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Selling a WordPress Plugin With Yearly Renewals: Freemius vs EDD vs WooCommerce

Varun Dubey

Founder, Wbcom Designs · Published Nov 11, 2026 · Updated Nov 11, 2026

Freemius vs EDD vs WooCommerce comes down to who runs the work. If you sell a WordPress plugin with yearly renewals, you have three common ways to do it. Freemius is a hosted service that takes a share of every sale and runs payments, tax, licences and updates for you. Easy Digital Downloads (EDD) is a plugin you run on your own store, with a licensing add-on and a yearly fee. WooCommerce is free, but licences and renewals come from paid extensions you add yourself. The short answer: pick Freemius if you want the least running work and accept a revenue share, pick EDD if you want to own the store and the customer list, and pick WooCommerce only if you already run a WooCommerce shop and will add licensing on top.

This is a decision guide for plugin authors and small plugin businesses, written so a non-developer owner can follow it. Developer detail is marked as such. We sell many premium plugins with licences and yearly renewals on our own EDD store, so parts of this are first-hand, and we say clearly where they are not. Every price below comes from the vendor’s own page, read on 11 November 2026, and vendors change prices. Treat the numbers as a snapshot and check the linked pages before you decide.

Freemius vs EDD vs WooCommerce: the quick comparison

Question	Freemius	Easy Digital Downloads	WooCommerce
What it is	Hosted commerce service for WordPress products	Plugin on your own WordPress site	Free shop plugin on your own site
How you pay	Share of each sale, no monthly fee	Yearly pass, plus payment fees	Free core, yearly fees for each paid extension
Who handles sales tax and VAT	Freemius, as merchant of record	You	You
Licence keys and update delivery	Included	Software Licensing add-on	Separate licence extension
Who owns the customer relationship	Shared, through the Freemius checkout and dashboard	You	You
Who gets the licence-check traffic	Freemius servers	Your server	Your server
Best fit	Small team, global buyers, little time for operations	Teams that want control and a direct customer list	Stores that already sell physical or mixed products on Woo

The rest of this post explains each row, with numbers, and then covers the work that none of the three removes completely.

First, what yearly renewals actually need

A yearly renewal sounds like one feature. It is really a chain of small jobs, and each one can fail without anyone noticing. When you compare platforms, compare how many links in this chain each one owns for you.

A licence record. A key, an expiry date, the sites it is active on, and a limit on how many sites it may use.
Update delivery. The plugin on a customer’s site must ask your server for new versions, and your server must hand over the download only to people with a valid licence.
A renewal reminder. An email before the licence expires, with a link that renews in one click, ideally at a discount.
Charging the renewal. Either the card is charged automatically, or the customer pays by hand when they click the link.
Failed payments. Cards expire, banks refuse, and someone has to retry and tell the customer.
Tax. Sales tax in the United States, VAT in the European Union, and similar rules elsewhere, charged on every renewal as well as the first sale.
Refunds and disputes. A refund must also switch off or adjust the licence. A chargeback needs evidence sent to the bank on time.
Support access. Support staff need to see who owns a licence and whether it is active, without asking the customer to prove it.

Freemius takes on most of this chain. EDD gives you the tools for most of it and leaves the running to you. WooCommerce gives you the shop and leaves you to assemble the rest. Neither choice is wrong. They suit different businesses.

Freemius: the hosted route

What it is

Freemius describes itself as the commerce layer for WordPress products. You add its software development kit (SDK) to your plugin. The SDK handles the licence, the checkout, updates and opt-in analytics. Customers buy through a Freemius checkout, and Freemius is the seller of record for the transaction.

What it costs

According to the Freemius pricing page (last modified 4 October 2026, read on 11 November 2026):

The standard rate is 3.8% plus 50 cents per transaction, plus gateway fees. The page says there are no setup fees and no monthly fees.
WordPress products carry an extra 2.3%, which the page’s FAQ describes as applying to plugins, add-ons, themes, templates and similar products.
The percentage steps down as monthly sales rise: 3.8% up to $50,000 a month, 3.7% from $50,000 to $60,000, 3.5% from $60,000 to $70,000, 3.0% from $70,000 to $80,000, 2.0% from $80,000 to $90,000, 1.0% from $90,000 to $100,000, and 0.5% above $100,000.
Payouts have a $100 minimum balance and are paid monthly by PayPal, Payoneer, Wise or wire transfer.

