Sure it does, but people don’t care about it. Some of them back off if they don’t see a PP button, apparently.
Glad to see you’ve signed up to Paddle!
As you probably know by now, by selling through us you won’t have to deal with VAT MOSS at all – we’ll handle everything from customer data collection + storage through to filing VAT returns. (You won’t have to go through lengthy signup processes either.)
Once you finish setting up that product in your Paddle dashboard, you’ll just have to add a checkout link to your website. And while Payhip charges you 5% on top of PayPal fees; Paddle only charges 5% + $0.50 per sale, and that includes a checkout with PayPal + debit/credit card options.
Feel free to reach out if you have any questions! fabio@paddle.com
Wow, that’s definitely not my experience with Fastspring. I’ve never had to talk to anyone from Fastspring on the phone, and especially not a salesperson. Admittedly I signed up several years ago, so I guess things have changed.
One of the things that impressed me was that Fastspring created the entire purchasing form for me, they added in all my products with screenshots and descriptions and prices from my website. (Which was actually unnecessary, as I also use their API instead.) Sad if FastSpring’s service & support has changed.
I’ll also give a +1 to SendOwl - while I haven’t used it, I seem to remember running into @george_palmer on a conference bus in Portland & talking about e-commerce. He knew his stuff, I was impressed!
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I registered with FastSpring last summer. They reviewed my website in a few hours and that was it. Their support and their service is very good.
My experience with FastSpring is great. I signed up some years ago and I don’t remember exactly how it went but there were no phone calls for sure and I think it was quite quick. Depending on your needs it might take a while to set it up but their app/backoffice and service is impressive. Support requests are always resolved within the same day and they even contact the client on your behalf if needed. I was very relieved to know that I’d had to do anything about the new VAT rules because they took care of everything. Highly recommended.
I think it’s time for an update.
Gumroad is one of the easiest sites to use. A six month baby who can’t change his own nappy could sell a product from Gumroad. That’s how easy it is. So when I was looking for an alternative, I wanted something as easy to use.
Before we go on, a rant. The exact opposite of Gumroad is FastSpring. It’s like the CEO of FastSpring said:
Let’s make the website as hard to use as possible, and let’s get a programmer from the 90s using COBOL to program it. We’ll show these customers!
FastSpring have a long and complicated checkout form you can’t change. I wanted to remove the phone number from it, just so that my buyers don’t have to give unnecessary details. But there is no way to do so. I emailed customer services, but they said I couldnt change the form “To prevent fraud”. They would remove it if I sold a few things, which leads me to believe they think I’m the fraud.
I then asked them why I couldnt see Paypal in the options. Because my account was in trial mode, they said. I’d have to raise a ticket. I did so, but was then told I’d have to create a product, fill out a form describing what it was, have it approved, then they would approve my account and move it out of trial. And this was after I had to give my limited company’s address, my accountant’s address and wait four days to have my account created in the first place. At this point, I was like, Are you fu%^&g with me?
And FastSpring have the highest charges in all the companies I have seen. Bad service with high charges. A winning combination!
End of Rant
That left PayHip and Paddle. PayHip is one of the easiest websites to use, almost as easy as Gumroad. I found it great to use.
That said, I decided to go with Paddle for now. They accept both cards and Paypal, have options like setting discounts, coupons (I think, I haven’t used it yet), and they also offer recurring charges.
On the downside, they aren’t as easy to use as Gumroad or PayHip, their help doc is pretty thin, and their webapp is still pretty basic.
But I still chose them because I like the overall package. Even sold a few items this morning. We’ll see how it goes long term with them.
Am I right in thinking there’s no actual reliable way of receiving the billing address from a Paypal IPN? Therefore a solution that integrates simply with Paypal will have to collect an address up front?
I really think Paypal integration is important for B2C businesses, as per http://www.elstensoftware.com/blog/2014/08/18/paypal-versus-stripe-customer-survey-surprising-result/
I switched to Paddle.com from Gumroad yesterday and currently testing them out for one of my products. Surprised to see a tax charge for a purchase made by a customer in EU. I thought the VAT and all was included in the 5%+50 cents fee per transaction. Are you paying the taxes separately too?
Also, about services like Payhip and Sendowl, aren’t those more like E-junkie and less like Gumroad in the sense that they don’t hold payments? As someone in India, could I have Payhip process both cards and Paypal for me, because Stripe is still not available for us yet?
Checkout the EU VAT rates. 5%+50c isn’t enough to cover it. Besides, Paddle need to make their margin independent of the country you sell to, otherwise they’d do their best to discourage you from selling to high-tax countries.
No. Like @Richard said. Why would Paddle pay your tax from their profits?
You can choose one of 2 options:
- The tax is included in price, so customers always see same price, and the tax comes from your profits.
