers around the world, it means you not only need to be compliant with your local tax laws, but you also need to be EU VAT (Value Added Tax) compliant regardless of where your company is located. That’s why in this review, I’m going to put a special focus on both US sales tax and EU VAT compliance when it comes to the right digital delivery tool for you.

In our previous Payment Gateway review, I discussed the differences between using Stripe, PayPal and Gumroad to sell a simple eBook on your website.

In this post, I’m going to add some sophistication to the Stripe and PayPal payment gateway solutions by comparing how they integrate with different digital product delivery tools and tax automation services.

Read on to learn about 3 digital delivery tools (SendOwl, WooCommerce and Easy Digital Downloads) to decide which is best for handling the sale of digital products on your WordPress website.

You Need More Than a Payment Gateway

In our previous payment gateway review, Gumroad was the only solution that provided the right combo of critical features allowing you to:

  1. Sell your eBook,
  2. Instantly deliver it, and
  3. Stay compliant with US and EU tax laws.

In reality, Stripe and PayPal are incomplete solutions because they don’t really handle digital product delivery and tax law compliance.

However, there are some drawbacks to using Gumroad as your payment gateway and eBook delivery solution.

It’s inflexible when it comes to design customization and Gumroad’s transaction fees are super high. That's why I wanted to review other digital product delivery tools that integrate with Stripe and PayPal.

But first, let’s discuss what you need to consider when collecting US and EU taxes for any digital product (like an eBook) you sell…

Your eBook and Taxes

As stated above, your fledgling business can’t afford to get in trouble for non-compliance with applicable tax laws so just commit to figuring this stuff out from the start.

I’m going to briefly cover the essentials of EU VAT and US sales tax right now so you’ll have a foundation of what to look for when choosing one of the digital product delivery tools discussed below.

Tax Information Disclaimer

International tax law is complicated and constantly changing so please use the following information on EU VAT and US sales tax rules only as a starting point to learn more about the specific laws, rules and regulations that apply to your unique online business situation.

I'm not a tax expert and make no guarantees that the following information is currently accurate or will remain evergreen.

EU VAT Basics

Regardless of where your business is located, you must collect EU VAT for any sales made to EU based customers.

To appropriately dish out the EU VAT you collect, you must also register your business with one of the EU country tax offices to submit your remittances. For non-EU businesses, the TaxJar blog recommends registering with the Republic of Ireland since you don’t need to appoint a national to act as your fiscal representative (while also avoiding any issues with Brexit).

Luckily, the EU only requires you to register with a single country to act as your EU VAT remittance one-stop-shop.

On top of collecting EU VAT however, you must also submit two pieces of evidence from each of your EU customers to validate their purchase location. This basically means you need a way to record:

  1. IP addresses,
  2. Bank locations (post-checkout), and
  3. Country locations volunteered by buyers through a checkout question or their billing/shipping addresses.

Because it’s impractical to do this manually, you’ll need a digital product delivery tool or service that can calculate and collect the right EU VAT based on each EU customer’s purchase location, record their country location evidence, and provide a quarterly report to submit to the EU tax authority you registered with.

US Sales Tax Basics

From who and how much US sales tax you collect starts by determining which US States you have a sales tax nexus in (hopefully just one state for a digital info-product business).

A sales tax nexus basically means that your business has some sort of physical presence in a state and requires you to collect taxes from customers located in that same state.

In several states, this also means you’ll have to register your business for a sales tax permit to legally collect and remit these taxes.

So if you’re a US based online business selling an eBook, you’ll also need a way to detect which of your customers are located in the states you have a nexus in so you can add the appropriate state, district and municipal sales taxes to their order.

This can get super complicated if your business sells physical goods and uses warehouses or employees around the US to fulfill orders requiring you to claim sales tax nexus in multiple states. But if you only sell a simple digital product like an eBook, it’s likely that you only have a single state sales tax nexus (the state you’re running your solo-preneur home office from).

Of course, it’s up to you to triple check what is true for your unique situation!

Origin Versus Destination-Based Sales Tax

Once you’ve determined if and where you have (hopefully just one) US sales tax nexus, you’ll need to determine if your state requires origin-based or destination-based sales tax collection.

If the sales tax is origin-based, you’re lucky.

The tax you collect is based on your business location’s state, district and municipal rates and applies without change to all customers purchasing from within your state. This makes sales tax pretty easy because there should only be a handful of rates you’ll have to manage through your digital product delivery tool.

However, if your state requires destination-based sales tax, you’re probably going to need an automated tax service integration (like with Quaderno or TaxJar) with your digital product delivery tool.

That’s because, the sales tax owed by each customer purchasing from within your state will be based the customer’s location. Different areas and municipalities across the state almost always legislate different local tax rates which makes manual tax rate management impractical.

And unfortunately, many US states employ destination-based sales tax.

Update

After publishing this review post, one of our ActiveGrowth readers pointed us to a US Sales Tax for Digital Products article published on the Quaderno blog.

It's a must read if you're curious to find out more about your state's tax rules for digital products.

Digital Product Delivery Tools for Selling Your eBook

With a basic understanding of US sales tax and EU VAT compliance in hand, I’ll now walk you through 3 digital product delivery tools to compare how they handle both the delivery of your eBook and tax law compliance.

