Kiwi Juice: The Power of Community

Travis Nichols on July 17th, 2014

When Gumroad was founded, there was a conscious decision to not be a marketplace. We believe that direct-to-audience sales is superior to setting up in a packed bazaar and hoping for the best. Ten years ago, one could chuck something at the internet and it’d be found. Each page was like a much-desired service station in the middle of the southwest. Now the internet is an endless Times Square (shudder) and everyone is screaming to be heard.

It’s more important than ever to build an engaged audience and make it as easy as possible to get your work in front of them. Additionally, it’s easier than ever to put oneself in a position to generate income selling creative work; a double-edged sword since it’s not just easier than ever for you, but for everyone. That’s why we’re so interested in helping creators take advantage of and maximize the leverage they now have.

That doesn’t mean we’re all in it alone. There’s power in communities. A group of like-minded creators can band together and, in a unified front, help each other promote to a much larger audience and accomplish much more than any of the individuals on their own. That’s exactly what the founders of Kiwi Juice are doing for professional tutorials in the the concept, illustration, and 3D fields.

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We talked to Anthony Jones, who got things rolling on the commerce and gospel-spreading side of Kiwi Juice. Anthony has done work for Activision, Blizzard, Hasbro, Disney, and many more. He personally has almost 30 tutorials on Gumroad ranging from design to painting to Photoshop techniques, and Anthony is just one of dozens of professionals on Kiwi Juice. These videos, brushes, tool presets, and hi-res graphics are packaged and offered affordably to amateurs and pros alike. Their roster and numbers continue to grow, and for good reason. Check out a tutorial and see for yourself.

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Who built Kiwi Juice and why?

Gavriil Afanasyev Klimov built the site. He was working with other artists on the structure in which it should be run, but he put it all together himself.

What I did to contribute was start using Gumroad and convince others to use it too. So with our powers combined, we were able to let Kiwijuice.net become what it is now. A place where artists can build their own custom store and create affordable content for their fans and supporters.

Do you consider Kiwi Juice to be a community, a hub, a collective, a marketplace, something else, a combination?

It is all of the above. It is something that is run by the community of artists who put together their own individual stores, and it’s a collective for supporters to browse through and learn from the artists that they care about at an affordable price.

What is your curation process?

Kiwi Juice doesn’t take a commission, but we do review and take into account the quality of the work/instructor and try to ensure that those who we showcase on Kiwi Juice have good information to spread. And all of this is free.

Tell me about one or two of your favorite tutorials.

My personal favorites are definitely the ones done by John Park and Maciej Kuciara. These guys are good friends of mine, but also great instructors. I’d highly recommend both, especially since they created a great place on facebook for people to work together on improving one’s art. It’s called Brainstorm.

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-from Mech Rendering by John Park

Is there a lot of overlap between professionals and consumers for the types of work that you are curating tutorials for? Are things already happening fast enough that you have seen new artists become professional artists and teach others? 

Like most things, to become a professional takes time and effort. But what I have personally seen is an increase of ability and confidence amongst amateur artists. Also, the fact that there is a sense of light competition amongst the instructors gives us more fuel to create higher-quality content. The better the content, the better the response. I love this model of business, because it keeps everyone honest and hard working and accountable for great products for our fans and supporters.

What has surprised you most in this endeavor? 

The amount of positive feedback from the masses. So many people approve of this because of how artists who were radio silent have now become way more engaged and involved with their fanbases. It’s a win-win. But more importantly, it’s allowing some people to actually leave their day jobs and pursue this, making their own content and helping the community get better as a whole, full-time. It’s fantastic and inspiring for everyone.

What’s next?

I have always been an advocate for people to pursue their dreams and aspirations. I think the next step is to create a more fluid experience for users of Kiwi Juice.

Also, we have plans on putting together a miniature convention for people who have something to show and something to prove. It will be a place where people can meet their favorite artists and learn from them on the pros and cons on building your own content and things you should do to achieve this. I want people to start realizing that you can make money off your own hard work, and I want to help create strategies towards doing so.

I think it’s time to give more power to the content creators of your favorite movies/games/entertainment and really build a better economy for them. Artists tend to get unfair reimbursement and percentages by going through some third-party distributors. Gumroad/Kiwi Juice provides an opportunity for artists to sell their own content and keep practically all of the profit. And because of this we can sell it for much cheaper. Like I mentioned before, it’s a win-win. 


There’s strength in numbers, especially when a team is overflowing with amazing talent. Look around. You might be able to find what can become your community. Join up and work for the common good. We look forward to hearing about it.

 

Introducing the Best of Gumroad List: June 2014

Jessica Jalsevac on July 9th, 2014

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Here at Gumroad, we’re continually awed by the creators we see joining the platform each day. As part of an ongoing effort to showcase their work to the world, we’ve put together the first ever Best of Gumroad list. 

We looked for creators who had either a strong launch, a high number of purchases, or high gross revenue in the past month. From there, we hand-picked 10 whose products are especially innovative or exciting.

As the list came together, we noticed some interesting trends emerging: 

  • Niche Films: Two documentaries (Motonomad and I Am Road Comic) appear in the top 10, both aimed at very niche audiences (motorbike enthusiasts and comedy nerds). The filmmakers took very different approaches to distributing their films - Motonomad relied heavily on YouTube promotion of extended trailers, while I Am Road Comic used Twitter, comedy podcasts, and a few art house screenings. These different strategies reflect a clear understanding of their target audience, where they hang out online and offline, and what type of content is important to them.  
  • Art Tutorials: Artists Anthony Jones and Eytan Zana experienced a lot of success with the launch of Kiwi Juice, a new site devoted to the collection and listing of independent art tutorials (most of which are from Gumroad creators!). We love the concept of this community and hope to see a few more popping up organically in different verticals in the near future. Watch out for an in-depth piece on Kiwi Juice next week. 
  • Software/Tools: We’re seeing more software being sold on Gumroad recently, such as Pat Flynn’s Smart Podcast Player and ThinkDev’s Quickres 4.0. This is in part due to our new license key feature, but also seems to be part of an exciting trend where content creators are expanding their product offerings into the software realm (think Laura Roeder with the recent release of her app, Edgar). 

Without further ado, here are our 10 Best of Gumroad Creators for June 2014, in no particular order:

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Motonomad by motology Films (Film) 

Two motorcycle racers, Adam Riemann and Mark Portbury, endure a 7000km mission across Europe, in hope of reaching the Pyramids of Egypt.