Put simply, for a typical plugin business below $50,000 a month, the page reads as 3.8% plus the extra 2.3% for WordPress products, so roughly 6.1% plus 50 cents per sale, with gateway fees mentioned on top. We could not confirm from the page whether the extra 2.3% also steps down at high volumes, or exactly how the gateway fee is added and shown on a statement. If you are modelling a business, ask Freemius to put the all-in rate for your product type in writing before you commit.

What it handles for you

The same page lists, as included: merchant of record status, global payments, automated sales tax and VAT with EU VAT number checks, fraud protection, chargeback and dispute management, PCI compliance, software licensing with multi-site licences, automatic updates and release management for WordPress products, and a built-in affiliate platform. The page does not list refund processing as a feature, and offers a money-back guarantee for trials. If refund handling matters to you, ask how it works.

Merchant of record is the part that matters most to a small team. It means the tax authority sees Freemius as the seller. You are not the one registering for VAT in a dozen countries or filing returns for each. For a one-person plugin shop selling worldwide, that is a large amount of paperwork you never see. The price of it is the revenue share, and the trade-off that Freemius sits between you and your buyer.

What it leaves you

The customer relationship is shared. Buyers deal with a Freemius checkout and account area. Exporting your customers, branding the checkout the way you want, and moving away later all need more thought than on a store you own. Ask about export and exit terms before you integrate the SDK deeply.
You work inside its model. Plans, trials, upgrade rules and renewals follow what the platform supports. Unusual deals, such as agency bundles with custom terms, may not fit.
Your plugin carries its SDK. That is code you ship and must keep updated. WordPress.org has its own rules about how freemium plugins may present upgrades, so read them before you add any SDK to a plugin in the directory.
Support still sits with you. The platform sells and licenses. Your customers still write to you when something breaks.

Who should choose it

Freemius fits a small team that sells worldwide, has no one to spare for tax and billing operations, and prefers a share of revenue over fixed costs and server work. It also suits an author who wants trials, upgrade prompts and an affiliate programme running from the first week. It is a harder fit for a business that wants to own its customer list from day one, or that already sells many products through a store of its own.

Easy Digital Downloads: the owned-store route

What it is

EDD turns a WordPress site into a store for digital products. You run the site, the checkout, the customer accounts and the emails. For plugin authors the key piece is the Software Licensing extension. Its page lists licence keys per product, renewal discounts, automated reminder emails before a licence expires with one-click renewal links, one-click updates for plugins and themes, and upgrade paths between licence levels with prorated pricing.

What it costs

According to the EDD pricing page (read on 11 November 2026), the paid passes are:

Pass	Regular price per year	Introductory price, first year	Sites
Personal	$199	$99.50	1
Extended	$399	$199.50	1
Professional	$599	$299.50	2
All Access	$999	$499.50	3

The page notes that all renewals are at full price, so the introductory figure applies once. A free Lite version exists on WordPress.org. The page lists Software Licensing and API under the Professional and All Access plans. For the Personal and Extended passes, the text we could read did not list it, so we cannot confirm from that page that either includes licensing. Check the comparison table on the live page, since licensing is the feature you most need.

Payment fees are separate. EDD’s own guide, last updated 28 May 2026, describes a 3% EDD platform fee on top of Stripe’s standard rate. It says the fee exists on the free plan and the Personal plan only, and that the Extended Pass or higher removes it. Stripe’s base fee for a United States card is 2.9% plus 30 cents, as shown for the same figure on the WooPayments page below. Stripe does not waive it.

What it handles for you

Licence keys, renewal reminders, renewal discounts, update delivery and upgrade paths are tools you switch on. The data stays in your database. Your customers deal with your brand from the first click to the receipt. You can also build the exact renewal rules you want: a loyalty discount, a grace period, a price that depends on how long someone has been a customer.