If you want to give your customers a slick, Stripe-like checkout experience while upgrading the purchase to download experience, SendOwl delivers.

For a monthly fee, SendOwl gives you the power to host several products, quickly embed buy buttons on your site’s eBook sales page, reliably deliver your digital product and easily comply with EU VAT regulations.

SendOwl’s monthly pricing only changes based on the number of advanced features you need, not on the number of sales you make. That’s pretty awesome because you can sell as many eBooks as you want for a fixed monthly fee.

Your SendOwl Backend Experience

Connecting SendOwl to Stripe or PayPal and creating buy buttons is fast, streamlined and easy. In fact, the overall SendOwl experience feels a lot like Gumroad.

When setting up your eBook product in SendOwl, you just give it a name, upload your PDF file and set a price.

Screenshot of the "Add Product" flow within SendOwl. It's as simple as selecting your product type, entering a product name, attaching the digital file and setting a price.

Exactly like Stripe and PayPal, you need to embed a few lines of HTML code on your sales page to start selling with a SendOwl designed buy button. Alternatively, you can use a SendOwl generated email link as the click action within your site’s own natively designed buy buttons.

SendOwl provides you with real-time sales analytics for your products as well as numerous types of reporting (including country specific tax collected) from their online dashboard.

Screenshot of the SendOwl dashboard showing a day-to-day graph of your income (blue) and refunds (red). Other SendOwl features such as Product Settings, Analytics, and General Settings can be accessed via the sidebar on the left of your browser.

Your Customer’s Frontend Experience

From your customer’s perspective, the SendOwl checkout experience will look similar to Stripe and PayPal (depending on which payment gateway you choose to use). However, there are two significant differences:

First, SendOwl gives sellers the option to create shopping cart experiences for customers instead of just flashing up a payment form when they press “Buy Now”. This feature becomes especially useful once you have multiple products for sale.

And second, instead of setting up a URL redirect to a thank you page and download link, SendOwl instantly provides your customers with a download button in a post-payment lightbox. 

Screenshot of the SendOwl digital product download lightbox that appears after your customers complete a successful purchase.

As a backup, SendOwl also sends a receipt and download link to the customer based on the email they filled out on their payment from. This product delivery backup system translates into a better purchase experience for both you and your customers (e.g. less angry customers asking “Where the f**k is my eBook?!”).

SendOwl EU VAT and US Sales Tax Compliance

When it comes to tax compliance, SendOwl excels at handling EU VAT and offers an incomplete solution for managing US sales tax.

For EU VAT calculation, collection and customer location evidence gathering, SendOwl does all the heavy lifting for you.

SendOwl not only collects the appropriate EU VAT and customer location evidence, but it also prepares your EU tax remittance reports for you. SendOwl also notifies you of any potential customer location discrepancies that require additional customer outreach to resolve.

SendOwl’s blog states that these location discrepancy situations usually occur in less than 0.1% of transactions so it should be a relatively insignificant issue.

Across the pond, SendOwl is only practical for US sales tax management if you run your business within an origin-based sales tax state because there's only a few tax rates you'll need to manually manage. If this case applies to you, SendOwl is the digital product delivery solution for you.

On the other hand, if you run your business from a destination-based US sales tax state, SendOwl becomes impractical since you’ll have to manually manage every municipal and district tax rate across your state.

What SendOwl Will Cost You

SendOwl offers 4 monthly subscription plans ranging from $9 per month up to $39 a month.

The SendOwl monthly pricing for each of their 4 hosted subscription plans: Basic, Standard, Premium and Business. This review examines the $15 standard plan that provides 30 products, PDF Stamping, Affiliate Marketing Programs, and Design Customization.

All the plans manage EU VAT and allow you to instantly deliver your digital products, but differ in advanced features.

For the purposes of bootstrapping your first eBook, let’s assume you select the $15 per month SendOwl plan integrated with Stripe so we can make a feature-equivalent comparison to Gumroad from the Payment Gateway review post.

Along with a 30-day free trial, the $15 per month SendOwl plan features include the ability to sell up to 30 products, PDF stamping (digital piracy protection), additional design customizations, and even the option to manage an affiliate marketing program. The only feature you don’t get with this plan is the power to upsell, which you won’t need until you have multiple products anyway.

Here's how SendOwl compares to Gumroad by the numbers (when accounting for transaction fees, monthly subscription fees and eBook revenue) for both a $7 and $39 priced eBook:

$7.00 eBook

x10 sold

x100 sold

x1000 sold

$15 SendOwl + Stripe (Intl. fees)

- ($100.73)

$477.70

$6,262.00

Gumroad $0 monthly fee

$61.05

$610.50

$6,105.00

Gumroad $10 monthly fee

- ($55.45)

$525.50

$6,335.00

$7 priced eBook comparison table of profits between using SendOwl's $15 per month plan integrated with Stripe and assuming all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions). The Gumroad plans outperform SendOwl from a profit perspective.