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Color and Light by Eytan Zana (Tutorial)

A three hour long video takes you through Eytan’s thought process on applying color, light, and mood to a painting. Also includes a PSD file, brush set, and perspective tool plugin for Photoshop.

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Skift Trends Report: The Rise of the Silent Traveler by Skift (Report)

Skift is proposing a new model to look at the mobile-first travel consumer. The silent traveler is the travel consumer who turns to their mobile devices first, seeking a solution to in-trip challenges that used to be the primary domain of customer service staff.

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flex-i-ble dieting by Krissy Mae Cagney (Book)

Krissy Mae has compiled every iota of guidance she has on becoming a healthier and happier person into this book. 

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“Country Club Rejects” Polo by Shady Records (Tshirt)

Wreak havoc on your local golf course with the “Country Club Rejects” pack from Shady Records.

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I Am Road Comic by Jordan Brady (Film)

A first-hand look at working the road as a comedian. This funny documentary includes interviews with more than two dozen fantastic comics discussing the nuts and bolts of working the road in bars and clubs. 

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Smart Podcast Player by Pat Flynn (Software)

The best media player solution for podcasters who are tired of clunky, confusing players that are ugly and hard to install. Note: The beta launch of the Smart Podcast Player is sold out, but you can sign up to be notified of the public release here

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Paint with Color by Anthony Jones (Tutorials)

Anthony Jones started painting in 2007 when he was 23 years old. As someone who wasn’t initially a painter/artist he had to start from the beginning. He tries to spread as much good information to as many artists as possible, always trying to inspire people and let them know that even if you are a total newbie, you can still become a great artist. 

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Kyle’s Ultimate Dry Media for Photoshop by Kyle T Webster (Design Tools)

This great new set from illustrator Kyle T Webster contains 25 tools: 20 brand new Dry Media brushes with great effects, as well as the Bone Dry Brush and the Deliciously Dry Brush from the Drawing Set / Megapack, a new ‘rough’ eraser, and two new blenders for great smudging and edging effects.

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ng-book: The Complete Book on Angular JS and Complete Source by Ari Lerner (Book)

The most comprehensive guide to AngularJS available anywhere. Includes the book, all source code for every example in the book, 3 hour long Angular screencast for beginners, the sample app mini-ebook, and complete source code for the sample app.

That’s all for this month - we hope to see you on the next list!

What Does Authenticity Mean to You?

Travis Nichols on June 26th, 2014

The reality of our businesses is that we’re not dealing with numbers. We’re dealing with human beings.

- Leo Babauta

A few weeks ago, for our third Gumroad Creators Studio event, Leo Babauta gave a talk on building authentic businesses in an age of online noise. Leo is the author of Zen to Done and The Power of Less, and he writes to over one million subscribers at ZenHabits.net. One of the most refreshing things about Leo is that he writes as a person on a journey, not as a flawless sage on a mountaintop. The result is a body of work that is approachable and sincere.

You can also read a blogged version of the talk at zenhabits.net/trust.


What does authenticity mean to you? 

The days of being sleazy and ripping people off on the Internet are over. The only way you should be building an online business is the honest way: being yourself, charging what things are actually worth, and not being greedy or selfish.

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 - Caleb Wojcik, co-founder of Fizzle and author of DIY Video Guide.

If you want to build trust, take the first step and give someone something. Offer help to someone without expecting anything. If they can tell that you expect something, then it’s not a gift, but a deal.

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 - Ben Johnson, composer and pianist

The essence of underground publishing is to risk everything for the few. Selling publications that have virtually no audience and being satisfied with the results, no matter how meager, is the driven goal. I believe in publishing the strongest ideas, the greatest art, in the truest reproduction of the author/artist intention, and selling it to the public that needs it the most.

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- Ron Turner, Last Gasp Publishing


We’d love to hear from you. Let us know if you write a post on trust and authenticity on your blog. Here are some questions get you thinking.

  • What does authenticity mean to you?
  • Have you ever taken a great risk or passed on something that would have made you a quick buck to instead have more authentic business relationships? What happened?
  • What is something you do that is trust-building / what advice would you give on building up the trust of one’s audience?
  • What are the long-term effects of a business built on trust and authenticity?
  • Is there something you did when you started that you are now embarrassed about?

Is Pay What You Want Pricing for You?

Travis Nichols on February 5th, 2014

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It’s not just for ribbon dancers in the desert anymore. The Gift Economy is for writers, designers, lawyers, restauranteurs, consultants, artists, etc. etc. etc. Everyone seems to be getting on board, but is it for you? We talked to author and publisher Tom Morkes about his experience with Pay What You Want pricing. Tom wrote a definitive guide after interviewing hundreds of individuals and businesses on the unsettling-to-some business/pricing model.

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You surveyed hundreds of creators about PWYW pricing. The number one concern you found was that people are most afraid of not making enough money from their PWYW product or service to cover overhead and other basic expenses and that they believe customers will undervalue their work and pay very little or nothing. What has been your experience?

In my experience - and based on the research and analysis of dozens of other individuals and businesses that use Pay What You Want pricing – not only do the majority of people contribute when it’s optional, but they often contribute so generously that it’s quite common for PWYW pricing to bring in 60%-200% more revenue than fixed pricing. I know, sounds crazy, but it’s true. I started my blog Tommorkes.com a little over a year ago. For months, I wrote on the topics of creative entrepreneurship, unconventional business strategies, and starting, finishing and shipping creative projects. I also started a podcast and wrote several books and guides in and around these topics.

I did it all for free.

In April of 2012, I had a new book I was getting ready to release called 2 Days With Seth Godin.  I planned to give it away for free to my readers (all 166 of them) like I had done with all my other products up to this point, but I wanted something in return:

Validation.

I wanted to know if people actually care about the work I was doing. Of course, the only way to validate work is through an exchange of money (anyone will take a free sample – but how many people buy the $10 smoothie?). This put me at a crossroads – how could I validate my work without charging money?

That’s when I remembered an interview I had heard a month prior on the topic of Pay What You Want pricing. According to the interview, Anthony and Joe Vennare of TheHybridAthlete.com were selling fitness programs but with a catch: they let their customers choose their price. Interesting, but not necessarily remarkable, right? Until you find out they were making $400 - $600 per day using this technique. Think about that for a second. By giving their stuff away for free, while at the same time giving their loyal readers, followers, and customers the chance to contribute any amount they liked, they were making $146,000 - $219,000 per year.

