Month: June 2022

Cal Wilson / June 8, 2022

The pressure for free shipping is hurting some businesses.

The rise of e-commerce in the past few years has resulted in some considerable industry changes. One of these changes is the growing expectation among consumers that online retailers provide free shipping at checkout. However, this isn’t always a plausible option for every business.   In this article, we take a look at free shipping, who can access it, and the consequences of the growing demand.  

Small package shipping is a growing industry.  

The pandemic changed the e-commerce and small package shipping landscape worldwide. Over 131 billion parcels shipped worldwide in 2020, a number that is supposed to surpass 266 billion by 2026.   This has created great growth for many businesses, alongside a huge labor demand, and ever-present supply chain issues. Likewise, it has added to the expectation for customers to have cheap or free shipping fees available to them at checkout.   In fact, as of 2021, 73% of consumers would rather get free shipping and wait longer to receive an order than pay for faster shipping. 

Shipping infrastructure is expanding.  

E-commerce’s popularity means that national infrastructure is changing to accommodate this consumer trend.   For example, according to logistics company Maersk, deliveries – depending on the shipper and the availability of their fulfillment centers – can reach 75% of the US population within 24 hours, and 95% within 48 hours.   Obviously those in more remote parts of Canada and the United States don’t see those same quick delivery times, but the reality nowadays is that the majority of North Americans can expect quick delivery on many goods.  

Is free shipping free? 

Free shipping is a perk many look for when making an online purchase. But, of course, nothing is really free. Free shipping just means that someone else is paying for the cost of delivering your order. And if you’re ordering from a small to medium sized business, that cost may be more than you think.   Dhruv Saxena, founder of ShipBob, spoke with CNBC on this issue, saying, “anyone can offer an Amazon Prime two-day shipping. It’s just the cost that…might incur in providing that service.”   According to Saxena, it would cost a business on average between $25-35 USD for a typical two-day shipping rate for a parcel. This is offset when large companies, such as Amazon, Etsy, or Walmart, generate mass online sales, and can achieve bulk shipping rates.   Unfortunately, larger companies’ access to bulk shipping rates and better speeds means there is consequential pressure on smaller businesses to provide the same service. In fact, as of 2019, three-quarters of independent retailers in the United States told the Institute for Local Self-Reliance that Amazon’s dominance is a “major threat to their survival.” 

Some businesses offer loyalty programs with free shipping as a perk.  

On top of bulk shipping rates, one way for businesses to offset the cost of free shipping is via customer loyalty programs. These programs tend to go a long way in terms of customer satisfaction, and often save customers money on individual transactions, but usually result in customers spending more money at a business overall.   As Harvard Business Review (HBR) explains, “the average Amazon Prime member spends more than twice as much as the average non-member. This may seem to imply that the program is responsible for a substantial increase in revenues, but the difference in spending could also be driven by self-selection (that is, customers who already intend to spend more may be more likely to choose to become members).”  Offering these loyalty programs isn’t cheap, especially when it comes to offering free shipping rates. HBR found that when brands offer loyalty programs, average basket sizes tend to go down, even if customers are shopping more frequently. Meaning, businesses are paying for free shipping more often, for separate, smaller orders.  

What can your business do to protect its bottom line and keep customers happy? 

Business is a balance of serving your customers while also keeping your bottom line in mind. So, when free shipping is in demand, how can your business find that balance?   There are several tactics you can employ to help better get bang for your buck with free shipping: 

• Restrict free shipping – consider limiting free shipping to only certain items or categories, specifically, products or product categories with sustained low shipping costs–for example, items with lower actual or dimensional weight.  

• Increasing product prices – this can be a risky move, but potentially worthwhile if you’re increasingly only to offset the price of free shipping. 
• Adjust free shipping thresholds – you don’t have to offer free shipping on every order, you can increase the minimum order value required to qualify for free shipping.  

For all of these solutions, find a sweet spot between offering a service your customers want, and being realistic about what you need in return.  

In conclusion… 

The rise of e-commerce has many of us accustomed to free shipping when online shopping. However, this can be a harder standard to achieve for small and medium businesses that don’t hit the same sales numbers as giants such as Amazon.   With free shipping continuing to rise in popularity, those smaller businesses must take steps to protect their bottom line while meeting customer satisfaction.