What it leaves you

This is where the real cost sits, and it is mostly time and attention, not money:

Tax and VAT. EDD can add tax at checkout, but you are the seller. You register, collect and file. Some owners add a tax service on top. Nothing in the EDD page makes you a merchant of record.
Hosting and load. The licence server is your server. We come back to this below, because it surprises almost everyone.
Failed renewals. You decide how many times to retry, how long the grace period lasts, and what the emails say.
Chargebacks and fraud. You answer them.
Updates and security of the store itself. A store that sells software is a target, and it needs the same care as a bank’s website scaled down.

Who should choose it

EDD fits a team that wants to own the store, the brand and the customer list, can handle (or hire out) tax and hosting, and expects to sell enough that a revenue share would cost more than a pass and a server. It also fits a team with many products or custom deals, because the rules are yours.

WooCommerce: the shop you assemble

What it is

WooCommerce is the most widely used shop plugin for WordPress, and the core is free to download. It is built for selling any kind of product, so selling software is one use among many. That matters because the two jobs a plugin seller needs most, licence keys and yearly renewals, come from paid extensions, not from core.

What it costs

From the WooCommerce pages, read on 11 November 2026:

WooCommerce Subscriptions costs $279 for a one-year plan in US dollars. It lets customers pay weekly, monthly or yearly, and the page says it includes automatic renewal payments with built-in retries and emails to the customer when a payment fails.
The Software Add-on costs $179 for a one-year plan in US dollars. It generates licence keys when an order completes, lets you manage and resend keys, offers discounted upgrades for older keys and has an API for activating and validating licences. The vendor page says that in most cases its API Manager product is the better fit, so compare the two before you buy either.
For payments, the WooPayments fee page shows a base fee of 2.9% plus 30 cents for cards in the United States. The WooPayments page says there are no setup costs or monthly fees, and that it supports subscriptions in the United States only. You can also use Stripe or PayPal directly.

Adding it up, the two extensions alone come to $458 a year at the prices shown, before any hosting, support extension or tax tool. We did not price a full Woo licensing and update stack end to end, and API Manager’s price was not on the pages we read, so we leave that figure out rather than guess.

What it handles for you

A full shop: cart, checkout, order screens, customer accounts, coupons, a huge extension catalogue, and a large pool of developers and agencies who know it. If your plugin business sits next to a store that sells other things, such as printed guides, hosted services or physical goods, the shared order screen and reports are a real benefit.

What it leaves you

Everything EDD leaves you: tax, hosting, load, failed payments, disputes and store security.
Glue between extensions. Subscriptions renew an order, the licence extension watches orders, and your update server reads the licence. Each link can drift when one extension updates. Plan to test the whole path after every update.
A shop built for physical goods. Shipping, stock and variations are there whether you want them or not. Plugin sellers usually switch most of it off.

Who should choose it

WooCommerce fits a business that already runs a Woo store with staff who know it, and that wants plugin sales in the same orders and reports. If you are starting from nothing and the only thing you sell is a plugin, it is usually more setup for the same result. We looked at how stores on Woo and EDD are changing for AI shoppers in AI Shoppers at Checkout: What WooCommerce and EDD Stores Should Do Now, which is worth a read if you are deciding between the two.

The hidden running work, one job at a time

The comparison above is mostly about money. The honest difference between the three is how many of the following jobs land on your desk.

1. Licence checks put load on your store

Developer detail. With EDD or Woo, every site running your plugin asks your server three things on a schedule: is this licence valid, is there a new version, and can I download it. Each request runs WordPress and PHP on the same server that handles customer orders. On a small catalogue that is invisible. On a store with many thousands of active installs, the background traffic competes with checkout.

We know this one first-hand. In our own write-up, moving EDD licence checks to a Cloudflare Worker, an earlier outage showed pages timing out while the processor sat mostly idle. The cause was file locking on PHP sessions, not lack of capacity, and the fix was switching sessions to the database and blocking a bot pattern at the edge. Separately, more than half of the download requests in one day of logs were refused with a 401 error, many from sites with valid licences, because of how link expiry was checked against the store’s timezone. Excluding the licensing URLs from the page cache cut refused update downloads from 60% to 12% over the same six hours, compared with the day before. We are also testing a second small service at the edge that can only answer “yes” to licence checks and forwards every “no”, activation and error to the store. As of that write-up, it was running in a compare mode that records what it would have answered while the store still answers everyone, and the author described the results as a few hours of traffic, not a verdict.

