How to Sell Digital Products: Platform Fees, Taxes and a Launch Checklist
A digital product is a file or online access you sell many times: a printable planner, a Canva or Notion template, a spreadsheet, a set of Lightroom presets, an ebook, an SVG cut file, a course. To sell one you need three things: the product, a place that takes payment and delivers the file, and a way for buyers to find it. This guide covers the second part in detail, because that is where the numbers are: what each platform charges, what you keep from a sale, and what you owe in tax.
The Short Answer
- Marketplace or your own store. Etsy and Gumroad's Discover marketplace can send you buyers but charge more. Shopify, Payhip, Ko-fi, Stan and course platforms only process the sale: you bring the traffic.
- On a hypothetical $15 download you keep about $13.12 on Etsy, $12.26 on Gumroad (direct link), $13.51 on Payhip's free plan and $14.26 on Shopify, before any monthly plan fee.
- Monthly plans only pay off with volume. Ko-fi Gold ($12 a month) beats Ko-fi's free plan from 16 sales a month at $15; Payhip Plus ($29) beats Payhip Free from 65.
- Amazon KDP pays 35% or 70% on ebooks. The 70% rate only applies to list prices from $2.99 to $12.99 on Amazon.com (the top rose from $9.99 on July 7, 2026).
- It is self-employment income. You report it on Schedule C and owe 15.3% self-employment tax on 92.35% of your profit once net earnings reach $400, whether or not you get a Form 1099-K.
- Purely AI-generated material can't be copyrighted, according to the U.S. Copyright Office. You can sell it, but you can't stop others from copying it.
Platform Fees Compared
We read each platform's own pricing or help page on October 27, 2026. "Processing" is the card fee charged by the payment processor; on some platforms it is included, on others it is extra.
| Platform | Monthly cost | Platform fee per sale | Card processing (US) | Sales tax handled for you? |
|---|---|---|---|---|
| Etsy | $0 ($0.20 per listing, renews every 4 months) | 6.5% transaction fee; 15% Offsite Ads fee on sales from those ads (12% at $10,000+ yearly sales), max $100 per order | 3% + $0.25 | Yes, in states where Etsy collects as the marketplace |
| Gumroad | $0 | 10% + $0.50 on direct sales (5% + $0.50 after $20,000 in a calendar month); 30% on Discover marketplace sales | 2.9% + $0.30 extra on direct sales; included in the 30% | Yes (merchant of record since Jan 1, 2025) |
| Shopify Basic + Digital Products app | $39 ($29 paid yearly); app free | None with Shopify Payments; 2% with another processor | 2.9% + 30¢ | No, you are the seller |
| Payhip | Free $0, Plus $29, Pro $99 | 5% (Free), 2% (Plus), 0% (Pro) | Stripe or PayPal standard rate, extra | Yes, including US sales tax |
| Ko-fi | Free $0, Gold $12 | 5% on shop sales (Free), 0% (Gold) | Stripe or PayPal standard rate, extra | No, you are paid directly as the seller |
| Stan Store | Creator $29 ($300 a year), Creator Pro $99; no free plan | 0% | Stripe 2.9% + $0.30; PayPal 3.49% + fixed fee | No, Stan does not handle payments directly |
| Teachable Starter | $39 ($29 paid yearly), 5 products | 7.5% (0% on Builder at $89) | 2.9% + 30¢ | Yes ("global payments & taxes") |
| Podia Mover | $49 ($42 paid yearly) | 5% (0% on Shaker and up) | 2.9% + 30¢ (Stripe or PayPal) | Yes |
| Lemon Squeezy | $0 | 5% + 50¢, processing included; some payments cost extra | Included | Yes (merchant of record) |
| Amazon KDP (ebooks) | $0 | You get a royalty instead: 35% of list price, or 70% minus delivery ($0.15 per MB on Amazon.com) for $2.99 to $12.99 books | Included | Yes (Amazon sells the book) |
Sources: each platform's pricing or help page, listed under Sources. Shopify's and Stripe's US pages were read from same-day archived copies because the live pages redirect by location. Etsy's figures match our Etsy fees guide.
Two notes. Lemon Squeezy, which Stripe bought in 2024, said in January 2026 that its goal is to help users move to Stripe Managed Payments, so check its status before you build a store there. And a "merchant of record" platform (Gumroad, Payhip for US sales tax, Lemon Squeezy, Podia, Teachable) is the legal seller to the buyer, so it collects and pays the sales tax; with Shopify, Ko-fi or Stan that job stays with you.