Mind = blown.

That’s when it clicked for me: I didn’t have to charge to validate my book. Instead, I could give it away but with one subtle difference: I’d give my readers the opportunity to contribute back (as much or as little as they’d like). So I released the book as Pay What You Want, letting my readers know the book was free, but if they liked my work, they could buy me coffee (or maybe a nice steak dinner). In the first month, I made close to $500 from a free eBook (with a subscriber list of only 166 happy readers).

What’s more remarkable is that the average purchase price of the ebook (of the people who chose to contribute) was close to $15. If, at the time, you had asked me what I would have set the fixed-price of the book at, I would have said $3 - $5. In other words, I was making anywhere from 3 to 5x more by allowing my customers to choose their price than by setting a fixed price. *For proof, check out my Amazon Self-Publishing Experiment where I tested a fixed price version of the book through Amazon to see if a fixed price would bring in more or fewer sales (and more or less revenue).

Since releasing 2 Days With Seth Godin, I’ve experimented with Pay What You Want on a number of other ebooks and guides. My most recent PWYW book, The Complete Guide to Pay What You Want Pricing (meta, I know), brought in $963 in the first 10 days of release (including pre-orders).

More recently, my publishing company, Insurgent Publishing, just shipped the first issue of our brand new business and arts journal called The Creative Entrepreneur. The journal is a semi-annual, donation-based publication with a portion of all proceeds going to charity. Readers can contribute whatever they want over $1 / issue (with bonuses for those who contribute over a certain amount). We officially launched the journal on 1 January (although we did allow pre-orders). As of 8 January, we have 57 annual subscribers who have contributed $1,688 (and counting). 

Okay, so these are all digital publishing endeavors, what about physical products and services? No way Pay What You Want could work for that… Until you take a look at some of the success stories from people who have bought my guide and applied PWYW to their businesses:

Mick H. does part time consulting.  Normally he charges $200 / month. After reading the guide, he applied The 6 Step Perfect Pitch Framework to his consulting offer. He had a client immediately sign up for consulting at $500 / month. Mick more than doubled his revenue simply by letting his clients choose their price.

Or take Leah Hynes and Nazrin Murphie, founders of RYPL.net and The Circuit Breakers Series conference. They launched their first conference toward the end of 2013. At first, they sold tickets at the incredibly discounted rate of $49 (comparable conferences sell from $100 - $300 per ticket). In their own words:

“We had 3 weeks to organize it, promote it and fill the 64 person theatre. After two weeks of minimal movement on registrations we decided to use a Pay What You Want ticketing option. In 10 days we went from 3 registrations to 47. Over those 10 days we saw significant results: 

  • An 1466% increase in registrations from 3 to 47 registrations 
  • 22 Early Bird registrations (56% of tickets) 
  • 19 Pay What You Want registrations from $5 - $49 with an average ticket price of $20 paid (23% of tickets) 
  • 9 full price tickets sold (19% of tickets)” 

Not only did they sell a bunch of tickets using Pay What You Want, but by offering PWYW tickets, they increases sales of their full priced tickets as well.

While these two case studies demonstrate the power of Pay What You Want, there are literally hundreds of examples of successful PWYW offers, including:

  • Bridge Hotel’s Pay What You Want Karma Keg that brings in 10-25% more than their fixed-price kegs
  • Linda Formichelli’s Pay What You Want eCourse experiment that brought in 10 times more than her fixed price eCourse (and is now a permanent option on her site)
  • Larian Studios PWYW video game compilation experiment that backfiredand brought in more money than they ever expected
  • Panera Bread’s group of Panera Cares Cafe’s that are entirely Pay What You Want based
  • Humble Bundle that raises millions for charity and for video game publishers through their PWYW video game bundles
  • Joost van Dongen’s hobby project Proun that brought in over $20,000 using Pay What You Want pricing
  • Chris Bennet’s Dock Cafe in Belfast that’s run entirely on an honesty-box system
  • Libboo, Zoho, Propellerhead and BinaryNowall software companies that have used Pay What You Want to sell their products
  • Perlin Winery in Germany that’s run entirely on PWYW… for the past 10 years
  • Little Bay restaurant in London that’s made 20% more revenue using Pay What You Want than their fixed price menu
  • And many, many more…

This is the power of Pay What You Want. Instead of customers undervaluing your work, they are much more likely to contribute generously. And in the process, it’s not uncommon to more than double your revenue.

Well, this could be a one-question interview. But let’s go further. We did a post a few months ago on psychological pricing that focused on prices ending in 99 cents. A major part of giving a product a price ending in 99 cents is the implied value. PWYW almost flips that on its head. Do you think people more often feel like they’re paying too little when they’re purchasing a PWYW product and then increase their contribution?

There is a lot of truth to this, and it’s definitely one of the powerful, underlying psychological principles involved in Pay What You WantWalt Kania is a freelance writer and consultant who has used PWYW extensively for his work (and has extensive documentation to show it’s helped him make more than double his fixed price consulting and freelance rate), and this is what he’s witnessed when it comes to offering services as Pay What You Want:

“Sometimes (as one client confessed to me) they’ll reflexively crank up the fee when filling in the blank. Sort of like the way we reflexively and fearfully crank down the price when the client says ‘How much will it cost?”

Source: The Scariest Pricing Idea Ever. That Works.

But there’s more to Pay What You Want than making people rethink what they contribute for fear of looking cheap. Pay What You Want actually inspires generosity. This Harvard Business Review headline says it best:

When The Rule is: Pay What You Want, Almost Everyone Pays Something.

The article goes onto explain: 

“During two years of observation, only 0.5% of patrons took advantage of the opportunity to eat free at the pay-what-you-want Wiener Deewan self-service Pakistani restaurant in Vienna, say Gerhard Riener, of the University of Jena, and Christian Traxler, of the University of Marburg, both in Germany. By the end of that period, payments for meals had stabilized at an average of €5—more than enough to cover costs—and the number of daily customers had increased by more than 50%.”

In my own experience, I’ve had several people contribute $50 - $100 for one of my ebooks (and these outliers more than make up for those who contribute little or nothing).  

I’ve also had other people come back and contribute more after they used one of my guides and got results. But the best aspect of Pay What You Want is that it’s helped me develop a relationship with my readers (which, in turn, has helped me buil trust and brand). Oh, and I never have to hard sell anything either – which is priceless. 