The lesson for a decision guide is simple. Freemius takes this load off you, because the licence and update servers are theirs. EDD and Woo give it to you. It is not a reason to avoid them, but it is a cost to plan for, and a good reason to put caching and monitoring in place before your install count grows.

2. Updates that do not show up

The most common support message a plugin seller gets is “the update is not showing.” Our guide on why premium plugin updates do not appear in WordPress lists the usual causes: an expired licence, a licence tied to another domain, a host blocking requests to the update server, a stale update cache, and duplicate plugin folders. It also describes a bug of our own, where the licence screen saved the key under one name and the update checker read it under another, so the licence looked active but no updates were requested. The fix for authors is to read the key through one function that both the licence screen and the update checker call, and to copy a renamed setting on upgrade rather than ask customers to type the key again. No platform removes this risk, because it lives in your plugin’s code. Freemius’s SDK reduces it by providing that code. On EDD or Woo you write or adapt it.

3. Renewal reminders and the grace period

Decide before launch what happens in the days after a licence expires. Does support stop at once? Do updates stop at once? Is there a grace period at the old price? Customers read a renewal email as a bill, a threat or a courtesy depending on its wording. The sequence we suggest as a starting point is a reminder a month before, another a week before, a notice on the day, and a last offer a few weeks after expiry. Write all four emails before you launch, not after the first angry reply.

For more on what a lapsed licence means from the buyer’s side, and how to read terms before you renew, see our checklist Your Plugin Vendor Just Changed the Price: A Licence-Risk Checklist for Site Owners. It is written for buyers, and it is a useful way to see your own licence terms through a customer’s eyes.

4. Failed payments

If renewals charge the card automatically, some will fail. Cards expire and banks block charges. Every platform needs a retry rule and a customer email. WooCommerce Subscriptions advertises built-in retries and failed payment emails. For the others, ask what is built in and what you must write. Whatever you choose, test a failed payment end to end with a test card before you rely on it. A retry that never fires is invisible until the money is missing.

5. Tax and VAT

This is the job that surprises plugin authors most, because it applies to digital goods sold across borders and to every renewal. Freemius states that it acts as merchant of record and handles sales tax and VAT. With EDD or Woo, you are the seller, so you are responsible for registering where the rules require it, charging the right rate and filing. We are not tax advisers, and the rules depend on where you and your buyers are. Talk to an accountant before you launch, and decide whether a tax service is worth adding.

6. Refunds, disputes and licence state

A refund should do something to the licence. Decide whether it deactivates the key, revokes updates, or does nothing. Then test it. Write a short refund policy that matches the behaviour, because a policy that says one thing while the system does another produces the most painful support threads.

7. Support that can see the licence

Your support team should be able to look up a customer by email and see the licence, its sites, its expiry date and its renewal history in one place. On a store you own, that is a screen in your admin you set up. On a hosted service, it is the vendor’s dashboard. Either way, make it a launch requirement, because every support reply without it costs a round trip.

8. Moving later

Changing platforms with live yearly subscribers is hard. Customers’ licence keys sit in the old system, active sites are registered against them, and plugins in the field point at the old update address. Moving from a hosted service to your own store, or the other way, means a long period when both run. Pick the platform you can live with for three years, and ask each vendor now how export and exit work.

A decision table by business type

Your situation	Usual best fit	Why
One author, selling worldwide, no spare time for tax or servers	Freemius	Merchant of record, licences and updates included, no fixed cost
Small team, several plugins, wants the brand and the customer list	EDD	You own the store, the data and the renewal rules
Already runs a Woo shop with staff who know it	WooCommerce with a licence extension	One set of orders, reports and people
Free plugin in the WordPress.org directory with an upgrade	Freemius or EDD, after reading the directory rules	Both can work, but the directory limits how upgrades are shown
Expecting large volume within two years	Model both: the Freemius volume tiers against a pass plus servers	The cheaper route changes as monthly sales grow
Agency or enterprise deals with custom terms	EDD or Woo	Custom contracts rarely fit a standard hosted plan
No one to run a server and no tax knowledge	Freemius	Pay a share to avoid the running work

A simple cost model you can run yourself

Write down three numbers: your average sale value, your sales per month, and the share that are renewals. Then compare these two lines for a month of sales.