What You Keep From a $15 Sale
A hypothetical example: one $15 download, bought by a US buyer with a US card, no sales tax added to the order, no refund. Each fee is rounded to the cent. The last column spreads the monthly plan price (monthly billing) over 20 sales a month.
| Platform | Fees on the $15 sale | You keep | You keep at 20 sales a month, after plan fee |
|---|---|---|---|
| Etsy | $0.20 listing + $0.98 (6.5%) + $0.70 (3% + $0.25) = $1.88 | $13.12 | $13.12 |
| Etsy, sale from Offsite Ads | $1.88 + $2.25 (15%) = $4.13 | $10.87 | $10.87 |
| Gumroad, direct link | $1.50 + $0.50 + $0.44 + $0.30 = $2.74 | $12.26 | $12.26 |
| Gumroad, Discover sale | $4.50 (30%) | $10.50 | $10.50 |
| Shopify Basic | $0.44 + $0.30 = $0.74 | $14.26 | $12.31 ($39 plan) |
| Payhip Free | $0.75 (5%) + $0.74 = $1.49 | $13.51 | $13.51 |
| Payhip Plus | $0.30 (2%) + $0.74 = $1.04 | $13.96 | $12.51 ($29 plan) |
| Ko-fi free | $0.75 (5%) + $0.74 = $1.49 | $13.51 | $13.51 |
| Ko-fi Gold | $0.74 | $14.26 | $13.66 ($12 plan) |
| Stan Store Creator | $0.74 | $14.26 | $12.81 ($29 plan) |
| Teachable Starter | $1.13 (7.5%) + $0.74 = $1.87 | $13.13 | $11.18 ($39 plan) |
| Podia Mover | $0.75 (5%) + $0.74 = $1.49 | $13.51 | $11.06 ($49 plan) |
| Lemon Squeezy | $0.75 + $0.50 = $1.25 | $13.75 | $13.75 |
| Amazon KDP ebook at $15 | Above $12.99, so 35% royalty only | $5.25 | $5.25 |
| Amazon KDP ebook at $12.99 (2 MB file) | 70% x ($12.99 - $0.30 delivery) | $8.88 | $8.88 |
Our arithmetic from the fees in the table above. Card fees assume the Stripe or Shopify Payments US rate of 2.9% + $0.30; PayPal, international cards and currency conversion cost more. On Etsy, processing is charged on the order total including any sales tax, so a taxed order costs slightly more.
What the table shows:
- At low volume, the no-subscription options win. Payhip Free, Ko-fi free, Lemon Squeezy and Etsy all leave $13 or more with no fixed cost. A $39 Shopify plan costs $468 a year before you sell anything.
- Break-even points. Ko-fi Gold saves $0.75 a sale at $15, so it pays for itself at 16 sales a month. Payhip Plus saves $0.45 a sale and needs 65 sales a month; Payhip Pro saves $0.75 and needs 132.
- Cheap items get hit hardest by fixed fees. On a $3 printable, Gumroad's $0.50 plus $0.30 card fee alone is 27% of the price.
- Amazon's price band matters more than its rate. A $15 ebook earns $5.25; the same book at $12.99 earns $8.88.
For Etsy with your own numbers, use the Etsy fee calculator.
Which Platform Fits Which Product
- Printables, planners, SVG files, wall art: Etsy, because buyers already search there for these. Expect Offsite Ads to take 15% of some sales, and remember that once your shop passes $10,000 in yearly sales the ads become mandatory at 12%.
- Templates (Notion, Canva, spreadsheets), presets, ebooks sold from social media or a newsletter: Gumroad, Payhip, Lemon Squeezy or Ko-fi. You bring the buyer; the merchant-of-record options also handle sales tax.
- Selling from an Instagram or TikTok link in bio: Stan Store is built for that, but it has no free plan, so $29 a month comes out whether you sell or not.
- Courses: Teachable or Podia for video lessons, quizzes and student accounts. Their entry plans cost $39 to $49 a month plus a 5% to 7.5% fee, so a course priced in the hundreds suits them better than a $15 download.
- Many products plus physical items: Shopify, where the free Digital Products app delivers files from a normal store.
- Ebooks for readers who shop on Kindle: Amazon KDP. Amazon sells the book and sets the royalty rules described above.
Many sellers use two: Etsy for buyers who search, plus Payhip or Gumroad for their own audience.
