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Ask HN: Gumroad Overrated – Just Me?

I can't be the only one who has noticed this: According to their own website, 130.103 creators together earned over $747.716.634 on Gumroad. Sounds amazing right? Well, Gumroad has been out there for about 11 years. ($747.716.634 / 130.103) / 11 = $522.47. Gumroad takes a 10% fee as well, so that's actually $470.22. The average Gumroader has made about $470.22 on average per year. I mean, not bad, but not exactly great either? You can make that much and more by selling old stuff every year on ebay/Craigslist/... Is anybody actually making significant money on Gumroad - apart from perhaps the top 0.5% of users or so who actually may be making 5 or more figures a year?

toastal 4y ago
Gumroad banned me because their CAPTCHA required too many scripts to be enabled one by one with uMatrix (which I used at the time). I ended up submitting the same post about 4 times because the error messages were incomplete and and poorly designed so I clicked submit again. When I emailed about the situation, they said they don't allow disputes and banned my email too. Moral of the story: don't skimp on error messages and make sure your CAPTCHA actually works if you really need it.
- jdthedisciple 4y ago
  That sucks. Why didn't you just allow all scripts for the moment, for this specific site?
  - toastal 4y ago
    It's hard to tell if you need just one or two more scripts instead of several. I was a new user to the add-on, but also developers tend to suck at proper error handling and messaging around it.
jdthedisciple 4y ago
I gave this a second thought and underwent a thought experiment: Let's consider 2 possible alternative scenarios: I) 80% of creators are making 20% of the money, but the other 20% are rather successful, making 80% of the money. Thus, if you are at least among the top 20%, you will make, on average, per year, about (0.8747.716.634 / 0.2130.103 / 11 * 0.9 = $1880,87 --- II) 80% of creators are actually idle, making 0% of the money. All of it goes to the 20% of active creators. Thus, each of them would be making, on average, per year, about $1880,87 / 0.8 = $2351,09 --- Maybe these scenarios are closer to reality for actual creators on the platform. But even then, it's not amazing sums for a whole year. For some, it wouldn't even cover a single monthly rent. Then again, for others this might be enough to cover several of months of living costs.
- jdthedisciple 4y ago
  I forgot to mention that the reason I use 80/20 is because of the famous Pareto Principle [0] which interestingly shows up over and over again in all kinds of human systems, thus making for a reasonable assumption in such analyses. [0] https://en.wikipedia.org/wiki/Pareto_principle https://en.wikipedia.org/wiki/Pareto_principle
leros 4y ago
You're numerical analysis is not wrong, but the implication that GumRoad is overrated is incorrect. There is nothing wrong with a platform like Gumroad only having a small percentage of very successful users. Gumroad itself is no magic bullet that makes you money - that depends on you as the user to make a good product and market it properly to get sales. Gumroad is just a platform. You mentioned eBay as an example. I bet 99% of ebay users have made less than $100 selling on eBay, but eBay is still a huge successful platform. Same for GumRoad I'm sure.
- jdthedisciple 4y ago
  I see what you're saying, perhaps it was only overrated compared to my expectations given their front page marketing. Do you have personal experience with Gumroad to share? That would be interesting.
  - leros 4y ago
    I pay for a few software licenses through Gumroad. The people on the other end are successful small businesses.

toastal 4y ago

Gumroad banned me because their CAPTCHA required too many scripts to be enabled one by one with uMatrix (which I used at the time). I ended up submitting the same post about 4 times because the error messages were incomplete and and poorly designed so I clicked submit again. When I emailed about the situation, they said they don't allow disputes and banned my email too. Moral of the story: don't skimp on error messages and make sure your CAPTCHA actually works if you really need it.

jdthedisciple 4y ago
That sucks. Why didn't you just allow all scripts for the moment, for this specific site?
- toastal 4y ago
  It's hard to tell if you need just one or two more scripts instead of several. I was a new user to the add-on, but also developers tend to suck at proper error handling and messaging around it.

jdthedisciple 4y ago

I gave this a second thought and underwent a thought experiment: Let's consider 2 possible alternative scenarios: I) 80% of creators are making 20% of the money, but the other 20% are rather successful, making 80% of the money. Thus, if you are at least among the top 20%, you will make, on average, per year, about (0.8747.716.634 / 0.2130.103 / 11 * 0.9 = $1880,87 --- II) 80% of creators are actually idle, making 0% of the money. All of it goes to the 20% of active creators. Thus, each of them would be making, on average, per year, about $1880,87 / 0.8 = $2351,09 --- Maybe these scenarios are closer to reality for actual creators on the platform. But even then, it's not amazing sums for a whole year. For some, it wouldn't even cover a single monthly rent. Then again, for others this might be enough to cover several of months of living costs.

jdthedisciple 4y ago
I forgot to mention that the reason I use 80/20 is because of the famous Pareto Principle [0] which interestingly shows up over and over again in all kinds of human systems, thus making for a reasonable assumption in such analyses. [0] https://en.wikipedia.org/wiki/Pareto_principle https://en.wikipedia.org/wiki/Pareto_principle

leros 4y ago

You're numerical analysis is not wrong, but the implication that GumRoad is overrated is incorrect. There is nothing wrong with a platform like Gumroad only having a small percentage of very successful users. Gumroad itself is no magic bullet that makes you money - that depends on you as the user to make a good product and market it properly to get sales. Gumroad is just a platform. You mentioned eBay as an example. I bet 99% of ebay users have made less than $100 selling on eBay, but eBay is still a huge successful platform. Same for GumRoad I'm sure.

jdthedisciple 4y ago
I see what you're saying, perhaps it was only overrated compared to my expectations given their front page marketing. Do you have personal experience with Gumroad to share? That would be interesting.
- leros 4y ago
  I pay for a few software licenses through Gumroad. The people on the other end are successful small businesses.