The gap between finishing a plugin and running a plugin business

[dannytaurus]

@soundsync Payhip isn't a Merchant of Record, they are a reseller, which is similar in some ways but payouts differ quite a bit.

As far as I can gather (UK/EU buyers only, US/CA is still unclear):

Same as MoR:

1. Payhip buys a licence from the seller
2. Payhip sells the licence to the buyer, adding VAT where necessary

Different to MoR:

3. The revenue, inc. VAT, goes straight to the seller's Stripe/PayPal account
4. Payhip then takes the VAT from the seller's Stripe/PayPal account and remits it quarterly
5. For payment and contract purposes, the seller remains responsible for refunds, chargebacks, etc.
6. Payhip never holds seller funds, so it cannot 'freeze' them nor charge for them to be paid out

For US/CA buyers Payhip are a 'facilitator', not 'reseller', so the situation might be different.

Also unclear when a seller refunds a buyer, whether Payhip returns the VAT they collected, or whether the seller has to eat it.

For buyers outside UK/EU and US/CA, Payhip isn't involved in sales tax at all. The seller can set up custom tax rules, in which case Payhip charges the tax at checkout and leaves it in the seller's Stripe/PayPal account. Registering in the country and filing the tax are the seller's job, where the country requires it. That part is a bit scary.

[David Healey]

@dannytaurus said in The gap between finishing a plugin and running a plugin business:

That part is a bit scary.

That's a big no from me. Since switching to an MoR there's no way I'd go back.

[dannytaurus]

@David-Healey Same here

[dannytaurus]

@David-Healey Are you on Moonbase now?

[David Healey]

@dannytaurus Yes, have been since June, very happy with it.

[cartemtune]

@dannytaurus i'd love to see the comparison list please! :)

[cartemtune]

@dannytaurus wow thanks for this detailed breakdown. So I guess there are some pros and cons here. I've personally blocked countries outside of US, CA, UK, and EU so I won't have to deal with sales taxes there but maybe I should also consider other countries in case they can provide substantial revenue.

Just curious, can any experienced sellers let me know whether it's worth opening up my store to the rest of the world? In my experience, most of my customers seem to come from US, CA, UK, and EU so I never felt like I'm missing out. I'd love to know before I decide to switch again because...it's a lot of work!

But the part about Payhip offering instant payouts (i.e. never holding funds) is another reason why I moved away from Gumroad. I feel better knowing that a platform can't suddenly take my money away . Gumroad has a minimum payout threshold of $100 (I assume because the platform needs to safeguard itself from refunds and chargebacks), but that part kinda sucks

[David Healey]

@cartemtune said in The gap between finishing a plugin and running a plugin business:

I've personally blocked countries outside of US, CA, UK, and EU

Those are pretty much the only ones that you have to deal with sales tax in anyway.

@cartemtune said in The gap between finishing a plugin and running a plugin business:

let me know whether it's worth opening up my store to the rest of the world?

Might as well since you're already doing the hard work. I get quite a few customers from Japan, New Zealand, Australia, not so much from the rest of the world.

[dannytaurus]

@cartemtune I'd prefer direct payment too, but I rate using a Merchant Of Record over direct payouts, and MoR never pay direct.

At least Gumroad doesn't charge a fee for a payout. Moonbase does, and they're the only ones. €5 per payout. Feels a bit like nickel-and-diming. Their whole fee structure is death by a thousand cuts Takes them from looks very competitive to being the most expensive, behind only Gumroad.

[David Healey]

@dannytaurus said in The gap between finishing a plugin and running a plugin business:

€5 per payout.

I go for monthly payouts to minimize it

[dannytaurus]

@David-Healey It's not really the amount/percentage, it's the principle. They use Wise, which has no associated fee. So it's just pure markup.

[dannytaurus]

@David-Healey

Yes, have been since June, very happy with it.

Is this for Libre Wave? Your product prices are in a similar range to mine.

[David Healey]

@dannytaurus Yes

[soundsync]

@dannytaurus A bit of a rigamarole but I'm biased lol.

@cartemtune I'd open it up. As David said, Japan & Australia have a good market, about 15% of my sales are these 2 places.

[Lindon]

@cartemtune agree with every one here, open it up - I get a nice percentage of sales form Japan and ANZ

[dannytaurus]

@cartemtune Same here - my non-UK/EU/US/CA sales are about 15% with AUS at 8.5%.

[tobbentm]

@dannytaurus heard!

We're working hard on removing the small fees we have, we just made the decision early on that we'd rather be realistic and transparent about what we have costs on, and forward those, instead of blending everything.
We may consider mashing more features into a single fee, but we also get really nice feedback on the fact that we are fully usage-based, and al-la-carte, so that's difficult to balance.
Some upcoming changes to our business structure and better volume deals should make our pricing way more attractive come new years.

[dannytaurus]

@tobbentm Great to hear!

[cartemtune]

@cartemtune thanks folks! So Australia, New Zealand, and Japan seem to be the countries that I need to take a look at. I actually can easily unblock these countries on my store and set up custom tax rates on my store so I can at least collect the taxes, but I definitely need to do more research on how to remit them correctly. maybe after that then I'll start thinking about moving to an MOR if I need to. I'm just already so cozy here lol migrating platforms is so much work :')