Cal Wilson / June 8, 2022

What’s the hold up on electric transportation?

In 2022 we’ve already experienced record-breaking gas prices and concerns about the growing cost of fuel. As the rest of the world pushes for the adoption of electric vehicles, North America seems to be behind the curve. In this article, we look at why this might be, and how the future of electric transportation might affect that.  

Electric vehicles around the world.  

Around the world, electric vehicles (EVs) are growing in popularity. In December of 2021, Europe saw the sales of EVs overtake the sale of diesel cars for the first time. China is experiencing similar growth in the EV industry.  

In the United States, growth is more stagnant. According to Wired, EVs “made up just 4 percent of vehicles sale last year. While the world falls in love with electric cars, the US is holding out.” 

Projections aren’t great, either. Bank of America forecasts that EVs will make up just 20% of the U.S. car market by 2030, rather than the nation’s public goal of 50%.  

EV adoption is pressing, but not simple.  

With the rising price of gas, and the reality that transportation is a huge contributor to greenhouse gas emissions, adopting electric vehicles sounds like a great solution. However, EV adoption has not proven as simple as it sounds.  

Some of the barriers include: 

• Social resistance, and reluctance to change from the familiarity of “fill up with gas and go” vehicles.  
• The price of individual electric vehicles – an electric Ford Focus, for example, is nearly twice the cost of a gas-powered one.  
• A lack of overall awareness among consumers regarding the strengths of EVs.  
• Lack of governmental enforcement regarding carbon emissions initiatives.  

• Lack of accessible charging point infrastructure across the country.  

Despite all these barriers, research has shown that Americans want electric vehicles, and would be more likely to adopt them quickly if they were more affordable. The reality is similar in Canada, with 71% of consumers saying they’d consider an EV for their next vehicle, but 90% feeling they still have to do more research to address their concerns. 

Cars aren’t the only transportation pushing towards electrification.  

While your business might not be able to afford purchasing electric company cars, what about a ticket on an electric plane for future business trips? Believe it or not, this reality might be sooner than you think.  

In fact, according to Afar, “ airlines like United and EasyJet are onboard as early adopters, with the first U.S. commercial routes slated for 2026.” 

Again, with electrified planes, the U.S. is slated to be a bit behind global electric leaders in regards to adoption. For example, Denmark and Sweden plan to make all domestic flights fossil fuel-free by 2030.  

What will flying electric be like? 

There are still some kinks to work out of electric planes. As Afar explains, “today’s batteries aren’t nearly as energy-dense as jet fuel, requiring bulk and weight that pose significant aerodynamic challenges.”  

What this means is, smaller batteries – suitable for shorter flights – shouldn’t pose much of an issue. Short domestic flights are very doable with electric planes. However, larger planes and longer routes will be more difficult, and farther away in the future.  

Even with just shorter flights being covered by electric planes, this has the potential to reduce fuel expenses and carbon emissions for the aviation industry significantly. Roughly half of the flight routes operated worldwide today are less than 500 miles. 

Electric fleets are a transnational conundrum.  

Like planes, long-haul trucks are another transportation sector headed in the direction of electrification. But how quickly and smoothly will that transition happen? 

In North America, that will entirely depend on transnational cooperation. Because so much of long-haul trucking involved crossing borders, there will need to be some uniformity between American and Canadian policy on electric trucks in order for it to be worth it for operations on both sides of the border.  

However, Canada plans to electrify all heavy-duty trucks by 2040.  

In conclusion… 

Despite its varying speed across the globe, electrification is inevitable. The events of 2022 so far have shown the difficulties of relying on fuel, despite the existing challenges that still remain in EV adoption. However, as the decade continues, we can expect to see more progress towards electrification.  

Related articles: 

• What will it take to implement electric fleets in urban areas? 
• Gas prices are climbing. What can your business expect to see reflected on its fuel bill? 
• Gas prices may be climbing, but gas stations aren’t seeing the profits.  

Cal Wilson / June 8, 2022

What is surcharging and should your business do it?

If you accept any kind of credit card payment, you may have heard of surcharging. It’s the practice of adding an additional charge to a customer’s purchase to cover the fees a payment processor requires for processing credit cards.

While it may seem like a win for you, the merchant, it’s not a completely problem-free practice.

