So you finally managed to finish your first eBook? That’s great...congratulations!
After all those months of struggling to turn your first writing idea into an info-product reality, it’s done and you’re ready to start reaping the benefits of your hard work with some online sales.
Now you just have to find a way to accept money from your audience and you’ll literally be in business.
The problem is that online payment systems can be complex and tough to integrate smoothly with your website. You’re also handling people’s credit card digits so it’s important to get this sales step right.
Read on to learn about the 3 major online payment systems (Stripe, PayPal and GumRoad) so you can launch your eBook now with the payment gateway that’s right for you.
Here at ActiveGrowth, we always promote building and operating your business on platforms you own and control.
For the most part, that means selling your products on your own website and building a mailing list to reach your audience instead of relying solely on social media platforms like Facebook or Instagram to do it.
Assuming you’ve done that and are ready to sell your eBook through your website, how exactly do you handle the payment and delivery side of each sale?
Well first of all, you don’t need to build a full blown membership site costing you hefty monthly subscription fees
to sell a simple PDF eBook.
That means I won’t be discussing membership services or plugins like MemberMouse, ClickFunnels or Wishlist Member in this review.
Instead, I’m going to walk you through 3 payment gateway services that meet a simple eBook payment and delivery set of criteria:
Read on to find out how Stripe, PayPal and Gumroad stack up when it comes to selling your new eBook.
If you want to connect a basic payment system to sell your eBook (or any one time product purchase for that matter), Stripe is an attractive solution.
If you don’t mind dealing with some HTML code on your site, you can have your buy button, payment form and purchase confirmation page up and running in minutes.
And if working with code makes you queasy, there’s a freemium WordPress plugin you can install to make the setup process 100% non-techie. I’ll discuss this plugin integration shortly, but first let’s talk about the different aspects of using Stripe to sell your eBook.
The good news is that registering for your Stripe account is free.
However, once logged in to your dashboard, you’ll have to enter some extra personal details, info about your company as well as your bank digits to apply for a live account. Once submitted, you’ll be ready to start accepting payments immediately.
Stripe also provides a test sandbox for their payment system so you can get your buttons, forms and digital delivery process working on your sales page before going live.
Stripe’s system to get your payment gateway working is pretty simple. You’ll get:
Without any fancy API integration and some basic copy/pasting of Stripe’s HTML code, you can embed the Stripe button and payment form directly on your eBook’s sales page.
The best way to deliver your eBook with Stripe is through their redirect link feature after purchase.
The simple way to do this is to create a thank you page on your website that includes a download button for your eBook so customers will have instant access directly after purchase.
Although this delivery method is simple, it’s not foolproof.
People can share your download link with others, but as long as you tell Google not to index it for searches (which you can do with a free SEO plugin like Yoast), it probably won't be a big enough problem to warrant paying for an expensive shopping cart system...at least when you're just starting out.
When your eBook becomes a hot commodity however, you can then upgrade your digital delivery process using the cash you're making from your growing eBook sales.
Since it's important to comply with applicable sales tax and/or EU VAT laws when selling your eBook, Stripe integrates with 5 different tax and VAT calculation/collection services to help you manage this: Avalara, Taxamo, TaxJar, Quaderno and Octobat. These services do add monthly subscription costs to the Stripe transaction fees which will impact your eBook profit margins.
If your eBook sales can afford a tax app integration, the good news is that these services use API integrations within the Stripe dashboard that apply the collection calculations directly to payment forms once enabled.
When it comes to email marketing service integrations, Stripe is more limited. Stripe’s 2 most notable email marketing integrations include Drip and ONTRAPORT.
However, if you connect Stripe with the online automation tool Zapier (another paid service), you can make every Stripe purchase trigger an automated workflow to add your new customers to other email marketing services (like ActiveCampaign or ConvertKit). As of this writing, Zapier currently offers 100 "Zaps" (a.k.a. integrations) of Stripe with popular applications.