$39.00 eBook

x10 sold

x100 sold

x1000 sold

$15 SendOwl + Stripe (Intl. fees)

$206.79

$3,552.90

$37,014.00

Gumroad $0 monthly fee

$353.85

$3,538.50

$35,385.00

Gumroad $10 monthly fee

$253.35

$3,613.50

$37,215.00

$39 priced eBook comparison table of profits between using SendOwl's $15 per month plan integrated with Stripe and assuming all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions when using Stripe). The Gumroad plans outperform SendOwl from a profit perspective.

When you actually take into account the projected costs and gross revenues of selling your eBook using either SendOwl or one of the two Gumroad plans, Gumroad is more profitable than SendOwl in every scenario shown above.

SendOwl Wrap-Up

In my opinion, the most important service SendOwl provides on top of its digital product delivery tool is its sales tax and EU VAT calculation, collection and reporting features.

To take care of this manually is virtually impossible. And just integrating Stripe or PayPal with a tax automation service like TaxJar or Quaderno adds a higher monthly cost to your business without providing a reliable way for you to deliver digital products.

The only real downside to SendOwl is that, if you operate your business within a destination-based US sales tax state (which applies to most US states), you’ll need an additional tax service integration to help you automate that.

But if you’re an EU or origin-based US sales tax business owner, SendOwl integrated with Stripe and/or PayPal is likely the best and most cost effective solution for you to facilitate the sale of your eBook globally if you don't want to use the Gumroad platform.

WooCommerce is an online store plugin for WordPress owned by Automattic (the company behind WordPress).

It’s a popular solution for handling the purchase and delivery of both digital and physical products boasting over 36 million downloads while powering over 28% of all online stores.

Those numbers alone make it worth looking into as a digital cart system to sell your eBook so here we go...

Your WooCommerce Backend Experience

After installing the WooCommerce plugin on your site, the product setup and overall settings take place from within your WordPress dashboard.

Screenshot of the WooCommerce Product creation dashboard within WordPress.

From the plugin dashboard, you can set up your product page, access your orders, see a variety of sales reports, and manage all your settings.

The WooCommerce plugin offers a default hookup to your PayPal payment gateway, but you’ll have to download a free extension to integrate Stripe.

The backend experience maintains the basic WordPress dashboard feel and is quick to set up. In fact, WooCommerce even holds your hand during the setup of your first product with a tutorialized walkthrough.

Screenshot of the WooCommerce product creation walkthrough within WordPress. A series of pop-up boxes leads you through each step of the WooCommerce product creation process when setting up your very first product.

Your Customer’s WooCommerce Frontend Experience

Your customer’s default frontend experience with WooCommerce looks very basic.

Screenshot of the WooCommerce auto-generated Product Page. Within the product setup, you can enter your product name, price, tax annotations, product description and product tags. WooCommerce also has a feature allowing your customers to leave reviews.

Your product pages default to showing just your WordPress theme header and footer while displaying your product name, description, price, “add to cart” button, product tags and reviews in-between them.

If you use a front-end builder like Thrive Architect on your site, you can modify these WooCommerce generated product pages, but you can’t override them with any Thrive Landing or Sales Page templates.

Screenshot of the WooCommerce Cart Page. Tax rate rules are applied and added at this stage if you have them set up and enabled.

In the normal WooCommerce checkout flow, customers add your eBook to their cart from one of these product pages, click on a “View Cart” button located in your theme header to access the cart page, and then click a “Proceed to checkout” button to fill out a payment form.

Screenshot of the WooCommerce Checkout Page. In order to use Stripe payments as your payment gateway, you'll need to download a free Stripe extension for the WooCommerce plugin.

Customers can then complete their order on either a Stripe or PayPal lightbox after clicking the "Continue to payment" button.

Screenshot of the Stripe payment form lightbox for the WooCommerce plugin.

Upon successful payment, WooCommerce will load a payment confirmation page showing the receipt info as well as a not so obvious digital download link. Try to spot the unassuming text link within the WooCommerce receipt page screenshot shown below:

Screenshot of the WooCommerce receipt page or "Order Received" page.

Yup...it was the eBook title text displayed in the "Download" column.

Thankfully, a download link is also provided via an automated WooCommerce email receipt sent after purchase.

If you think that sounds like too many steps and is overly complicated, I agree.

The good news is that you can partially bypass the default WooCommerce checkout flow by setting up a separate eBook sales page (like a Thrive Landing Page template) and use the URL of the WooCommerce eBook product page as the click action for your custom sales page buy button.

Then in your WooCommerce dashboard settings (under Products >> Display >> Add to Cart Behaviour), you can check the "Redirect to cart after successful addition" option to automatically add the eBook to your customer’s cart and redirect them straight to their cart page (skipping the WooCommerce product page step).

Screenshot of the WooCommerce Settings >> Products >> Display page. Check the Redirect to the cart after successful addition option in the Add to cart behaviour section to have your customers bypass the product page and move straight to their cart.

WooCommerce Sales Tax and EU VAT Solutions

WooCommerce does not stand on its own when it comes to handling your EU VAT and US sales tax issues.

The good news is that a WooCommerce does offer a free plugin called WooCommerce Services that, when activated and linked to your Jetpack and WooCommerce.com accounts, will handle your US sales tax calculation and collection for free (using TaxJar).