There’s a lot of anger/hesitation/backlash, mostly in the design/illustration world, about working for “exposure”. While increased exposure is a major benefit to PWYW pricing, do you think there’s a point where one should decide that the cost of entry should be raised? That exposure isn’t as much of a factor as, say, getting a 60-foot yacht instead of a 48-foot yacht? 

I don’t think this has to be a mutually exclusive trade-off. Why not maximize exposure while maximizing your revenue? I listed dozens of examples above that shows PWYW being used to generate upwards of 200% more than fixed-price alternatives. Exposure is great – but getting paid is essential for any entrepreneur, artist or writer…which is why Pay What You Want can be so effective – it does both simultaneously if you do it right.

So how do you do it right?  It’s all about the pitch. I go into a lot more detail in my guide, but I’ll do a basic overview of The 6 Step Perfect Pitch Framework, which should be enough to get most people started on the right track to offering a PWYW product or service that actually makes money:

1. Clarify the Offer
Simple, but essential. If people don’t know what you’re offering, how can you expect them to contribute (let alone contribute generously).

2. Show the Customer You’re Human
We don’t give to corporations. We give to people. If McDonalds rolled out a Pay What You Want Big Mac, why would anyone contribute generously? But if the artisan baker down the street, who you’ve known personally for years, is offering his hand-crafted baked goods as Pay What You Want, now all of a sudden there’s a reason to contribute (and generously). A couple ways to show people you’re human online: add your picture to the website and sales page, and write in a casual but passionate voice (in other words: write like you talk).

3. Appeal to Idealism
PWYW is all about giving people a reason to contribute generously. We do this by appealing to virtue, generosity, karma, and any other ideal that encourages giving. Sometimes, just mentioning the word is good enough (think Karma Keg). Other times, we need to elaborate on what and why we’re using PWYW. Remember: people buy stories.  So give them a good story that appeals to their idealism (they’ll be more willing to contribute and to spread the word).

4. Anchor the Price
If you’re selling a premium product as PWYW, you need to anchor a premium price in the buyers mind. This could be as simple as referencing comparable products or services that are extremely expensive, or offering multiple versions of your own product (and giving away bonuses for people who contribute over certain amounts).

5. Steer the Customer to the Right Choice
Once you’ve price anchored the product, you need to actually steer the customer to the right choice. PWYW is ambiguous in some ways, and ambiguity scares people.  We need to be clear not only with our offer (see above), but with what an average contribution would look like, and, even better, what a generous contribution would look like. HumbleBundle.com does an incredible job of this by (1) showing you the average people contribute and (2) pre-setting the amount you should contribute at the bottom of the sales page.

6. Add Charity to the Mix 
While it’s true that a simple PWYW offer can increase revenue compared to fixed-pricing, it’s much more effective when you add charity to the mix. This ties into the ‘appeal to idealism’ I mentioned earlier but creates an even greater incentive to give and to give generously. Of course, you need to integrate charity authentically, honestly, and congruently with your message, otherwise it comes off shady or forced and people won’t contribute. No, you can’t ‘game’ the system with charity, so only use it if it fits.

As your audience increases, has your contribution amount per customer average increased/decreased/maintained?

It depends on the product. If we look at just one product, like my book 2 Days With Seth Godin, the average contribution price of those who contribute something ($.01 or more) has fallen to $9.75 (during its first month of release the average was $14.51). But the average contribution for The Complete Guide to Pay What You Want Pricing has increased from $10.37 to $11.78. Of course, there are ways to keep contributions fairly consistent, and one of the best practices I’ve seen for this is offering bonuses or incentives for contributing at or above a certain price point (which is what I do for The Complete Guide to Pay What You Want Pricing, which keeps the average contribution steady).

What has been your biggest surprise about PWYW pricing?

That it works. And that it works consistently.

I didn’t expect to have much if any success with PWYW when I started.  I just wanted to try it out and maybe make enough for a cup of coffee in the process.

Since the release of my first Pay What You Want product, I’ve steadily improved and perfected my pitch, and found ways to make my PWYW offer irresistible, to the point where I’m confident I’ll make money from my Pay What You Want products and services. All in all, I’ve made thousands from giving away my products and letting my customers choose their price. And I’m not alone.

I think the best advice I could give to any creator (especially if you have a small but passionate audience like I did when I started) is to at least experiment with Pay What You Want. Who knows, you may never go back to fixed pricing.

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Tom Morkes is an author, publisher and all around instigator.  Tom graduated from The United States Military Academy at West Point, spent 5 years as a commissioned officer in the U.S. Army, and even got paid to jump out of helicopters for a while.

If you want to get inside his brain, check out his blog at www.tommorkes.com/gumroad, where he applies what he’s learned leading troops in combat to starting, finishing and shipping creative projects.

Nathan Barry’s Lessons Learned Selling $355,759 on Gumroad

Travis Nichols on January 15th, 2014

Nathan Barry is a designer, writer, and teacher. He’s the author of The App Design Handbook, Designing Web Applications, and Authority. He’s the founder and designer of ConvertKit, and he was an early seller on Gumroad. Two of the most redeeming (and valuable) qualities about Nathan are his transparency and his desire to teach others. Here’s how much I made doing ___. Here’s how I did it. Here are some things you can do.

Nathan recently spent a few days at Gumroad HQ, and he dispensed an amazing amount of insight and experience. We’ll be releasing it over the next few months like the controlling board of a precious metal monopoly. The best way to stay apprised of these types of updates is to sign up for our weekly newsletter. We’re bringing you all sorts of tips and tricks to build your audience and sell smarter. Sign up through the links on this page.

Here’s Nathan Barry.

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A little over a year ago, while trying to find a platform to sell my new design book on, I got an email from Ryan Delk. In his well-crafted pitch to get me to consider using Gumroad he ended with, “and the UX is exponentially better than other marketplaces.”

As a user experience designer I had to check It out. Marketplaces and payment providers are famous for having a terrible checkout experience. PayPal tries to trick your customers into thinking they can’t pay with a credit card and e-Junkie looks like the experience hasn’t been improved in a decade.

After using the checkout process for the first time my professional opinion was, “wow!” The “exponentially better” part of Ryan’s comment was an understatement. Gumroad’s checkout process was—and as far as I know, still is—the best checkout experience anywhere on the web. Since my book was about designing great software it would be hypocritical of me to use a payment with a second-rate checkout process.