And if you’re just looking to DIY your Stripe payment gateway on a WordPress website without having to code anything, the most helpful and cost effective tool to use is the WP Simple Pay plugin.
The WP Simple Pay is a freemium plugin that allows you to easily connect your WordPress website to your Stripe account via API keys.
WP Simple Pay allows you to more easily modify Stripe features like your payment form text, payment confirmation page text, payment error page text, and pricing.
For the purposes of selling your eBook, the free (Lite) version of the plugin is very useful.
You simply create a Stripe payment form within the plugin on your WordPress dashboard and then add its corresponding short code where the “Buy Now” button needs to go on your sales page.
Upgrading to one of WP Simple Pay Pro’s yearly subscription options is only necessary when you need features like custom fields, user-entered amounts, coupon codes, limited tax rate calculation and collection and subscription payments.
Stripe’s pay-as-you-go pricing model is straightforward:
Stripe charges you a 2.9% + 30¢ fee on each payment they process for you.
For international card charges, there’s an additional 1% fee added.
That means the value of using Stripe to sell your eBook will depend primarily on the price you’re able to charge for it. To give you an idea what Stripe’s fee structure looks like for each eBook sold at different price points, check out the following table:
Stripe US fees:
As you can see from the table, Stripe becomes a much more attractive payment gateway for selling your eBook as the price of your product increases.
If you’re considering using PayPal to handle payments for your new eBook, it definitely has the advantage of being an industry leader many customers trust.
However, there are 3 significant drawbacks to using PayPal when it comes to selling simple digital products.
First, PayPal adds several unnecessary steps to the checkout process to push customers to open a PayPal account if they don’t have one. Each PayPal purchase forces customers to dance through a series of checkout pages that increase the complexity of each sale.
Second, the PayPal button setup doesn't send people directly to your confirmation page after purchase. Depending on which checkout experience your customers get, they'll have to click on a small and easy to miss link and/or wait for 10 seconds before seeing their download page.
That's not a very reliable delivery method so you'll need a backup system that can send the download to those customers who miss their download page.
And finally, PayPal doesn't support EU VAT rules for digital sales so you won't be allowed to sell the ebook to anyone in the EU unless you integrate it with a system that can handle the VAT issue for you.
Practically speaking, PayPal requires additional VAT calculation and digital delivery services to make it a reliable payment gateway. Know that these integrations can increase its overall cost and complexity to sell your eBook.
To add a “Buy Now” button to your eBook sales page through PayPal, you must first upgrade to a Business Account.
Don’t worry, this step is simple and approval is automatic once you enter your details.
The easiest way to add a PayPal “Buy Now” button to your sales page is by copy/pasting either the HTML code or an email link that PayPal generates for you after creating the product on your Business Account dashboard.
Find the “Create PayPal payment button” option and then work your way through the simple form to generate your first buy button.
Some nice features built into PayPal’s button creation process include the ability to add drop down selection menus, shipping rates, a basic sales tax percentage, and inventory tracking.
The most important of these extra features for the sale of your eBook is the sales tax collection rate. Unfortunately, PayPal doesn't help you much with this complex issue as it's up to you to set the correct percentage. You'll need to do your own due diligence to make sure you're in compliance with the US laws that apply to you.
Once your PayPal button is complete, you can either embed the resulting button HTML code on your sales page or use the PayPal generated email link within your own "Buy Now" button to maintain your native site design (like in the example screenshot below).
Like Stripe, you can use a redirect link after purchase to send your paying customers to a thank you and digital download page, but depending on which checkout experience your customers get, they'll have to click on a small, easy to miss link and/or wait 10 seconds before seeing their download page.
Again, that's not a reliable delivery method so you'll need need a backup delivery system like SendOwl to make sure your customers get their eBook.
However, PayPal does give you the ability to add a purchase cancellation redirect link to your payment flow.
If you end up using PayPal, consider leveraging this cancellation redirect as a way to send hesitant customers to a downsell page.