The bad news is that if you employ this free WooCommerce Services extension, it can only handle one US sales tax nexus. If your business has nexus in more than one state, you’ll have to integrate your WooCommerce plugin with a paid TaxJar plan.

Another drawback to using WooCommerce is that it can’t handle EU VAT compliance on its own. You’ll either have to integrate it with a tax automation service like Quaderno (which is relatively expensive) or download a third-party extension like WooCommerce EU VAT Compliance.

Although the this free extension does calculate and collect your EU VAT, record customer location evidence and prepare EU VAT remittance reports for you, it requires you to setup and keep updating your EU country-by-country tax rate rules. The extension provides a button on your WooCommerce dashboard tax tab that creates all your EU tax rate rules simultaneously for you, but you'll need to keep cross-checking and updating them as needed over time.

What WooCommerce Will Cost Your Business

WooCommerce and the extensions discussed above are free to download and install on your WordPress site.

If you’re looking to keep your costs as low as possible, it is possible to set up a $0 WooCommerce system to sell your eBook if you only have a single US sales tax nexus and don’t mind manually managing your EU VAT rate rules through the WooCommerce EU VAT Compliance extension.

However, if you need to integrate with TaxJar or Quaderno to automate your tax calculation and collection, your WooCommerce digital product delivery system becomes much more expensive.

Below are some profit scenarios to compare a few different WooCommerce feature setups with Gumroad:

$7.00 eBook

x10 sold

x100 sold

x1000 sold

$0 WooCommerce + Stripe (Intl. Fees)

$64.27

$642.70

$6,427.00

WooCommerce + Paid TaxJar + Stripe (Intl. Fees)

- ($122.73)

$455.70

$6,240.00

WooCommerce + Quaderno + Stripe (Intl. Fees)

- ($347.93)

$230.50

$5,303.80

Gumroad $0 monthly fee

$61.05

$610.50

$6,105.00

Gumroad $10 monthly fee

- ($55.45)

$525.50

$6,335.00

$7 priced eBook comparison table of profits between using the free WooCommerce plugin setup integrated with Stripe and assuming all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions when using Stripe).

$39.00 eBook

x10 sold

x100 sold

x1000 sold

$0 WooCommerce + Stripe (Intl. Fees)

$371.79

$3,717.90

$37,179.00

WooCommerce + Paid TaxJar + Stripe (Intl. Fees)

$184.79

$3,530.90

$36,992.00

WooCommerce + Quaderno + Stripe (Intl. Fees)

- ($40.41)

$3,305.70

$36,055.80

Gumroad $0 monthly fee

$353.85

$3,538.50

$35,385.00

Gumroad $10 monthly fee

$253.35

$3,613.50

$37,215.00

$39 priced eBook comparison table of profits between using the WooCommerce plugin setups integrated with Stripe and assuming all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions when using Stripe).

WooCommerce Wrap-Up

Although it doesn’t look very fancy, WooCommerce is a reliable digital product delivery tool that can help you manage your EU VAT and US sales tax needs with varying degrees of cost and effort.

I only recommend it as a solution for those that can spend the time to manually manage the tax issues discussed above in exchange for keeping their overhead super low.

If your business is based out of a single, destination-based US sales tax nexus state, setting up the WooCommerce Services + EU VAT Compliance extensions alongside your WooCommerce account may be preferred over SendOwl. That’s because you’ll get the TaxJar calculation and collection automation for free to manage your more complicated US sales tax problem.

On the other hand, if your business claims multiple US sales tax nexus states, you’ll probably need to choose a more costly WooCommerce setup that pairs with a paid tax automation service plan like TaxJar or Quaderno offer.

However, when you look at the profit comparisons between the WooCommerce options and the two Gumroad plans, it looks like Gumroad actually buys you more peace of mind and less headache when it comes handling your taxes than WooCommerce does.

Once you start selling hundreds to thousands of copies of your eBook, Gumroad can even make you more money than WooCommerce if most of your sales go to non-US customers as the Gumroad transaction fees are 0.6% less expensive than Stripe's international transaction fees.

Easy Digital Downloads (EDD) is a digital product delivery plugin that looks and feels more basic than WooCommerce.

Although the core functionality is free, many of the extensions you require to make EDD functional are super costly. For example, to expand EDD’s payment gateway features beyond accepting only PayPal and Amazon Pay, you’ll need to cough up $89 per year just to add Stripe payments!

Honestly, my overall feeling about EDD is that it’s a dumbed down and more costly version of WooCommerce.

The TL;DR of this section is to avoid EDD at all costs. If you’re curious to know why, read on.

Your EDD Backend Experience

The EDD backend feels like a clunkier version of WooCommerce.

Just like the WooCommerce plugin, you manage your EDD products and settings within multiple tabs and sub-tabs located inside the EDD plugin dashboard.

Screenshot of the EDD dashboard within WordPress. The EDD dashboard is comprised of several tabs and sub-tabs you'll need to work through to establish your settings and add your digital products.

Also like WooCommerce, you can edit your product page using a frontend content builder like Thrive Architect, but you can’t override your EDD generated product pages with a landing or sales page template. That said, like WooCommerce you can still embed your EDD product page permalink as the click action within a custom sales page Buy Buttons.

