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Are you stepping over dollars to pick up pennies?

Progressive Cattleman Editor Cassidy Woolsey Published on 24 October 2018

The summer before my first semester of college, I took a job as a cashier at a mountain resort convenience store. Nestled in the Utah mountains, the winding roads and mountain air attracted cyclists like mosquitoes to a stagnant water trough.

It wasn’t unusual to have groups of 10 to 15 cyclists stopping at our small store, especially when it came to major holidays. Clomping around the aisles in their cleats, the cyclists never purchased much more than a drink and a candy bar. But any time a transaction was made under $5, a card surcharge was issued.

Understandably, this made many cyclists’ already red faces turn redder and would usually cause a grumble to slip from me when a soggy $5 bill was placed on my palm. While most of the store’s business stemmed from thirsty cyclists, cavity-prone kids and snacky passersby, the processing fee was often an inconvenience, and many left the store empty handed.

In small businesses, every dollar counts. Some processing fees can be as high as 5 percent, meaning a loss of $5 for every $100 a customer charges. Sure, it might have cost a little more to run a credit card, but did those pennies saved equate the potential dollars that walked out the door?

The real point of sharing this story with you is to get you thinking: Do you ever step over dollars to pick up pennies in your business? Maybe a general example of this would be purchasing bulls. What if spending $1,000 more on something with real genetic value could mean value-added premiums on his offspring at sale day?

Or what if the improved genetics would simply attract new buyers? Would that initial cost sting if you knew you could get it back – and maybe even more?

Another area worth contemplating is the topic of traceability and animal ID. The industry is constantly reminded about the need for transparency, but the cost to implement such a practice would be pricey, especially at the cow-calf level. RFID tags would be needed for each animal; the necessary scanning equipment and, of course, the required administrative costs would be among the expenses incurred.

In this issue, we explore a ringleader in traceability: blockchain. While it’s still early, this technology that tracks where and between whom a transaction or action has occurred, is proving to be a payoff for its early adopters. It might be wise to look into new opportunities such as blockchain and push a pencil on its economics.

Blockchain technology, drones, wireless camera systems and other technologies featured in this issue might not be practical in every operation but, for some, one of these advancements just might be the tool that springboards their efficiency.

Don’t let the initial cost of something be the roadblock to added revenue down the road. It’s at least worth some thought.  end mark

Cassidy Woolsey
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