What People Search For
We don't have sales data for digital product categories, and nobody publishes it reliably. What we do have is Google search demand. These are average monthly US searches from Google's Keyword Planner, pulled October 27, 2026:
| Search term | Monthly US searches | Advertiser competition |
|---|---|---|
| resume template | 368,000 | Medium |
| coloring pages printable | 90,500 | Low |
| wedding invitation template | 33,100 | High |
| canva templates | 22,200 | Low |
| svg files | 22,200 | Low |
| notion templates | 18,100 | Low |
| budget spreadsheet | 18,100 | High |
| digital planner | 12,100 | High |
| lightroom presets | 8,100 | High |
| printable wall art | 1,900 | High |
| printable planner | 1,300 | High |
| goodnotes planner | 1,000 | High |
Read this with care. A large share of people searching "resume template" or "coloring pages printable" want a free file, and free versions are everywhere. High advertiser competition is a better hint that people pay, because advertisers bid where searches lead to sales. Before you make anything, search Etsy for your idea, note how many listings exist and how many reviews the top sellers have, and look for a gap you can fill: a narrower audience (a planner for nurses on 12-hour shifts, not "a planner"), a format others skip, or better instructions.
How to Price a Digital Product
- Start from comparable listings. Look at what the top five sellers of the same kind of product charge and what their reviews praise or complain about. Price within that range unless your product clearly does more.
- Mind the fixed fees. Per-sale charges ($0.25 on Etsy processing plus $0.20 per listing, $0.30 card fee, Gumroad's $0.50) take a much bigger share of a $2 item than a $20 one. Bundles raise the order size.
- Price for the platform's band. On KDP, $12.99 is the highest price that still earns 70% on Amazon.com.
- Account for refunds. On Stan, a refund takes back the full price while Stripe keeps its fee; Gumroad returns its own fee on a refund but not the processing part.
- Test with real buyers. Change one price at a time and watch conversion for a few weeks rather than guessing.
Step-by-Step Launch Checklist
- Pick one buyer and one problem. "Freelancers who need to track invoices" is a product brief; "productivity" is not.
- Check demand on Etsy search, Google and the platforms where your buyers already shop. Note the price range and the gaps.
- Make a small first version. One template or one short guide that works, tested by two or three people who match your buyer.
- Check your rights to every font, graphic, photo and piece of text (see the next section). Licenses for fonts and stock graphics often limit resale.
- Choose a platform from the table above: marketplace for search traffic, or a store for your own audience.
- Write the listing: the exact file formats, sizes and software needed (Canva account, Notion, GoodNotes, Lightroom), what is and is not included, and how delivery works. Show the actual product in the images.
- Write a short license for buyers: personal use only, or commercial use allowed, and whether they may resell.
- Set up taxes: keep records from day one, and if the platform does not collect sales tax, find out whether your state taxes digital products.
- Launch to people you can reach: an email list, a social account, a community where you already help people.
- Review after 30 days: views, conversion rate, refunds and questions. Fix the listing or the product before making the next one.
Copyright, PLR and AI-Made Products
Your own work is protected by copyright as soon as it is created. Registering it with the U.S. Copyright Office is voluntary, but the Office notes you must register before you can sue for infringement of a U.S. work.
PLR (private label rights) products are templates or ebooks sold with a license to rebrand and resell. The license is the only thing that gives you rights, so read it: many forbid reselling the files unchanged or giving them away, and the same files are sold to many other buyers. Marketplaces also act on copyright complaints, so expect listings built on someone else's content to be removed.
AI-generated material. In its January 2025 report on copyrightability, the U.S. Copyright Office concluded that "Copyright does not extend to purely AI-generated material", and that prompts alone don't give enough control to make you the author. What you add yourself (your own text, creative edits, the selection and arrangement of material) can be protected. Its March 2023 registration guidance requires applicants to disclose AI-generated content and explain the human contribution. In practice: you can sell AI-assisted products, but you can't stop others from copying purely AI-made parts. Platforms add their own rules: Amazon KDP requires you to tell it about AI-generated text, images or translations when you publish. More detail is in our guides to selling AI art and AI side hustles.
Taxes on Digital Product Income
Income tax and self-employment tax. If you sell to make a profit, you are running a business. You report sales and expenses (platform fees, software subscriptions, stock graphics, fonts) on Schedule C, and the profit is subject to income tax plus self-employment tax. The IRS says the self-employment tax rate is 15.3% (12.4% Social Security and 2.9% Medicare), applies to 92.35% of net earnings from self-employment, and is due if those net earnings are $400 or more. Example (hypothetical): $3,000 of profit gives $2,770.50 of net earnings subject to tax and about $424 of self-employment tax, before income tax. Our 1099 tax calculator runs the full estimate, and the self-employment tax guide explains quarterly payments. If you sell occasionally with no profit motive, the IRS treats it as a hobby: the income goes on Schedule 1, and hobby expenses are not deductible.