Your Customer’s EDD Frontend Experience

When customers arrive on your EDD product page, they experience a checkout flow that appears strikingly similar to WooCommerce, but looks worse in my opinion.

Screenshot of the EDD Product page. The featured image is blown up with small title text and a buy button placed beneath it. Upon clicking the buy button, the buy button text merely changes to "Checkout" so your customers will need to press it a second time to move on to the Checkout page.

The basic EDD product page is awful. It blows your featured image up way too big and only displays your eBook name and a tiny purchase button below it. The tax being applied in this example is a single 9.9% "Fallback" tax rate that's charged to every customer if no other location based tax rate rules are detected.

When you first click the buy button, your item is added to the cart, but the only action that occurs involves your buy button text changing from "$X.xx – Purchase" to "Checkout". This forces customers to press the buy button a second time to actually move on to the cart and checkout page.

Screenshot of the EDD Checkout page. In my opinion, the EDD checkout page design is superior to WooCommerce since it combines both the customer's cart and checkout form in a single page.

The only real positive feature I can mention about EDD in comparison to WooCommerce is that their cart is combined with their checkout page. The EDD payment form has a more streamlined design here improving the final step of the purchase process, but my praise for EDD ends there.

EDD Sales Tax and EU VAT Solutions

EDD is especially bad when it comes to sales tax and EU VAT calculation and collection.

Like WooCommerce, you can manually set IP address based tax rate rules, but depending on where your business is based out of, that’s likely impractical to manage.

There is a free EU VAT Compliance extension for EDD, but I struggled to get it to work. On top of that, this free extension was last updated over 3 years ago and has only a handful of active downloads so it’s best to steer clear of it.

The only real tax handling option you have available with EDD is to integrate it with an expensive monthly Quaderno tax automation service plan that will handle both EU VAT and US sales tax issues for you.

What EDD Will Cost Your Business

The effective cost of using a “free” digital product delivery plugin like EDD is disappointing.

Not only do you need to pay $89 per year extra for a Stripe extension that should be free, you’re going to need the costly Quaderno integration as well.

If you do decide to use EDD as your digital product delivery tool, you won’t be happy to learn that every time you want to expand your functionality, it will cost you.

Most of the 150+ EDD extensions require you to pay 10s to 100s of dollars per year for even basic functionality like Stripe payments, Better Free Download Handling and PDF invoicing.

Shouldn’t basic features like that all come standard?

In what I can only describe as a sad joke, the EDD marketplace offers you the chance to access all their extensions for the laughable package price of $899 per year...give me a break!

Check out how much less you make when you use EDD paired with the paid Stripe extension and Quaderno subscription compared to just using Gumroad:

$7.00 eBook

x10 sold

x100 sold

x1000 sold

EDD + Quaderno + Stripe (Intl. fees)

- ($436.93)

$141.50

$5,214.80

Gumroad $0 monthly fee

$61.05

$610.50

$6,105.00

Gumroad $10 monthly fee

- ($55.45)

$525.50

$6,335.00

$7 priced eBook comparison table of profits between using EDD's free core plugin paired with a paid Stripe payments extension and a monthly Quaderno tax automation subscription. The table also assumes all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions when using Stripe).

$39.00 eBook

x10 sold

x100 sold

x1000 sold

EDD + Quaderno + Stripe (Intl. fees)

- ($129.41)

$3,216.70

$35,966.80

Gumroad $0 monthly fee

$353.85

$3,538.50

$35,385.00

Gumroad $10 monthly fee

$253.35

$3,613.50

$37,215.00

$39 priced eBook comparison table of profits between using EDD's free core plugin paired with a paid Stripe payments extension and a monthly Quaderno tax automation subscription. The table also assumes all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions when using Stripe).

EDD Wrap-Up

Stay away from Easy Digital Downloads.

If you want a basic looking WordPress plugin to handle your digital product deliveries, stick with WooCommerce.

WooCommerce looks better, has several more free extensions to expand your basic functionality (like the Stripe Payments integration) and looks like you get more for your money when paid extensions are necessary.

Overall Recommendations

When it comes to selecting a digital product delivery tool to help sell your eBook, the right setup really comes down to understanding 3 things about yourself: 

  1. How much effort do you want to spend on handling taxes?
  2. Where is your business located?
  3. Where are the majority of your target customers located?

Check out the following final recommendations to see which scenario best describes the right digital product delivery tool setup for you:

Gumroad Is a Solid All-Around Solution for Most 

If EU VAT and US sales tax compliance still feel too complicated or overly burdensome, you can still use Gumroad in exchange for higher transaction fees. Depending on your business situation, eBook price and number of copies sold, you may actually make more profit by using Gumroad.

Typically, you will pay more in fees per sale, but you won’t need to worry about EU VAT at all. Gumroad also lets you declare multiple US sales tax nexus states from within the Gumroad settings so you won't have to integrate with an expensive service like TaxJar either.

Remember that even with Gumroad’s higher transaction fees, you'll get your payment gateway, buy buttons, cart, digital product delivery tool and tax compliance services all from a single platform.