Anyway, that’s the story of how I came to Gumroad. In the 16 months since that initial conversation with Ryan, I’ve sold $355,759 worth of books on Gumroad. In the process I’ve learned a few tips that I’m certain can double your revenue—no matter what type of product you are selling—if implemented correctly.

Lesson 1: Be able to contact your customers

Before writing books I made all my product revenue from selling iPhone apps on the App Store. Each day I would look at the previous days sales numbers. Unfortunately that’s all they were: numbers. I would be informed “You sold x copies of this app in these countries.” That’s it.

Without customer information I had no way of contacting any of my users. That meant notification about updates, asking for feedback, and any other contact had to be done through custom code through the app—something I hadn’t taken the time to build.

That’s when it really hit me: the people who bought my app weren’t my customers, they were Apple’s. Apple was just giving me a little bit of money from each purchase, but not the customer.

I often get asked why I, as a full-time author, don’t sell my books on Amazon or the iBooks store. The biggest reason is the lack of customer information. I want to sell directly to my customers so that I can email them to ask how they like it, know who is buying it and where, and be able to build on that relationship to make my next book launch more successful than the last.

Through Gumroad I get all the information on my customers—I can teach them through other emails and promote future products to them. Without that, I don’t think I could have built a business to the same level that I’ve been able to.

Lesson 2: Price based on value

How much is a book worth? The most common way to answer that question is by comparison. Print books often retail for $20, but Amazon will sell a copy discounted down to $14. Mine are just digital, so we should probably knock at least $6 or $7 off just because ebooks aren’t worth as much.

So is your newly published ebook worth $7? Well, those ebooks at that price are by professional authors from major publishing houses. You’re just a first time author who hired your mom to proofread your book (luckily, my mom is actually a professional proofreader). So your book should be priced at just $3 or $4.

But remember those stories of authors hitting it rich on Amazon by selling their books for $0.99 or $1.99? You want to sell tens of thousands of copies, so is that the right price?

Stop.

Seriously, stop thinking this way.

Whether you are selling books or any other product, comparison pricing like this is a great way to be a poor starving author/artist/creator/etc. Don’t do it.

What’s the value?

A designer or developer at a software company who buys my book Designing Web Applications can get thousands of dollars of value out the ideas in the book. Just implementing the ideas on designing first-run experiences could radically improve their trial retention rates and generate a lot more revenue. So is that self-published book worth $2? No, it’s worth hundreds. Maybe not to everyone, since people working on small projects without many users wouldn’t get the same value out of each improvement, but it’s okay to price some people out of the market.

A Photoshop plugin that saves a designer 10 minutes every work day isn’t worth just $15. If it’s core to workflow, you could easily charge $50. After all, good designers charge over $100 per hour for their time, so a good $50 plugin would pay for itself in a couple days of saved effort.

If your product is focused on business customers you can—and should—charge far more than you think. Since my business is teaching and training I like to think of it like this:

You can charge premium rates if you are teaching a skill that makes money to people who have money.

I teach design to professional designers and developers. They use those skills to make their companies easier to use and more profitable.

Whereas if you were to teach knitting to middle-school kids, they not only don’t use the skills to make a living, but also don’t have money to spend on your product.

Value based pricing doesn’t work as well when focused on consumers (they tend not to not think about purchases based on a return on investment), but you should still probably increase your price to focus on the higher end of the market.

A small audience

I’m going to make an assumption that you don’t have a massive audience (10,000+ fans) that is eager to buy everything you produce. More likely you are in the early stages of your online business empire and are working on those first 500 or even 100 followers. The percentage of any following that will actually buy is quite low—so you need to maximize revenue from each one.

If only 10% of your audience will actually buy from you, I doubt lowering the price by a couple dollars will encourage significantly more people to purchase. Conversely, in most cases doubling your price won’t cause you to lose 50% of your sales—meaning you come out ahead on revenue.

Pricing is something that is flexible and hard to get right. Experiment with it. But if your goal is to maximize revenue think about increasing your prices.

Lesson 3: Build a relationship through email

When I first started writing this lesson I wrote it as “Build an email list.” But that’s actually not what I want you to do at all. Instead each seller should be able to build a relationship with their customers over time, and email is the best platform I know of to do that.

The first step is to know how you are going to deliver value on a regular basis. In most cases, teaching is the best way to do this. For my books I teach design and marketing through blog posts, but just about every product has skills related to it that the owner will want to know. People love to learn, especially from a source they know and trust.

Let’s go with the Photoshop plugin example again. What does someone who is a good customer for a Photoshop plugin want to know? Well, how to use Photoshop for design of course!

So on your email list you are going to regularly (every week or every other week) share tutorials and resources to help designers. Once you have a basic strategy in place you need a way to stay contact your purchasers.

Choose an email marketing provider such as MailChimp, Aweber, or my own ConvertKit (best for quickly building an audience), then export any existing customers from Gumroad and import the list into your tool of choice.

If you don’t already have customers then you are in the pre-launch stage—and email works great for that too.

Using email to launch a new product

The first step when launching a new product is to put up a landing page with basic details about the product and an email opt-in form so that visitors can find out more information. After promoting that page like crazy (email friends, submit to link sites, share on Twitter, ask friends to share on Twitter, etc) you should have a handful of subscribers.

The next step is to write really detailed blog posts or tutorials teaching that content we already established your target customer wants to learn. I’m not talking about short list posts or fluff pieces—these should be detailed posts that deliver a lot of value and are worth sharing. 1,000 words is the minimum, but my best posts are usually 2,000-4,000 words.

At the end of each post should be an email opt-in form for your new product. The goal is to convert as many people as possible to get on your list. That’s where you will get a much higher conversion rate.

By promoting the landing page and more blog posts you will grow your list, but remember, we want a relationship. That means providing value on a regular basis.

So, take that blog post you just wrote and send it to your email list. They expressed interest in your product and your content is good, so why wouldn’t they love it? The best part is you can ask everyone on your email list to share it, then your list will grow even more.

Repeat that process several times. Write a new post, send it to your email list, use the post to grow your list, then start writing the next post.

When working on my first book, three really detailed tutorials—plus a lot of promotion—was enough to build an email list of nearly 800 subscribers. Enough to make $12,500 in sales on the first day.