2, The tax is added to price, so customers in EU pay extra.
I choose option 2, as why should I lower my profits to help some government collect taxes (and I say this as someone who lives in Europe).
It’s more complicated than that. Your product becomes approx 20% more expensive to EU customers (the exact amount depends, of course, on the tax rate in the customer’s country). That will almost certainly lead to a drop in sales. Which ultimately is most likely also a drop in total profit, albeit not profit per sale.
For some years I chose option 1, but like you I now choose option 2. I don’t have clear data as to which results in higher net profit for me.
Since it’s their governments that passed this law, they should be happy to pay the tax!
Less sarcastically, EU buyers are used to (or should be used to) paying for VAT. Everytime I buy anything online, VAT is added separate (or a note is given, saying VAT has been added).
I think its a bit more complicated than that - depends on B2B and either B2 ‘normal’ C or B2 ‘sophisticated’ C.
B2B - not a problem, they are used to seeing net prices and in most cases can claim VAT back anyway.
B2 ‘sophisticated’ C (someone who buys a lot online and understands whats going on better) will be fine seeing final price suddenly jump up as VAT added. (though this is against EU law as I understand it as prices to consumers should be shown gross - never mind that its impossible to actually comply)
B2 ‘normal’ C - the prices they see day to day will be gross (VAT inclusive) and they probably dont ever think about whats going on with the tax. (The tin foil hats amongst us will realise that this is probably not an accident, why wouldn’t a govt try and hide what its actually taking out of your pocket?).
I’ve no answers - just pointing out that different types of consumers are likely to see things very very differently.
Gumroad now say they collect VAT. And they will include it in their commission:
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Just got that email too:
You’re probably aware that there have been some changes to the VAT regulations with respect to digital goods sold to EU customers.
Well, not to worry. Gumroad will collect VAT as required on your behalf and remit it to the EU. No forms to fill out, no options to toggle, nothing to change.
Your EU-based customers will see, and pay, the added VAT on their purchases. Additionally, at least for now, Gumroad will absorb the transaction costs associated with VAT to keep our 5% + 25 cent pricing structure simple.
While traversing the hoops and pitfalls of running a creative business, it’s nice every once in a while to find out that there’s something you don’t have to worry about. This has also inspired us to dig deeper into finances and payments. Stay tuned next week for that.
Does this change much? People more happy to stick with Gumroad rather than switching elsewhere?
Gumroad is really easy to use, and just works. A 2 week old baby could upload and start selling in 5 minutes. You have to give them credit, they did make the UX very smooth.
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Hey guys, Jessica from Gumroad here. Happy to answer any questions you have about our VAT support. We really hope it helps.
Wow, man. Take it easy.
She’s here to help (I assume that until she gives me proof to the contrary).
As long as her contributions add value to the discussion, she is very welcome (to me).
Update: Glad to see that you removed your post.
@jjalsey Jessica: Will you dynamically add the VAT% on top of the price as soon as the customer says “I’m European”? Is this even legal (I talked to Ryan about this back in october) as you (Gumroad) are not the seller and it’s the seller’s obligation?
How does this legally work out with the law saying you have to show gross pricing (i.e. including all taxes) to end customers in Germany? the dilemma here is that you don’t even KNOW someone is from Germany until they say so.
I assume you had legal advice on those topics, so I’d appreciate hearing what your lawyer had to say about that mess.
Also: Please say “Hi” to Ryan 
Cheers,
Christoph
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Hey Christoph,
Thanks for the question. If anyone else has questions, feel free to email me directly at jessica [at] gumroad.com.
To clarify, Gumroad views itself as the supplier for purposes of VAT, per the regulations. Accordingly, imposition of VAT is based on IP address, payment card information, and self-certification — again, all consistent with the regulations.
Hope this helps! And Ryan says “hi!”
@jjalsey - Thanks for taking part in this discussion - definitely interesting to get your point of view. However, I’m not sure you answered @itengelhardt’s questions. Specifically:
How does this legally work out with the law saying you have to show gross pricing (i.e. including all taxes) to end customers in Germany? the dilemma here is that you don’t even KNOW someone is from Germany until they say so.
Are you basing price on IP until they tell you otherwise? What do you do incase of a conflict - ask for a third piece of information?
Also:
Will you dynamically add the VAT% on top of the price
I think you might have answered this one implicitly - you do add the VAT to the product. Correct?
To clarify, Gumroad views itself as the supplier
So are other business supplying you? I don’t really understand how this works VAT-wise I’m afraid. Are you submitting the VAT returns for all sales through yourselves? Won’t that lead to double accounting if I have to also account for it in my own VAT return (or do I mark it as 0 rated or something else)?
Allan
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