If you want to use PayPal for sales in both the US and EU, PayPal can be integrated with sales tax or VAT calculation/collection services like Avalara, Taxamo, TaxJar and Octobat. However, unlike Stripe, these integrations happen outside the PayPal environment (on the tax service app dashboard).
Also, PayPal has over 85 automated workflow integrations with Zapier including ActiveCampaign, ConverKit and AWeber so these "Zaps" make it possible to add new customers to your list after each purchase.
Like Stripe, PayPal charges 2.9% + a fixed fee depending on the currency used (currently 30¢ for USD denominated transactions) for purchases made within the United States.
Although that fee structure is the same as Stripe’s for domestic purchases, PayPal charges more for international transactions. In those cases, the PayPal transaction fee jumps up to 4.4% + the fixed fee.
Check out the table below to see how the PayPal fee structure changes when selling your eBook internationally:
PayPal US Purchases:
As you can see, PayPal is more expensive than Stripe when it comes to international purchases so take this into account if your target customers are outside the US.
Of the three payment gateways reviewed, Gumroad stands out as the most complete payment gateway and delivery system for your eBook.
That's because Gumroad handles payments, sales tax and EU VAT collection, as well as the secure digital delivery of your eBook. It’s super easy to start an account, upload your eBook PDF file, embed a buy button on your sales page and then launch your product without needing to worry about any redirect links or potential lost revenue from URL sharing.
Signing up for your free Gumroad account is quick and easy.
Once activated, you can instantly upload your eBook PDF file to create your first Gumroad product.
You then set your price, write some basic sales copy and voila! Gumroad generates HTML code (and an email link) to embed a buy button and payment form on your sales page.
Let's walk through the three different ways to embed a Gumroad buy button and payment form on your eBook sales page:
The simplest way to use Gumroad on your sales page is through linking. After creating your product on the Gumroad dashboard, you’ll get access to a link you can paste into a native button (just like with the PayPal email link).
Although product linking allows you to maintain design consistency on your sales page, it does take customers away from your site to complete the purchase. If you want to keep customers on your site throughout the entire purchase process, consider using the following 2 Gumroad payment form options...
Another way to add the Gumroad payments to your site is through their overlay feature.
You just take the auto-generated overlay HTML code and embed it on your eBook sales page where you want the buy button to appear. When live, a Gumroad buy button is loaded and an overlay payment form pops up when clicked.
Note that the overlay function does not work the same for mobile devices. When customers click the buy button for your eBook on a mobile screen, a new window will appear in their mobile browser and bring them to a Gumroad hosted payment page.
The last method for adding Gumroad payments to your sales page is through the embed widget feature. Again, you just copy the Gumroad HTML code and apply it into your sales page where you’d like the widget to appear.
Unlike the overlay option, the embedded widget form allows both desktop and mobile customers to purchase your ebook directly from your site.
Gumroad is the only product reviewed here that takes care of your digital product delivery after purchase. Once a customer completes their payment, a receipt and download button for your eBook are instantly provided on the purchase page.
With Stripe and PayPal, it’s up to you to make sure the customer receives their eBook through either redirect links or email delivery.
Also, Gumroad offers an extra layer of theft protection to your eBook through PDF stamping.
The PDF stamp option adds the buyer's email address as a special graphic to the first page of their digital copy. Unique-to-customer stamps prevents the sharing of your eBook with others as the customer's name gets tagged to every duplicate copy.
Although Gumroad has an official WordPress plugin available, it only has 1000+ active installs, 3 reviews and was last updated multiple years ago so I didn't even bother testing it. It's best to stick with the sales page integrations discussed above.
Gumroad does offer some additional integrations with services like ConvertKit, Drip and Zapier.
Available Zapier automations with Gumroad number fewer than Stripe or PayPal, but include zaps to email marketing services like ActiveCampaign, AWeber and MailChimp.
Gumroad's sales tax and VAT collection services are worth special mention compared to Stripe and PayPal.
For US tax purposes, Gumroad calculates, collects and remits sales tax on sales to customers in states where you have nexus.