Though the best part about email isn’t that first launch, it’s how your list makes your next launch so much easier.

Lesson 4: Sell in multiple packages

What if I told you one simple method could triple your revenue—would you pay attention?

I’ve used this method to triple revenue on two book launches and more than double revenue on two more. It does take some time to implement, but not nearly as much as creating the rest of your product.

What is it?

Selling in multiple packages.

You know when you go to subscribe to a web application and it asks which plan you would like? That’s tiered pricing—or multiple packages. They are segmenting their customers to allow those with larger budgets to pay more and get more value from the product. It’s common in software, but you can apply it to any other kind of product as well.

I do it with books. I sell just the book for $39 (that’s me pricing based on value), then for $99 I include video tutorials, expert interviews, and some other resources. Finally at $249 I include a top package that has even more resources (Photoshop files, code samples, and anything else that will save the customer time) as well as double the interviews and video tutorials.

I already spoiled the surprise by saying this method doubles or triples revenue over offering just the book at $39, but let’s look at exactly how.

For my book Authority (which is on exactly how to write and profit from your own technical ebook), I used the package method mentioned above. When looking at the sales count (number of copies sold) this was the distribution between packages:

  • The Book ($39) — 48%

  • The Book + Videos ($99) — 26%

  • The Complete Package ($249) — 26%

So just the book by itself sold nearly 50% of the copies. So was it worth doing the other packages? Definitely! Here’s the breakdown when we focus on revenue:

  • The Book ($39) — 16%

  • The Book + Videos ($99) — 24%

  • The Complete Package ($249) — 60%

Despite making up nearly 50% of revenue, the book only accounted for 16% of revenue. The real revenue came from the 24% of sales in The Complete Package that made up 60% of revenue!

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Without excluding anyone

Raising prices almost always increases revenue. So why don’t we just keep raising prices to ridiculous amounts? Because each time you raise the price you exclude some people from buying. For some products that’s good: low paying customers have higher support costs in general. So in that case getting more revenue from fewer, higher quality customers is a good thing.

But with my books and training I want them to still be accessible. While businesses have plenty of money to spend, I don’t want to price freelancers out of getting my training.

That’s the beauty of tiered pricing. You can get all the benefits of selling a high priced product (the top package) to customers who have money (real businesses), but people just getting started can still afford a version of your product (the lowest package). Something for everyone—and you maximize revenue from the entire market!

One more thing

A really important, but very in-depth, topic I didn’t get a chance to cover is product launches.

I’ve launched a book to an email list of 800 and sold $12,500 in the first 24 hours, and I’ve also launched a design workshop to an email list of over 5,000 and sold zero seats. For the book I got the launch sequence right, and for the workshop I got lazy and screwed up the launch.

A good launch takes time to go through, so I’ve written a free, ten email course called Mastering Product Launches. It starts with topics like how to gather subscribers and build interest and finishes with using urgency to drive even more sales.

Sign up for Mastering Product Launches.

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We love hearing from you and getting your feedback. Let us know what you think here.

A Penny Saved: Psychological Pricing

Travis Nichols on October 18th, 2013

Please note: This post is for sellers only. If you’re not a seller, please close this tab and go about your daily purchasing.

Waiting.

Okay, great. Now that it’s just the sellers, here’s some information about a pricing strategy you might consider trying out if you’re aren’t already.

But first, look at the image below and count back from 10. Go ahead.

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9.99… Look deeply at the price… 8.99… You’re feeling veeeery frugal… 7.99… You’re getting your credit card… 6.99… You’re a savvy consumer… 5.99… Oh, the savings… 4.99… Spend… Consume… Buy…

Yes. The magic of the 9. You see it everywhere. On TV, in the grocery store, in car lots. Prices ending in dollar values of 9 and/or cent values of 99 are everywhere. And we’re smart people. We know that $19.99 is essentially $20, but even knowing that doesn’t stop us from, well, not knowing that.

In languages that read words left to right (and, interestingly, in many languages that read right to left), we read and process numbers, naturally, from left to right. And apparently there’s a decay as we travel along. According to several studies, as we’re reading prices, we either round down after the whole numbers in our minds or essentially forget what comes after the beginnings of prices. Additionally, other research suggests that when we see a price ending in 9 or .99, we believe the seller has priced the item at the lowest point possible and that we’re getting a great deal. What suckers we are.

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At Gumroad, we’ll stop just shy of letting you charge tenths of cents (come on, gas stations, that’s cheating) or allowing the font on your change to be smaller on-screen. But is there anything to this stuff in the e-marketplace? Let’s see.

The following chart compares the conversion rates (the number of people who viewed products over the number of people who bought them) of every item available on Gumroad in whole dollar prices with every item available on Gumroad with prices at one cent less.

Across the board, prices ending in .99 have higher conversion rates than prices ending in one cent higher, and in one case, the conversion rate is twice as high. Does that mean that you should rush to change all of your prices? Well, hold on. Something to consider is the Fancy Factor. This completely made-up term refers to the psychological pricing system used by many high-end restaurants and retailers. You’ll find that these places will go the other way by using whole numbers (and often only even numbers) to bolster an atmosphere of elegance and high value. So put that in your tiny teacup and mull it over. What are you selling? Store-brand mac & cheese or geoduck clam with crême fraîche and a lily bulb? Likely it’s something somewhere between the two.

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We’ll dig more into psychological pricing in later posts. In the meantime… okay, buyers! You can come back now.

We’d love to hear from you with any feedback or questions.

The Girl Talk Shop: Powering Album Sales with Gumroad

Emmiliese von Clemm on August 20th, 2013

Greg Gillis, better known as Girl Talk, has long been considered an innovator in his field. Through pushing the boundaries of music sampling, he has both inspired controversy and established a large and loyal fan base. In addition to being at the forefront of his genre musically, Girl Talk is known for introducing unconventional strategies to reach his fans, such as making his albums available to download for free online. 

Last year, Girl Talk’s label, Illegal Art, began using Gumroad to power all of their artists’ album sales. Today on the blog, we’ll take a closer look at Girl Talk’s album sales strategy and highlight some lessons to be drawn from eight months of sales data.

Powering Online Sales

Today, all music sales through the Girl Talk Shop are powered by Gumroad. The Illegal Art team uses the Gumroad Overlay to enable all purchases to occur in lightboxes right on Girl Talk’s site, meaning fans can purchase and download the albums without leaving the page. This purchasing experience also emphasizes Girl Talk and his content, rather than the underlying platform powering the transaction.  