In this article, we take a look at this practice. Should your business consider it? What are the pros and cons?

Why do some merchants surcharge?

Every time a customer swipes their Visa, Mastercard, American Express, or other kind of credit card, you incur a processing fee. These are called interchange fees. According to Quickbooks, the following variables impact a merchant’s interchange fees:

• The credit card company
• The type of card being used – i.e., whether it’s a rewards card, a business card, etc.
• How the transaction is processed – POS, over the phone, or online.
• The price of the product or service.
• The type of business of the merchant.
• Whether the transaction is domestic or international.

Likewise, rates change twice a year, in April and October.

Interchange fees are just one of the many fees merchants are charged to be able to accept credit card payments.

How does surcharging work?

Without surcharging, that fee lies squarely on the merchant.

If you’re looking to pass that expense onto the customer, you have two kinds of surcharging options; brand or product surcharging. Brand surcharging adds a charge every time a customer uses a card from a specific credit card provider; some merchants may add a surcharge, for example, on Visa purchases, but not Discover purchases. Surcharging on the product level, however, only adds surcharges on certain types of cards under a specific brand. Merchants may choose one option, but not both.

Surcharging is subject to different laws in different regions.

As you can imagine, in order to protect the consumer, surcharging is heavily regulated. In some places, it is not legal at all.

In fact, in the United States, surcharging is illegal in Connecticut, Maine, and Massachusetts. In Canada, service fees can only be added on certain kinds of transactions.

For the regions where surcharging is a legal practice, merchant are beholden to a surcharging cap. These vary by area, but often fall around 4%. The caps are put in place to prevent merchants from making profit from surcharges.

No matter where you are, if you surcharge, your business is subject to rules of disclosure. Merchants must disclose their intention to surcharge ahead of a transaction, and at multiple touchpoints while a customer is in the store. This includes such notices as a sign notifying the business’ surcharging practice at the store entrance, as well as at the point-of-sale. The surcharge dollar amount should also be clearly visible on the customer’s receipt.

While these practices keep surcharging ethical, they can also be off-putting to some customers, who only see the addition of a fee they might not completely understand.

Does surcharging save your business money?

There is no simple answer to this question. It can, but it depends on your business and your customers.

According to Evolve Payment, “[i]f your industry is a ‘race to the bottom’ where the lowest price wins, then surcharging is likely to hurt more than it helps. This is especially true in B2B industries with corporate contracts.”

For some businesses, adding fees like surcharges is going to be more common practice and expected by the customer. In other industries, it might hurt your chance of making a sale.

Fortunately, there are other strategies.

So your credit card processing fees are eating into your revenue, but you don’t think surcharging is the right move for your business. Not to worry – there are other things you can do to ease the expenses.

For example, instead of surcharging, many businesses offer cash discounting.  In this practice, merchants discount the price of purchase if the customer pays with anything other than a credit card. And, while surcharging isn’t legal continent-wide, cash discounting is.

Cash discounting is only possible if you have a certain amount of wiggle room on your markup pricing. However, when it is an option, it certainly is a bonus for customer experience.

Another tactic is setting a minimum for credit card payments. Depending on your rates, it may not be profitable to offer credit card payments under a certain dollar amount.

Another strategy is working to reduce your overall merchant services spend. Part of this is exploring what options are available to you among multiple vendors, knowing rates are fair, and how to negotiate for the best price. A cost reduction professional who specializes in merchant services might be your best asset if you take this route.

In conclusion…

As Evolve Payment says, “surcharging is, at the end of the day, passing business expenses onto your customers.”

While it has the potential of saving you money on your variable expenses, it’s not always a great strategy optically. Offering cash payment incentives, working to reduce your overall merchant services fees, and ensuring you’re paying the correct rates, are alternative strategies to reduce your spend while keeping customers happy

Related articles:

• Five Tips to Minimize Card Processing Expenses
• Merchants Using P2P Apps — Protect Yourself from Online Fraud

Cal Wilson / June 8, 2022

How to increase traffic to your business’ website.

In 2022, having an effective and attractive website to promote your business is an absolute must. However, you can create the most beautiful, legible website out there – but that doesn’t mean anyone is going to visit it.  

In this issue of the Pulse, we look at how you can increase traffic to your website, and hopefully turn that into low-cost customer acquisition.  