Freemius: sales times the platform rate for your product type, plus 50 cents per transaction. Use the all-in rate Freemius confirms in writing, not the headline 3.8%.
EDD or Woo: the yearly pass or extension fees divided by twelve, plus the payment processor’s fee (2.9% plus 30 cents for a US card at Stripe’s base rate), plus the EDD platform fee if your pass still carries it, plus hosting, plus the hours you spend on tax, support and server care, valued at what your time costs.

At low volume, the hosted route usually costs less in total once your own hours are counted, because fixed costs and operations dominate. As volume grows, a revenue share keeps growing with sales while a pass does not, so the owned route gets cheaper per sale. Where the lines cross depends on your numbers. We deliberately do not give a single crossover figure, because it moves with product price, refund rate and how much of the running work you do yourself.

Questions to ask any vendor before you sign

What is the all-in fee for a WordPress plugin sold at my price, including gateway fees and per-transaction charges?
Who is the merchant of record, and who files tax and VAT?
How do refunds change the licence state?
What happens to my customer data and active licences if I leave? Can I export them?
Where do licence and update requests go, and what load do they put on my server?
What happens to renewals if the platform has an outage?
What is the notice period for fee changes?

The last question is not a hypothetical. Our other post on StellarWP alternatives shows what changes when a vendor you rely on is reorganised, and why a plugin business should care about the answers to questions like these.

How Wbcom can help

We run a store of our own with licences and yearly renewals, so we have met most of the jobs above in production. We can help in three ways, depending on how much of the work you want to hand over.

Plan the stack. We review your product, your buyers and your volume, and recommend a platform with the cost model above filled in for your numbers.
Build it. We set up the store, the licence and update flow, renewal emails, failed payment handling and the support lookup screen, and test the whole path with real purchases, expiries and refunds before you launch.
Run it. We can look after the store and licence server after launch: updates, security, caching and monitoring so licence checks do not slow your checkout.

If you are choosing a platform or fixing one that is already live, talk to our team about a WordPress consultant session. Bring your product, your current numbers and the jobs from the list above that worry you most. We will tell you plainly which route we think fits, including when the answer is a platform that is not ours to build.

Common questions

Is Freemius cheaper than EDD?

It depends on volume. Freemius has no fixed fee and takes a share of each sale, so it costs little when sales are low. EDD charges a yearly pass plus payment fees, so it costs more when sales are low and less per sale when sales are high. Count your own hours as part of the cost.

Does WooCommerce handle software licences by itself?

No. The core is free, and licence keys and yearly renewals come from paid extensions such as WooCommerce Subscriptions and the Software Add-on or API Manager.

Who pays the VAT on a plugin sold to a customer in Europe?

On Freemius, the platform states it is the merchant of record and handles sales tax and VAT. On EDD or WooCommerce you are the seller and are responsible. Ask an accountant who knows your country.

Can I switch platforms later?

You can, but it is slow. Licence keys, registered sites and update addresses all need to move without breaking live customers. Ask each vendor how export and exit work before you start.

What is the most common support problem for sellers?

Updates not appearing. It usually comes from an expired licence, a licence on the wrong domain, a blocked update request or a bug in how the plugin reads its own key.

What we could not verify

Whether the extra 2.3% Freemius charge on WordPress products changes at higher volumes, and exactly how gateway fees are added on top. The pricing page does not say.
Whether the EDD Personal and Extended passes include Software Licensing. The page text we could read lists it under Professional and All Access only.
The price of WooCommerce API Manager, which was not on the pages we read.
Stripe’s current US card fee on Stripe’s own page. We cite the 2.9% plus 30 cents figure from the WooPayments fee page and EDD’s guide instead.
Refund processing on Freemius. The pricing page does not list it as a feature.
What other plugin sellers pay in practice. We describe only what each vendor publishes and what we run ourselves.