🪄 Paddle's 'Credit Card Fees' Hack To Increase Bottom Line

PLUS: Generated $441k With Money Keywords Doing SEO

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Startup Spells 🪄
October 01, 2024

Paddle's 'Credit Card Fees' Hack To Increase Bottom Line

Paddle is a payment platform for B2B and B2C software businesses. It works as a merchant of record, meaning they handle payment processing, taxes, and disputes. Paddle integrates with platforms like Stripe and other region-specific processors to accept payments, including options like Brazilian PSP to accept PIX.

They use a straightforward "Credit Card Fees" strategy to boost profits by passing on credit card processing fees to the customer.

We'll demonstrate this using Tailwind UI, a collection of web design components built with Tailwind CSS.

Tailwind UI offers pricing of $399 for individual access.

Tailwind UI Pricing For Single Person

Once you click the "Get all-access" button, you're directed to a details page where you provide your email and country information.

Tailwind UI Pricing - Details Page

After doing so, you'll see the final price.

Tailwind UI Pricing - Payment Page

For example, the original price of $399 becomes $430.92, with $31.92 added for taxes (an 8% increase).

This approach of passing additional fees directly to customers helps increase revenue without affecting the core price.

Even entrepreneur Alex Hormozi, who owns lots of physical businesses through Acquisition.com Portfolio, recommends this strategy for businesses:

"A lot of businesses pay credit card processing fees of 3-4%. But they don't charge those fees to customers. If you're one of them, consider doing it. If you make 20% margins and add 4% fees, you increase your profit by 20% (24% vs. 20%). It won't affect your close rates, but it will improve your bottom line."

Alex Hormozi

Pro-tip: Steal as many little nuggets from big companies as you can. Sometimes, they move the needle with minimal effort. You don’t have to learn all the lessons yourself. For example, the Welcome Email for Startup Spells is inspired by a bigger newsletter. Took only 10 minutes to rewrite and the results are way better than before.

Now that you know about this strategy, you'll see it everywhere — from restaurant apps to e-commerce stores.

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You'll learn all the lessons in life once you become rich anyways.

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Rabbit Holes

  1. How Cognism Generated $441k in Revenue With Money Keywords - When doing SEO, forget everything else. Focus on money keywords to make money NOW. Go for broad keywords later on. Too many SEOs focus on the wrong metric called traffic. Unless you are selling advertising to increase brand awareness, traffic is the wrong metric to focus on.

  2. Marketing experiments that got our bootstrapped SaaS to $44,000 MRR - Great lessons on what worked vs what didn't. This is what it takes to get a phenomenal SaaS to a reasonable MRR. You can shorten the process via The Bullseye Framework by testing fast.

  3. How AI Grows My Linkedin - AI can grow your accounts even if you write motivational content. My #1 lesson of content creation is most people want motivational content than educational content. Educational content like Stratechery, Alex Hormozi, or Not Boring have a high IQ audience that you can monetize with high IQ play like VC Funds or Acquisitions. But if you want to grow big fast, you should go after motivational content. Motivational content is an emotional play that pierces on feelings while educational content is a thoughtful play that attacks the brain. And we all know, most humans work on feelings.

Until next time!

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More Startup Spells 🪄

  1. Alex Becker's 'TRT' Ads Framework (LINK)

  2. Social Engineering in Clubs (LINK)

  3. X Long Form for SEO (LINK)

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