Know your target audience.  

Who do you want visiting your website? Who is the target demographic to buy your product? Before you begin developing a strategy to boost website traffic, it’s important to be able to answer these questions.  

You must be able to match your target demographic with a source, or sources, of internet traffic that makes sense. For example, a bakery might have better luck marketing on Instagram than on LinkedIn, but an accounting firm might have better luck on the latter than the former. Don’t waste time or money marketing on Tik Tok if your desired audience isn’t using that app.  

Finding out which source is going to be the best for your business is going to take a bit of industry and demographic research, but it should help narrow down your effort. There’s no need to stretch your resources too thin.  

Do you need to pay for ad campaigns? 

There is no easy answer to this. Ad campaigns might be an incredibly helpful source of traffic, or they might be an unnecessary expense.  

According to Hootsuite, for Business to Customer (B2C) businesses, “paid posts are the best way for brands to target new audiences on social media, and convert them to customers.” 

Likewise, Shopify says “with paid social media ads, you can create highly targeted campaigns that serve tailor-made ads to the customers who are most likely to click through and purchase your products.” 

Typically, ads are used to: 

• Raise brand awareness. 
• Promote newest deals, content, events, etc.  
• Generate leads. 
• Drive conversions.  

All of these purposes will likely increase your website traffic.  

Things to remember with paid campaigns.  

While paid content allows you to beat the algorithms of various social media platforms and reach a larger audience than you might organically, there are some drawbacks. Not only is it an added expense in your monthly budget, but they do also require some social media expertise to leverage their full potential.  

If possible, target users who have already shown an interest in your niche. Hootsuite recommends the “tried-and-true formula: target people who follow similar accounts… offer them a substantial discount, and direct them to a frictionless landing page.” 

Likewise, remember that not every post made on your business’ social media needs to be promotional. Too much is overdoing it on your wallet and your audience.  

Utilize free social media engagement.  

While you should absolutely avoid spamming the internet with links to your website, posting and engaging in conversation on social media – in a relevant, professional way – is a great way to generate traffic, and one that only costs soft hours.  

One of the nice things about this method of utilizing social media, compared to paid ads, is that it helps establish a relationship between your brand and your target demographic.  

Take, for example, a small retailer with an Instagram presence who makes products for dogs. Many users on Instagram have accounts for their dogs, and will tag the retailer in the posts where their dogs are wearing or using that product. By interacting with those posts, the retailer not only expanding their audience reach, but also reaffirming company values and creating a great customer service experience.  

Of course, this is all going to be dependent on your business and ideal customer – but there is certainly success to be had with this method.  

Build incentive with giveaways, sales, contests, etc.  

People love feeling like they’re getting a great deal. One way to garner more website traffic is to build excitement around your brand or your products by offering a time sensitive event. Whether that’s a giveaway, sale, contest, or discount code; something that drives prospective customers to visit your website and do it soon.  

If you’re feeling especially adventurous, and your products or services are suitable, you can even try influencer marketing.  

Deliver content that adds value for customers. 

Rather than focusing only on the hard sell, developing content that brings your audience informational value or solves problems while being professional and polished is a great way to bring in traffic.  

According to SEO expert Semrush, blogging is important for business sites because it can: 

• Increase your visibility organically in search engines. 
• Establish your business’ credibility as an industry leader and trusted resource.  

The same, or similar, can be said for video and podcast content.  

In conclusion… 

While this is by no means an exhaustive list, it shows that there are a lot of ways your business can leverage the internet to promote your website. And often, this can be done in inexpensive and organic ways.  

Cal Wilson / June 8, 2022

How to increase traffic to your business’ website.

Burnout, physical illness, and waves of employee resignations continue to be one of the major issues impacting employers in North America. As an employer, resilience needs to be a priority not only for your staff, but for yourself.  

In this issue of the Pulse, we take a look at resilience; what it is, and how you can promote it in your workplace.  

What is resilience? 

Resilience is essentially the ability to recover from adversity. How quickly and how well can you bounce back? Resilience doesn’t mean we aren’t hurt or don’t struggle – but that we can move through it and adjust over time.  