Form 1099-K. The One Big Beautiful Bill Act restored the old threshold retroactively. Payment platforms must file a 1099-K only when your payments exceed $20,000 and more than 200 transactions in the year. The IRS says you can still receive one below that, and that you must report all income from selling goods or services whether or not you get a form.
Sales tax. Whether a download is taxable depends on the buyer's state. Washington, for example, applies sales tax to all digital products "regardless of how they are accessed". Who collects it depends on the platform:
- Etsy acts as the marketplace and calculates, collects and remits sales tax in the states that require it; for digital items it uses the buyer's billing address.
- Gumroad, Lemon Squeezy, Payhip (US sales tax), Podia and Teachable collect and remit it as the seller or merchant of record.
- Shopify, Ko-fi and Stan leave it to you. If you sell through your own store, check the rules in your state and in states where you have many buyers.
Realistic Expectations
Digital products are often sold as "passive income". The file is reusable, but the selling is not passive: listings need photos and updates, buyers email questions, platforms change their rules and fees (KDP's price band and Gumroad's tax handling both changed in the past two years), and search rankings drift. No platform we checked publishes what a typical seller earns, so treat any "$10k a month" claim as marketing. A reasonable plan is to spend little, launch one product, and decide on the next one from real sales data. For other ways to earn on the side, see our side hustles comparison.
FAQ
What is the cheapest way to sell digital products?
With no monthly fee, Lemon Squeezy (5% + 50¢, processing included), Payhip Free and Ko-fi free (5% plus card fees) leave the most on a $15 sale in our example, $13.51 to $13.75. Etsy leaves $13.12 but brings its own search traffic. Subscription plans only win at higher volume.
How much does Etsy charge for digital downloads?
The same as for physical items: $0.20 per listing, 6.5% of the sale price, and 3% + $0.25 payment processing in the US. A sale that came from an Offsite Ad adds 15% (12% for shops with $10,000+ in yearly sales). On a $15 download that is about $1.88, or $4.13 with Offsite Ads.
Can I sell digital products without a website?
Yes. Etsy, Gumroad, Payhip, Ko-fi and Stan all give you a hosted product page and deliver the file after payment.
Do I need a business license to sell digital products?
It depends on your state and city, and some require a general business license or a sales tax permit if you collect tax yourself. Check with your state revenue department and city.
Do I have to pay taxes on digital product sales?
Yes. Profit is taxable income, and self-employment tax applies when net earnings reach $400. You must report it even without a Form 1099-K, which platforms now file only above $20,000 and 200 transactions.
Can I sell AI-generated digital products?
Yes, if the platform allows it, but purely AI-generated material is not protected by copyright, so others can copy it. Some platforms require disclosure; Amazon KDP asks you to declare AI-generated text, images and translations.
What is the 70% royalty price range on Amazon KDP?
$2.99 to $12.99 on Amazon.com since July 7, 2026 (previously $2.99 to $9.99). Outside that range, and for books sold outside the 70% territories, the royalty is 35%. Delivery costs of $0.15 per MB are deducted on 70% sales.
Sources
- Etsy, Fees & Payments Policy (updated Oct 5, 2026) and Etsy Payments Policy (updated July 31, 2026)
- Etsy Help, What are the fees and taxes for selling on Etsy?
- Gumroad Help, Gumroad's fees and Gumroad pricing
- Shopify pricing (US) and Shopify Digital Products app
- Payhip pricing
- Ko-fi pricing
- Stan, Creator vs. Creator Pro and Stan, Stripe, and PayPal transaction fees
- Teachable pricing and Podia pricing
- Lemon Squeezy pricing and Lemon Squeezy 2026 update
- Stripe pricing (US standard card rate)
- Amazon KDP, eBook royalties, eBook list price requirements, Digital book pricing page and content guidelines
- IRS, Self-employment tax and Topic 554
- IRS, Form 1099-K threshold under the One Big Beautiful Bill (IR-2025-107) and Understanding your Form 1099-K
- IRS, Hobby or business
- Washington Department of Revenue, Digital products including digital goods
- U.S. Copyright Office, Copyright and Artificial Intelligence, Part 2: Copyrightability (January 2025) and registration guidance for works containing AI-generated material (88 FR 16190)
- Google Ads Keyword Planner, US average monthly searches, October 27, 2026
This article is for general information and is not tax, legal or business advice. Platform fees, tax rules and copyright guidance were checked against the sources above on 2026-10-27. The $15 sale and the tax example are hypothetical. Platforms change their fees; check the pricing page before you choose one.
