Understanding Paddle's Acceptable Use Policy

Today, we're diving into the Acceptable Use Policy (AUP) - specifically, what you can and cannot sell using Paddle's platform.

What Can You Sell Using Paddle?

When you create an account on Paddle, the first form you'll encounter will prompt you to select your product category. If you try to select anything other than a digital product or SaaS, you'll hit an error message. This is because of Paddle's Acceptable Use Policy, which you can read in detail here.

Why Digital Products and SaaS Only?

There are certain restrictions imposed by credit card providers and payment networks that Paddle must adhere to:

• Physical Products: Paddle does not allow physical products because these require different compliance measures.
• Gambling Products: Mainly due to the legal complexities and risks involved with gambling.
• Human Services: Includes services such as consulting, which are explicitly mentioned as restricted.

As Paddle acts as the merchant of record, they have additional rules they must follow to ensure compliance and minimize risk.

How to Get Approved

To avoid any complications with Paddle, it’s important to clearly present your business type and offerings right from the start. Here are some tips:

• Clear Communication: When setting up your account, explicitly mention that you’re aware of the restriction against selling consulting services. This can help expedite your approval process.
• Categorize Correctly: Ensure that the category you choose aligns with what's allowed by Paddle. The appropriate categories usually fall under digital products or SaaS.

Examples of Digital Products and SaaS

1. Digital Products: Ebooks, online courses, software licenses.
2. SaaS: Subscription-based software, cloud services.

Both categories must not be tangentially related to any form of consulting or human service.

Exceptions and Conditions

Support Services

If your main business is SaaS, you can provide some related support services. Examples include:

• Support Plans: Subscription plans that offer customer support as part of the SaaS package.
• Consultation Packages: Only if they are supplementary to the primary SaaS product.

During the onboarding process, you need to explain these services to Paddle and how they relate to your SaaS product.

Freelancers and Consultants

Freelancers or consultants who provide project services and want to sell digital products can use Paddle, but there's a catch:

• Digital Product Focus: If Paddle isn't convinced that you're selling actual digital products, you might get rejected initially. For instance, if your website still predominantly promotes consulting services, it could pose a problem.

Pro Tip: Make it clear in your communication with Paddle that you understand consulting services can't be sold through their platform, and specify which digital products you plan to sell. Once clarified, you should be good to go!

"As long as you have a digital product or a SaaS as your main business or the product you're selling, you should be fine creating a Paddle account."

Quick Reference Guide

Things You Cannot Sell on Paddle:

• Physical products
• Gambling products
• Consulting services
• Human services

Things You Can Sell on Paddle:

• Digital Products
• SaaS
• Support services related to your SaaS product

Additional Insights on Acceptable Use Policy

Payment Restrictions

Being compliant with payment restrictions is crucial:

• Credit Card Providers: These providers have strict rules about the types of businesses they support.
• Payment Networks: They also add layers of compliance and security measures.

For Paddle, staying compliant means avoiding high-risk product categories and ensuring the integrity of their merchant records.

Approval Tips

To ensure a smooth approval process with Paddle:

• Provide Detailed Information: Always provide all necessary documentation and detailed descriptions of your products.
• Be Transparent: Clearly outline your business practices and product offerings.

Examples of Best Practices

1. Clear Product Listings: Have a well-structured listing of your digital products or SaaS offerings.
2. Comprehensive Descriptions: Provide thorough descriptions to eliminate any ambiguity.
3. Compliance Assurance: Regularly update your product listings to stay aligned with Paddle’s policies.

FAQ Section: Common Questions About Paddle's AUP

What if I Want to Sell a Mix of Digital and Physical Products?

Unfortunately, mixed business models are not supported by Paddle. You'll need to use another service for physical product sales.

How Can I Shift My Consulting Business to a Digital Product Focus?

• Create Digital Products: Think about creating ebooks, online courses, or software tools that can be sold.
• Rebrand Your Website: Ensure your website places a primary focus on these new digital offerings.

Can I Use Paddle for crowdfunding or fundraising?

Typically, Paddle’s platform is designed for SaaS and digital products. Crowdfunding or fundraising might not fit within their accepted models.

What Happens If I Violate the Acceptable Use Policy?

Violating the AUP can lead to account suspension or termination. Always make sure to adhere strictly to the guidelines provided by Paddle.

Conclusion

It’s crucial to understand Paddle’s Acceptable Use Policy if you plan on using their platform. Always be upfront about your business model and product offerings to avoid any hiccups in the onboarding process.

• Be Clear: Make it evident what you are selling and avoid restricted categories.
• Stay Informed: Regularly review Paddle's AUP to ensure compliance.

By being proactive and communicative, you can seamlessly integrate with Paddle and leverage their platform for your digital product or SaaS business.