Want to see a good example of how Gumroad is used to successfully sell an eBook? Read this eBook case study on the Thrive Themes blog.

If you don't like Gumroad or fall into a category where another solution is more beneficial, my recommendations are broken down as follows...

Your Business Is Based in the EU

Integrate SendOwl with Stripe and/or PayPal:

With one monthly payment to SendOwl, you’ve got everything you need to both automate your eBook delivery as well as calculate, collect and report the correct EU VATs for your EU customers.

Since your business is not based within the US, you probably don’t have to collect any US sales tax.

Your Business Is Based in a US Origin-Based Sales Tax Nexus State

Integrate SendOwl with Stripe and/or PayPal:

Like your EU business owner counterparts, one monthly payment to SendOwl handles your EU VAT calculation, collection and reporting needs. You still need to register with one EU country tax office to report and remit all the EU VAT you collect.

And since your business is located within an origin-based sales tax rule state, you can easily manage your local municipal and district tax rate rules through SendOwl’s tax settings.

Your Business Is Based in a US Destination-Based Sales Tax Nexus State

Integrate WooCommerce + WooCommerce Services + EU VAT Compliance with Stripe and/or PayPal:

With this setup, you can keep your costs super low by letting the free WooCommerce Services extension handle your variable US sales tax calculation and collection needs (setting one free US sales tax nexus state through TaxJar) while you manually set up and frequently update the EU VAT Compliance extension to cover your variable EU VAT needs.

It’s not an ideal or simple setup, but you can probably make it work to minimize your overhead and still comply with your complex EU and US tax law situation.

Comprehensive Final Price Comparison

To put the cost of these final recommendations in perspective, check out the tables below to see how they compare with each other using the $7 and $39 eBook examples one last time:

$7.00 eBook

x10 sold

x100 sold

x1000 sold

$15 SendOwl + Stripe (Intl. fees)

- ($100.73)

$477.70

$6,262.00

$0 WooCommerce + Stripe (Intl. Fees)

$64.27

$642.70

$6,427.00

Gumroad $0 monthly fee

$61.05

$610.50

$6,105.00

Gumroad $10 monthly fee

- ($55.45)

$525.50

$6,335.00

$7 priced eBook comparison table of profits between all the final Digital Product Delivery tools recommended in this review. The table assumes all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions when using Stripe).

$39.00 eBook

x10 sold

x100 sold

x1000 sold

$15 SendOwl + Stripe (Intl. fees)

$206.79

$3,552.90

$37,014.00

$0 WooCommerce + Stripe (Intl. Fees)

$371.79

$3,717.90

$37,179.00

Gumroad $0 monthly fee

$353.85

$3,538.50

$35,385.00

Gumroad $10 monthly fee

$253.35

$3,613.50

$37,215.00

$39 priced eBook comparison table of profits between all the final Digital Product Delivery tools recommended in this review. The table assumes all eBooks sold were international to provide the most conservative fee analysis (International transaction fees are 1% higher than US transactions when using Stripe).

Which Digital Delivery Service Will You Choose?

After learning about the complexities of integrating payment gateways with digital product delivery tools and tax automation services, which setup discussed above feels like the best fit for your eBook business needs?

Let me know what you think in the comments below!

About the Author Matt Totten

Matt's a geologist turned online marketer and digital nomad. He's a Modern Manimal on a mission to cultivate a high-tech, hunter-gatherer lifestyle within our exceedingly domesticated world. When away from his tech, you can find him studying complex human movement through random play or practices like Aikido, AcroYoga and Barefoot Running.

  • Joe says:

    No one I know that sells digital products bothers with collecting and submitting taxes. Unless you’re a large volume seller, do you really think you get noticed by any taxing authority ?

    • Shane Melaugh says:

      Here’s my take on this: in my estimate 90%+ of online businesses are not tax compliant. The question is: how much risk do you want to bear? Or, to put it differently: how many of the people who are now shrugging at this and dismissing it will remain calm and take responsibility if they lose their business and have to pay a huge fine at some point in the future?

      Because if you aren’t okay with losing your business and paying a huge fine, you should ensure yourself against that happening.

      As it is, nothing big has happened yet, but we’re in a position where (especially EU and US) governments can drop the axe on the majority of online businesses if they feel like it. Or, you know, if they need some cash.

  • Man! That is a helluva article. A must-read for anyone with the intention to sell an e-book.

    • Matt Totten says:

      Thanks Martina!

      I know it’s not the most interesting topic in the world, but like you say, I think the review is super useful for anyone trying to sell an eBook or digital product and wants both happy customers and a tax compliant online business.

  • Hey Matt!

    I’ve been waiting for this piece to come out ever since you published your first article on the wonders of Gumroad.

    Unbelievable!

    From what you’re saying, Gumroad seems to be the all-around best solution for a starting online business. Hassle-free, great customer experience, and fully compliant.

    Take a look at http://productpress.me/. You might want to write a review on it. After reading your first article, I searched for plugins that integrate WordPress with Gumroad to create membership sites. That’s the solution I found. While not perfect, it’s a great solution for most membership needs.

    • Shane Melaugh says:

      We might check that out, yes. Thanks for the tip!