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Besides All Day, an album available for free download only, Girl Talk has four albums for sale on the Girl Talk Shop. Each of these albums is available in differently priced formats, including MP3, FLAC, CD, and, Vinyl Record.

imageEach product page is specific to the type of content being sold. Files (MP3, Seamless MP3 and FLAC) include an audio preview from the album as a product cover, whereas CDs and Vinly Records use photos of the items. For the physical albums, buyers are asked to provide shipping details whereas digital albums only require e-mail address and credit card details.

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Gumroad hosts the MP3 and FLAC files for each of Girl Talk’s albums and delivers these files automatically after purchase. Using a .CSV (from the seller analytics dashboard) of purchase data, Illegal Art fulfills CD and Vinyl Record orders.

Flexible Pricing

All of Girl Talk’s albums are priced using Pay-What-You-Want pricing. Standard MP3s cost $0+, meaning listeners can choose to download the MP3 version of each album for free, or to pay more if they want to support Girl Talk. Seamless MP3s and FLACs are priced at $5+, CDs at $10+ and Vinyl Records at $15+ or $20+, depending on the album.

Through flexible pricing, Girl Talk can offer his music for free, while giving listeners the opportunity to pay more if they want a premium format or believe the music is worth more.

While this Pay-What-You-Want pricing strategy may seem risky, it’s one that is being increasingly experimented with for different goods and services, from food to yoga. And as you might expect, data from Girl Talk’s album downloads and sales indicates that a large number of fans are choosing to pay for Girl Talk’s music, even though doing so isn’t a requirement.

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While the success of a flexible pricing strategy will vary depending on the content being sold, the minimum price point chosen, and the size of an artist’s audience, the response to Girl Talks’ albums indicate that many fans are willing to pay significantly more than the minimum price, based on the content’s perceived value and their desire to support the artist.

Traffic Over Time

Daily product page views are tracked, broken down, and presented in Gumroad’s seller analytics dashboard, making measuring (and responding to!) traffic from different sources very simple.

Since launching the Gumroad-powered shop, the Illegal Art label has gone on an indefinite hiatus, during which Girl Talk hasn’t released a new album or launched any album promotions.

As a result, 92.3% of all traffic to the album product pages came from Girl Talk’s website. This percentage is much lower for artists with active labels who put a lot of effort into promoting new albums through Twitter, Facebook, and other traffic sources.

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While the overall traffic to the Girl Talk Shop appears to have increased since November, the Illegal Art team believes this is mainly the result of changes in the site, rather than an overall increase in views. As the team has linked more and more of their site to Gumroad, traffic has moved from their old webshop to the newer Gumroad product pages.

It’s also possible that hype around increasing Girl Talk activity in March and April of 2013 led to some degree of additional traffic. Shows announced and played at SXSW in Austin and UPenn in Philadelphia could have led to a jump in listeners.

This could potentially explain why, from February to March, views of $0+ MP3s increased by 50%, whereas views for more expensive album formats increased by only 26%. The shows could have led to increased traffic from new listeners more interested in $0+ downloads, as opposed to loyal fans likely to choose more expensive album formats.

Whether or not there was any real increase in overall views (across the old and new webshops), it is apparent that traffic has, at the very least, not decreased significantly. Impressively, without dedicated efforts to build hype, Girl Talk maintains persistent stream of fans interested in his music.

Of course, this traffic comes after years of Girl Talk building a name for himself through boundary pushing, live shows, and high quality album releases — after all, Girl Talk’s first album, Secret Diary, was released more than 10 years ago. The Girl Talk brand, combined with the easy accessibility of his music, results in a flow of both new listeners, who choose to try out an album with a $0+ download, and more loyal fans, who opt for premium album formats.

Conversion Rates

While the number of views is a useful indicator of interest in Girl Talk’s music, conversion rates are often a more valuable metric for creators because they ultimately drive sales and bottom line revenue. Artists care about having an engaged audience—one that will go through the effort of downloading or purchasing a song—rather than just a large audience.

At Gumroad, we measure conversion rates as the percentage of product page views that result in a purchase (or download, in the case of content priced at $0). Conversion rates are also particularly important to us — since we’re working to make the buying experience as frictionless as possible, increasing conversion rates is one indication that we are building a good product.

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Looking at Girl Talk’s conversion rates over time, you’ll see a steady upward trend.

Unsurprisingly, the average conversion rate is much higher for MP3s priced at $0+ because it is possible to download an album in this format without having to think about whether it is worth the money (and without having a credit card handy).

The slopes of the trend lines indicate that, over time, the average conversion rate has increased more quickly for more expensive album formats. This is promising for Girl Talk because it means a higher percentage of the people who visit the Girl Talk Shop purchase an album today than did eight months ago.

This increase is also encouraging for Gumroad because it suggests that we are making valuable improvements to our product — ones that help all our sellers in the long run. As the Gumroad buying experience becomes better—more familiar, more secure in appearance, more intuitive— we expect conversion rates to increase further.  

Things to Keep in Mind

  • You can power an entire store of both physical and digital products with Gumroad — Just set up each product page to collect different details from customers, depending on whether you need shipping information, tshirt sizes, or other buyer info.

  • Reach fans with different engagement levels and target price points by offering various options — You can do this by bundling in additional content to create premium packages or by offering a number of different content formats, like Girl Talk does with each of his albums.

  • Pay-What-You-Want pricing can be a valuable strategy to experiment with or apply longer term — Doing so can give you insight into how much your audience values your content, thereby informing pricing decisions in the future. Plus, customers who download your content for free are still valuable. They may spread the word about your content or pay for other things you’re selling (like shows, in the case of Girl Talk), or turn into paying customers later on.
  • People are willing to pay for high quality content, even when given the option not to — This is particularly true for creators who have built up large and committed audiences over time.
  • Pay attention to conversion rates — Compelling products and frictionless buyer experiences result in higher conversion rates.

From Crowdfunding to Gumroad

Emmiliese von Clemm on August 14th, 2013

Thinking about turning a crowdfunding project into a product you can sell directly to your audience? We’ve put together a number of examples to step you through the process. 

