You need a licensing system. You have three options:
- Build it yourself — Full control, full responsibility
- Use a SaaS service — Keygen.sh, LemonSqueezy, Gumroad
- Self-hosted solution — Your servers, someone else's code
Each approach has trade-offs nobody talks about. Let's dig in.
The Quick Comparison
| Approach | Setup Time | Monthly Cost | Your Data? |
|---|---|---|---|
| Build Your Own | 3-6 months | Hosting only (~$20-100) | Yes |
| Keygen.sh | Days | $99-499/mo | No (their servers) |
| LemonSqueezy | Hours | 5% + payment fees | No |
| Gumroad | Hours | 10% + payment fees | No |
| Self-Hosted (Admin Pro) | Hours | Hosting only after purchase | Yes |
Option 1: Build It Yourself
The DIY approach means complete control. You design the architecture, write the code, and own everything.
Pros
- Complete control over features
- No external dependencies
- Your data stays yours
- No per-license or per-customer fees
Cons
- 3-6 months of development
- Ongoing maintenance burden
- Security is your responsibility
- Time not spent on your product
Real cost: At $150/hour for senior engineering, 500 hours of development = $75,000 in opportunity cost. Plus ongoing maintenance.
Option 2: Keygen.sh
Keygen is a dedicated licensing API service. You integrate their SDK, they handle validation.
Pros
- Well-designed API
- Feature-rich
- Good documentation
- Quick to implement
Cons
- $99-499/month ongoing
- Data on their servers
- Vendor lock-in
- If they shut down, you scramble
5-year cost: $99/mo × 60 months = $5,940 minimum. At higher tiers, $30,000+.
Option 3: LemonSqueezy / Gumroad
These are payment platforms with basic licensing built in. Good for simple use cases.
Pros
- Payment + licensing in one
- Very quick setup
- Handle tax compliance
Cons
- 5-10% of every sale
- Limited license customization
- Basic activation features
- No hardware fingerprinting
Cost at scale: $100,000 in sales × 10% = $10,000 to Gumroad. Every year. Forever.
Option 4: Self-Hosted Solution
Deploy someone else's licensing system on your own servers. You control the data, they provide the software.
Pros
- Your servers, your data
- One-time purchase available
- No per-license fees
- Customize as needed
Cons
- Need to manage hosting
- Upfront cost higher than SaaS
- Self-serve support
The Hidden Trade-off: Data Ownership
When you use a SaaS licensing service, your customer data—emails, license history, payment info—lives on their servers.
This matters because:
- Compliance — GDPR, SOC 2, HIPAA requirements may conflict
- Continuity — If the service shuts down, you lose access
- Migration — Moving away is painful (vendor lock-in)
- Analytics — You see what they show you, not raw data
For some businesses, this doesn't matter. For others, it's a dealbreaker.
My Recommendation
For Hobby Projects / Side Income
Use Gumroad or LemonSqueezy. The percentage cut hurts less at small scale, and you're shipping immediately.
For Serious Commercial Software
Either build your own (if you have the resources) or use a self-hosted solution. The 5-year cost comparison favors ownership.
For "I Need This Working Next Week"
Keygen.sh or self-hosted solutions like Admin Pro. Both can be integrated in days.
Conclusion
There's no perfect answer. The right choice depends on:
- Budget — Upfront vs ongoing costs
- Time — How soon do you need to ship?
- Control — Does data ownership matter?
- Scale — Percentage fees hurt more at volume
Run the numbers for your specific situation. A $99/month service is cheap until you're paying $500/month because you grew. A $2,000 one-time purchase is expensive until you calculate 3 years of SaaS fees.