      In my opinion, it’s a pretty big leap from just delivering a PDF to a membership site. I suspect that for my use, I’d be very unsatisfied with the limitations of something like Gumroad + a plugin for delivering online courses or managing memberships.

      • “I’d be very unsatisfied with the limitations of something like Gumroad + a plugin for delivering online courses or managing memberships.”

        LOL! I bet you would.

        It’s just an additional option to use Gumroad as a payment system and deliver your product on your own website. For a simple course, it can work just fine.

  • Mike says:

    This sounds like a serious problem in search of a simple, all-in-one solution.

    I would happily pay for it!

    And can I make a suggestion? Can you compare the Amazon Kindle store?

    • David M says:

      Here’s the quick-take. Best-case scenario, you pay Amazon 30% to sell and manage your product. Worst case you pay them 65%.

      Amazon Kindle Pros:
      -massive awareness of platform
      -hassle-free sales environment
      -all financials/taxes etc handled by Amazon
      -automatic analytics
      -up to 70% royalties on sale items priced between $2.99-9.99
      -slight credibility boost from Amazon platform
      -customer security concerns answered by Amazon platform
      -relatively friction-free customer sales experience

      Amazon Kindle Cons:
      -massive competition of titles/hard to find your book
      -must be in .mobi/kindle file format only (no PDFs)
      -royalty drop to 35% on list prices above $10

      The selling strategy you choose depends on your objectives and market. For niche products with a specialty audience you will maximize your profitability if you sell on your own domain using the tools outlined in posts on this blog.

      Good luck to everyone who’s going to publish this year.

      • Matt Totten says:

        Thanks for such a thorough and concise answer to Mike’s question David!

  • david m says:

    Hi Matt,
    1) thank you for an excellent review • information packed :: action oriented.
    2) would you kindly consider adjusting the cookie on the lead lightbox for the site to 1x visitor or something so I don’t have to keep clicking it off. TIA and cheers.

    • Matt Totten says:

      Thanks very much David…glad to hear the review hit the mark for you!

      I’ll chat with Shane about the display frequency of the opt-in form lightbox as well.

  • Hi Matt,

    Thanks for your indepth (and highly useful) tutorial.

    Quick questions:

    What if your online business isn’t located in the EU or in the US?

    Is the tax issue still a major factor to consider and is a service like SendOwl enough for businesses located away from these regions?

    • Matt Totten says:

      Thanks Nicholas,

      If you’re located outside the EU and US, you need to figure out what your country’s sales tax rules are. I don’t have any knowledge outside my research of the EU and the US at the moment. Definitely, you’re supposed to collect and remit EU VAT for all of your EU customers however.

      SendOwl also allows you to set additional tax rules for almost any country so if you need to collect taxes for another country on top of the EU, you can do that.

  • Kim Rormark says:

    This is even more complicated than dealing with different tax rates in different countries. In my understanding we also need to differentiate between various types of digital products.

    Online courses are digital products but under certain circumstances (which is not clear to me) not tax compliant. With some level of live appearance from the instructor, you don’t have to pay the tax.

    However its hard to find any useful and reliable information about this. It seems to be a grey zone making even more headache for online business owners.

    • Matt Totten says:

      You make a good point Kim. Tax law is a massive headache and hard to interpret what compliance looks like.

      I didn’t mention specifics in the article, but certain digital products like eBooks even qualify for a lower EU VAT rates in certain EU countries (if they have a registered IBSN #, I believe) so it can definitely get complicated.

      This is basically why I put a big disclaimer in the post and video because it’s up to us business owners to do our own due diligence to understand what’s true for our own unique situations before acting.

      However, hopefully the info in this article helps give everyone a good starting point to achieve compliance to avoid any big surprises down the road.

    • Shane Melaugh says:

      From what I understand, if the product you sell is a service, it doesn’t fall under the EU VAT digital product rules.

      I believe that if your product is a series of live training sessions and there are either no recordings of those sessions available or the live sessions are and remain the main part of your product for all customers, you have plausible deniability. If anyone wants to come after you for taxes, they will try to nail you on any part of the product that is delivered automatically and/or downloadable, I’m sure.

  • Thomas says:

    Hmm…very interesting read. When we chose the platform a while ago we were under the impression that Woocommerce is more of a specialized physical-product-selling plugin based on shopping cart interface, and as such isn’t exactly fit for digital goods with custom landing pages and support for free updates.

    And because we didn’t test WooCommerce extensively (e.g., missed the redirect-sale-page-to-cart feature), we didn’t see a way of integrating WooCommerce into the sale funnel.

    Long story short, we did more testing on a few digital-good/membership plugins and ended up with EDD. Surprise!.

    While the price tags for the extensions are definitely a bit off the chart, if you choose them judiciously, EDD actually delivers a bit digital specialties that’s not being considered in this post:

    – download link management: have download link expires within a certain time frame, customers download digital good without seeing the URL (which is masked anyway).

    – Quasi-Membership feature: customers get an account on the website, from which they can login and access to all purchased products.

    – Delivery of new update: The login also allows customers to access the newest version of digital good.

    For sure, there’s also the parts with email list integration, PDF invoice and automated emails (e.g., confirmation email, abandon cart email) that require more extensions. Even with those features we still had to CSS our way to more design consistency.