Crowdfunding To Gumroad

As Gumroad grows, we’ve seen an increasing number of sellers using our platform to power sales after a successful crowdfunding campaign. Crowdfunding platforms are great for creators looking to get resources for their creative endeavors, while still maintain complete ownership and responsibility over their projects — Gumroad allows these creators to maintain this control once these projects become products and bring them to market.

Throughout and following crowdfunding campaigns, creators often develop lasting and meaningful relationships with their backers, individuals who are interested in not just the final product, but in the creative process as well. Gumroad is a fitting next step because it allows creators to continue this relationship, and build new relationships, by selling directly to their audience.

To Be Or Not To Be: That Is The Adventure

Ryan North, the author of the famed Dinosaur Comics and creator of one of the most successfully funded publishing projects in Kickstarter history, launched fulfillment of digital rewards using Gumroad on Monday.

Ryan’s book, To Be Or Not To Be: That Is The Adventure, an illustrated, chooseable-path book version of Shakespeare’s Hamlet, raised over $580K – a full 2,904% of the initial fundraising goal.

With more than 15K individual backers, Ryan had a lot of backers eagerly looking forward to the E-Book version of his work, plus a bunch of other awesome digital rewards.

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We teamed up with Ryan to deliver digital rewards to his backers in a straightforward and secure way.

First, Ryan put together two reward pack bundles, pricing each at $1000 to ensure non backers wouldn’t purchase the bundle. Next, we generated unique, single-use $1000-off discount codes for each of Ryan’s backers. Finally, Ryan emailed a link to the appropriate reward pack and an offer code to each individual backer.

Since Monday, backers have been able to immediately download the appropriate reward bundle for free by accessing the product page and entering their offer code.

Because each offer code expires after a single use, Ryan doesn’t have to worry about backers downloading multiple copies of the bundle, or otherwise misusing offer codes. 

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Luckily, for those of us who missed out on Ryan’s Kickstarter campaign, To Be Or Not To Be: That Is The Adventure, is available for purchase on Gumroad. 

You can get an instant download of the book here15K+ backers can’t be wrong— after all, when’s the last time you got to have a say in the fate of the characters in a story that’s been around for over 400 years? 

For more on Ryan, his book, and the creative process, visit hamletbook.com

Gumroad Guides

To help creators coming off of crowdfunding platforms like Kickstarter and Indiegogo, we’ve put together a Crowdfunding to Gumroad Guide. It’s full of tips and tricks from creators who’ve successfully gone from a crowdfunding campaign to sales of a finished product. 

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In the guide, you’ll find practical information and examples for how to make the most of your crowdfunding campaign as you transition into sales of the finished product. We’ve included advice on everything from using your crowdfunding campaign to test pricing to using Gumroad to fulfill digital backer rewards.

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We’ll continue adding lessons and concrete examples as creators continue sharing what they’ve learned throughout the process.

A Total Disruption and Subway Sets

Beyond the Gumroad Guide, taking a look at other successful Kickstarter projects can be a great source of inspiration and lessons for what works well when making the jump from project to product.  

In addition to Ryan North, we’ve worked directly with a number of other exciting Kickstarter projects recently, all of which are definitely worth taking a look at. 

Two-time Sundance Grand-Jury Prize winner Ondi Timoner ran a Kickstarter campaign this spring in order to launch A Total Disruption, a web portal full of interviews with hundreds of captivating innovators and entrepreneurs.

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We helped the A Total Disription team deliver backer rewards using a set of offer codes redeemable for digital downloads of Ondi’s films and other products. 

Now, the A Total Disruption Store is powered entirely by Gumroad. Check it out for downloads of Ondi’s award winning films (DIG! and We Live in Public), merchandise, and memberships to the web portal.   

Last weekend, Gumroad sponsored Subway Sets, a performance bringing musicians from NYC’s underground up to rooftops above the city. After running a successful Kickstarter campaign and doing a second round of ticket sales, Subway Sets hosted a live show in the Brooklyn Navy Yard last Saturday, featuring four talented artists. 

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We helped make Subway Sets a reality because we thought it would be a unique opportunity for creators, musicians, and backers to get together and celebrate creativity. Soon, Gumroad will be powering distribution of a live recording and video from the event. 

Dig it as much as we do? You’re in luck, because Subway Sets aims to be an ongoing series. You can follow them on Twitter to find out the when and where for the next event.

Let Gumroad Know

In the middle of crowdfunding or completed a successful campaign? We would love to hear about your plans for going from project to product. 

As always, please reach out if you have feedback on this post or ideas for how we can better help creators coming off of crowdfunding campaigns. 

Maximizing Conversion Using Gumroad

Sahil Lavingia on November 7th, 2012

Most of our native elements have been designed with our sellers in mind. It follows that sellers who make the most of these elements have the most success in selling their products. Here are some data-driven insights that we hope will help you sell on Gumroad:

Buyers want to know about you. Sellers that provide more information to their buyers about themselves have higher rates of conversion. Having a seller bio increases conversion by 54%! The length of the seller bio also makes a difference – the shorter the bio, the better. Conversion for bios less than 30 characters is 62% higher than bios more than 30 characters.

Buyers want to know about the product they are buying. Being descriptive helps. Long descriptions convert better than short ones (products with descriptions over 60 words have 103% better conversion than products with descriptions of less than 30 words).

Innovate with pricing. Pricing your product at the optimal price is hard, and we provide a number of options to help you make the most from selling your products. One of our favorite options is flexible pricing which allows buyers to pay what they want above a certain threshold. For flexible pricing purchases on paid products, 55% of buyers choose to pay more than the minimum threshold with average price of purchases exceeding the minimum threshold by 35%!

Social integration works. Gumroad provides easy seller sharing options for Twitter and Facebook and in the past months we have seen that sellers who utilize this feature to distribute content directly to their friends, family and followers really reap the benefits. Sellers who authenticate with Twitter and Facebook see a 32% and 35% increase in paid conversion respectively!

We hope this insights help you in building your products on Gumroad. Watch this space in the coming weeks for posts on social sharing and pricing and let us know if you have any questions (support@gumroad.com).

Data Driven Selling

Sahil Lavingia on November 7th, 2012

Here at Gumroad, we want you to be as successful as possible in distributing your content. Over the next few weeks, we’ll be releasing a series of blog posts showcasing some interesting stats on:

  • Using the native Gumroad elements to increase conversion;
  • Pricing your products; and
  • Leveraging social networks to maximize the reach of your products.

Watch this space for those posts and as always let us know if you have any questions (support@gumroad.com).