For European VAT purposes, Gumroad handles the entire headache for you so no need to worry about it. Gumroad buys your product from you and then sells it to customers on your behalf so Gumroad becomes the responsible party for handling European VAT remittance.
For all the simplicity Gumroad provides, they do charge a premium for it.
There are 2 pricing tiers with the Gumroad payment gateway:
If you choose this entry pricing tier, your payment forms will maintain Gumroad branding, you'll only have access to Gumroad’s default style payment form, and your cost per transaction will be much higher than Stripe or PayPal:
8.5% + 30¢ fixed fee per transaction.
For a $10 a month subscription fee, you'll gain access to features like additional Gumroad payment form templates, customer messaging, and CSS design customization. Most importantly, your price per transaction becomes considerably cheaper:
3.5% + 30¢ fixed fee per transaction.
As a side note, Gumroad also offers an internal promotional service called Discover. Discover basically promotes your eBook to buyers of similar products.
Participation in Discover is optional and adds an extra 10% to whatever your transaction fee structure is, but only to purchases made directly through the Discover service.
Take a look at the eBook earnings tables below to compare how the 3 different payment gateways stack up against each other at different quantities sold.
It’s helpful to see how the price you set and the number of eBooks sold impacts which payment gateway will provide the best payout for you:
When you compare the no monthly fee Gumroad plan vs the $10 per month plan (calculated for 1 year or $120), the entry plan actually works out better for lower eBook prices and lower sales.
The $10 monthly subscription fee only becomes advantageous at higher prices and higher numbers of sales.
Stripe is the winner when it comes to transaction fees. Their domestic and international purchase fees outcompete PayPal and Gumroad in most of the pricing scenarios shown above.
However, due to the complexities of digital delivery and tax collection, you may find it necessary to integrate Stripe with additional subscription services that make Stripe much more expensive than it first appears.
If you’re a developer, Stripe is the payment gateway for you as the API integration possibilities are vast.
And if you’re not a developer, Stripe still offers a simple, non-techie payment solution for accepting your eBook payments. With a little HTML code copy/pasting or integration with the WP Simple Pay plugin, you can have a payment form up and running on your eBook sales page in minutes.
Because PayPal has become the industry leader for online payments, you can’t overlook the fact that customers are familiar and comfortable buying online through it.
Whether you use the email link or HTML code copy/pasting methods, setting up PayPal buy buttons on your eBook sales page will be fast and easy.
However, because PayPal adds additional checkout steps, charges higher international transaction fees, provides an unreliable digital delivery method and doesn't cover EU VAT collection rules, a solution like Gumroad is probably going to be much simpler and safer for you to use when selling your first eBook.
Gumroad definitely offers the smoothest tax collection and cart to customer experience for both you and your customers. However, such convenience comes with some design inflexibility and higher transaction fees.
Gumroad charges the most in transaction fees out of the 3 payment gateways reviewed, but those extra fees include important features like automated eBook delivery, sales tax + EU VAT calculation, collection and remittance, as well as some eBook theft protection.
When you factor in the cost of hiring apps like TaxJar and SendOwl to take care of these jobs for you, those extra Gumroad fees become a bargain.
If you start out using Gumroad for the convenience it offers, only consider switching to Stripe or PayPal once you scale your sales to justify the cost of hiring more advanced services like SendOwl for product delivery and TaxJar for VAT and tax management.
You'll have to do the math to know which setup translates into better profit margins once subscription fees, transaction fees, your eBook pricing and number of sales are all accounted for.
The bottom line is that payment gateways aren't free, but you must have a way to collect money if you want to sell something online.
Pick whichever gateway fits your current needs best so you can focus on making your first sale!
I know setting up payment solutions can be intimidating, but I hope this post provides you with enough insight to make the right choice for your particular situation.
Once you've managed to sell several eBook copies or have another product to offer on your website, check back in with the ActiveGrowth blog. I'll have a new review about shopping cart and digital delivery tools waiting for you.
Do you have any thoughts, questions or comments about payment gateways? Join the discussion in the comments section below!
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.
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