    All in all, it took a while, but once the system is automated it works on its own (we’re based in Canada so EU VAT could still be an ongoing management issue).

    So does EDD make sense? Well, it gives you more creative and brand control then say SendOwl or Gumroad, and offers more specialized digital good features than WooCommerce, in exchange for a yearly cost that is not transaction-based.

    By the way, for affiliate program you might want to get something like AffiliateWP which is yet another cost for sure. The pricing model for EDD is definitely a bit off, and this stemmed from Pippin wanting to make the base plugin free in the beginning. Heck, even him regretted about that decision!

    Of course, if there’s a way doing those in WooCommerce we would love to redo the system from scratch! We already experimented doing everything using MemberPress, but the inflexibility of the hard-coded pages made us abandon that choice… Not an easy ride that’s for sure. But then, this is why there’s room for Thrive Theme to pierce through the membership plugin niche. :)

    • Matt Totten says:

      Thanks for your in-depth comment Thomas!

      When it comes to download link management, SendOwl and WooCommerce both allow you to limit the number of downloads and set an expiry duration after which your download links no longer work. Gumroad however, does not have this feature.

      As for the quasi-membership and new update features you mentioned, theses are definitely cool to have, but probably overboard for the purposes of selling an eBook. As your online business grows and your digital product line expands (as I’m guessing is the already the situation for your business), they can become more important to have.

      I agree with you about the lack of brand control with SendOwl and Gumroad…that’s definitely one of the downsides to using those platforms (especially Gumroad), but probably less of a big deal for people just starting out.

      As for managing an affiliate program, SendOwl definitely has the upper hand here (it’s included in their $15 per month plan). I can’t comment on AffiliateWP myself yet as I have no experience with it, but I’m not surprised to see their pricing is quite costly now glancing at their pricing page.

      And I’m in total agreement with you…I can’t wait until the Thrive Membership plugin arrives! ;-)

  • Jim says:

    Interesting, about half of the US states do not tax digital products. So if your nexus is one of these states, you should be good. See https://quaderno.io/blog/sales-tax-digital-products-us/ for the details.

    • Matt Totten says:

      Thanks for sharing this Jim! That Quaderno article looks like a comprehensive, US State-by-State sales tax rule reference. I’ll make sure to include it within the review!

  • Gio says:

    What about Fastspring?
    Or Sellfy and Selz?

    • Matt Totten says:

      Thanks for suggestions Gio.

      Just doing a quick look at them:

      Selz and Sellfy look super expensive as they require payment gateway integrations with PayPal and/or Stripe (so you’ll be paying those transaction fees), additional Selz and Sellfy transaction fees, as well as each platform’s monthly subscription fees.

      FastSpring looks a bit vague about their pricing and features at first glance so I can’t really comment about their service yet. Since they’re not being upfront about their pricing, I’m guessing its pricey and probably overkill to sell your first eBook.

  • Lewis Evans says:

    Excellent article and video, thanks. Do Gumroad or Sendowl give you the option of different formats of ebooks? I want to be able to include epub and mobi as pdfs are often compromisable (even if marked with an email address).

  • Peter says:

    Hi Matt,

    It would be super awesome if you could continue this blog series with an article about selling services online, i.e. coaching or similar things. In my use case it’s useful if I can use the service to automatically send an email/deliver at least a PDF with the info I need from the client after a sale, so that I don’t have to do that manually.

    Writing about selling services would also be interesting because the EU VAT rules don’t apply.

    • Matt Totten says:

      Hi Peter, those are some great use cases to expand our Payment Gateway review series with. It’s in my research queue now…cheers for the comment!

  • Matt says:

    Hello,

    It seems that either SendOwl or Gumroad are the best solutions when you already have a custom sales page for selling your ebook, like in my case, and don’t need/want storefront platforms like WooCommerce or Shopify.

    I would like to ask you: I’m selling my first ebook and I’m still unsure which service is best for me, have you researched other services beyond SendOwl, Gumroad and EDD? What about e-Junkie, Sellfy, DPD and Selz? In my case, I’ve set up a WordPress sales page in my own domain and edited with Thrive Architect, and I need a service that allows me to:
    – Integrate my buttons with PayPal (apart with Gumroad)
    – Automatically deliver the PDF after purchase
    – Automatically email a free page upon request
    – Collect/remit EU VAT
    – PDF Stamping
    – Enables complete tracking of customer’s purchase
    – Limits download number
    – Mobile responsive

    I’m a US resident but in my state digital good sales are exempt from sales tax, so I only need a EU VAT collection service.

    Are SendOwl and Gumroad my best bets, or are you aware of better alternatives that can fit my case? I only have one ebook to sell on one page.

    Thank you.

    Matt

    • Matt Totten says:

      Hi Matt,

      I think your best bets are either Gumroad or SendOwl to sell your first eBook. Because you need the PDF stamping, you’re going to have to pay for a more expensive SendOwl membership so perhaps you should start with Gumroad and then think about switching to SendOwl once your sales pick up.

  • Thanks for sharing the comprehensive comparisons.
    What if a person is selling digital products from Australia with only a few US purchases – What do you think is best starting out?

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