The Green Sheet Online Edition

January 14, 2008 • Issue 08:01:01

Street Smarts^SM

Winter profit-land

By Dee Karawadra
Impact PaySystem

While spending the Christmas holiday in Maine, I became very familiar with what I call winter merchants. Given how winter is often a bleak time for residuals (excluding those generated by retailers catering to holiday shoppers), I was reminded of the surge in activity arctic blasts bring to some businesses. From snow ploughs to heating oil, the weather creates a need for unique services.

My father-in-law arranged a sleigh ride for the family. As I glided through the snow with my in-laws, my thoughts drifted to how winter merchants can increase transaction volume when the thermometer plummets. (I also wondered if the sleigh business we were using accepted credit cards; visions of money danced in my head until a snowball brought me back to reality.)

Winter merchants are often overlooked and even passed by intentionally by some merchant level salespeople. For example, one of our agents called, wondering why his residuals took a nosedive in November.

When we looked at his book of business, we realized it consisted entirely of restaurants in one geographical area. He had no diversity whatsoever in his portfolio. So when it got cold and people didn't feel like braving the weather to dine out, he was stuck eating canned ravioli.

I never pass up a winter merchant. They are like rain in the jungle: not much all year, but when it rains it pours. And by adding diversity to portfolios, they can prevent large fluctuations in residuals.

Hot cold-leads

Generally, winter merchants have to capitalize within a few months, as their busy season is very short. The following businesses are a good place to start prospecting:

• Ski slope operators or resorts: A ski resort does not have to be huge; the North is full of small, family-owned ski establishments.

• Ski shops: These are the retail world for people who love winter sports; you've got to buy skis and stylish accessories somewhere.

• Ski towns: Find a town that has a ski slope, and hit up all its specialty shops. They tend to do great in the winter due to traffic from skiers.

• Heating oil companies: These are unusual merchants with exceptional volume in the winter months. Homes are chilly, and oil is used widely for heating.

• Tire shops: New tires help people get through that snow and ice; specialty tires with winter studs are a huge seller in the North.

• Carwashes: Cold weather brings snow and ice, which means salt and sand are generously applied to the roads. This causes a big mess as well as corrosion on cars. I was amazed to see so many Northerners washing their cars in frigid weather.

• Snow removal: This is a huge business in the North. I would get in good with the "plough man" and set him up as a seasonal business. He will see the rewards of accepting credit cards, including customers requesting more frequent service.

• Bed-and-breakfasts: I can't tell you how many bed-and-breakfasts I saw sporting No Vacancy signs. This is a booming business in the winter. And don't forget the thriving restaurants right next to all the busy little inns.

• Hot-spot regions: For those who have no idea what heating oil is (Southerners), there are a lot of "snow birds" who migrate to balmy climes when times get cold. The locales they prefer have all manner of retail and specialty shops, including nail salons, that visitors like to frequent.

Many more possibilities exist, and each area has its own niches. The important thing is not to pass by these merchants. Their volume will benefit you greatly and add some consistent value to your portfolio. At the end of the day, you will have a thriving business with consistent revenue throughout the year.

Chilly stickiness

One of our merchants in Maine is a family-run ski slope that I decided to visit over the holiday. I thought this would be a good time to frequent my customer's business and take a ski lesson.

I did learn a few good lessons from this business owner (skiing was not one of them). He told me he was very pleased with the new terminal that he purchased from my agent and that our service was great. He also said that by adding a faster terminal, he was able to get his customers through the line faster and happier. He also asked me about putting an ATM in his business.

I was excited that our service allowed him to better his business. Plus, he is now thinking outside the box. My agent not only has a loyal merchant to help him through the winter, he now can diversify even more by adding an ATM in the product mix. Once you start thinking about winter merchants, your ideas should snowball. Offer your merchants seasonal set-up (closing them down in the off season, and turning them on in the busy season).

I hope this article gets you to take action to diversify your portfolio. It may even mean that you need to add some new partners to your business so that you can accommodate merchants outside of your norm.

Next winter I hope you're sitting in front of a warm fire with a cup of hot cider, reaping the benefits of a diversified portfolio.

Dee Karawadra is the founder, Chief Executive Officer and President of Impact PaySystem, based in Memphis, Tenn. He and his team have a wealth of knowledge on the merchant services industry, with a niche in the petroleum market. Dee's experience on the street as an agent has guided him in laying a foundation for an agent program that is both straightforward and lucrative for his agents. Contact him at 877-251-0778 or dee@impactpaysystem.com.

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