Psychologist Susan Kobasa says there are three elements essential to resilience: 

• Challenge – resilient people are more likely to view difficulty as a challenge, not as completely devastating. They take failures and mistakes as opportunities for growth instead of a negative reflection on their self-worth.  
• Commitment – resilient people can make commitments to goals, ambitions, relationships, causes, and other things they care about, and follow through on those commitments.  
• Personal control – resilient people spend time and energy on situations/aspects of their life that are within their control, rather than focusing on uncontrollable events. 

The past few years have certainly been a test of resilience for many of us, adjusting to new ways of living and likely significant changes at work.  

Resilience can be built.  

As explained by the American Psychological Association (APA), “resilience isn’t necessarily a personality trait that only some people possess. On the contrary, resilience involves behaviors, thoughts, and actions that anyone can learn and develop. The ability to learn resilience is one reason research has shown that resilience is ordinary, not extraordinary.” 

While it can be learned, it takes time and intent to do so – and it may just be a worthy effort to commit to if you find yourself struggling with different workplace or personal challenges.  

Resilience is a part of our mental health.  

Since our capacity for resilience isn’t fixed, it’s natural that our mental wellbeing will impact it. If you’ve ever felt like you just can’t weather things the way you used to, that’s normal. And it’s not necessarily always going to be that way, either. Sometimes, we’re in a great place to roll with the punches, and other times, the slightest gust can knock us over.  

This is because our resilience is connected to our mental health. This goes to say, if employers want their employees to be resilient and avoid burnout or illness through challenging times, they must prioritize their employees’ mental health.  

Action is necessary.  

While adopting a mental health-conscious mindset is good, action is also needed. In fact, there seems to be a disconnect between these two concepts.  

Data from 2021 found that 86% of employers see mental health, stress, and burnout as a top priority — yet only 25% have implemented a wellbeing strategy. 

So, whether you’re an employer in the process of developing a strategy or an employee in a workplace without a concrete plan in place to protect your mental health, working on building your own resilience may be necessary for your wellbeing and success.  

Strategies to build resilience.  

While this list is by no means exhaustive, it includes some helpful practices you can adopt to build your resilience: 

• Slow down – spend intentional time relaxing, working on your sleep routine, and practicing body and mind wellness activities like meditation or deep breathing.  
• Take care of your body – according to the APA, “stress is just as much physical as it is emotional. Promoting positive lifestyle factors like proper nutrition, ample sleep, hydration, and regular exercise can strengthen your body to adapt to stress and reduce the toll of emotions like anxiety or depression.” 
• Practice thought awareness – a key quality of resilient people is that they “don’t let negative thoughts derail their efforts.” Instead they have agency over their thoughts and are able to reframe them. These are the kinds of thoughts to be aware of: 
  • Permanent – thoughts that see the effects of bad events as permanent rather than temporary.  
  • Pervasive – thoughts that let setbacks or bad events affect other unrelated areas of life.  
  • Personalized – thoughts of self-blame or self-hate in relation to a difficulty or challenge experienced.  

• Learn from mistakes and failures – every time you fail, there is likely a lesson. Take the opportunity to learn and adjust your strategies, rather than internalizing the failure.   
• Choose your responses – practice strategies that allow you to react calmly and logically during challenging times. This isn’t inherent to everyone, but is a skill that can be worked on.  
• Maintain perspective – although a situation or crisis may seem overwhelming in the moment, part of resilience is having a proportional reaction to its long-term impact.  
• Set goals – setting smart, effective personal goals that align with your values can help you build successes and learn from your experiences.  
• Work on building your self confidence – according to Mind Tools, when you “develop confidence and a strong sense of self, you have the strength to keep moving forward, and to take the risks you need to get ahead.” 
• Focus on strong relationships – in the workplace as in all walks of life, those with strong connections that can survive stress find themselves happier and more resilient.  
• Join a group – you may need to look to a specific group outside of your regular activities to help build those connections. Whether hobby-based, faith-based, or around a common interest such as volunteering, these are all great ways to find and foster strong relationships.  
• Be flexible – rigidly adhering to plans and expectations can cause undue stress when those plans need to be amended or scrapped altogether.  

In conclusion… 

Resilience is needed to adjust to and overcome adversity in the workplace, or any walk of life. While resilience isn’t a fixed quality, and can be reflective of our mental health, it’s important to remember that there are steps and strategies we can take to improve it.