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If there\u2019s anything we know for sure about the impact of President Trump\u2019s tariffs thus far, it\u2019s that the very idea of them has been incredibly disruptive to businesses of all sizes. Perhaps even more than the tariffs themselves, the uncertainty around the scale, specifics and timing of these tariffs has caused business leaders to begin battening the hatches.<\/p>\n
For many companies, one of the easiest places to make quick budget cuts is in marketing, but history has repeatedly proven that cutting off advertising efforts during challenging economic periods can have a significant negative impact on a business \u2014 even after conditions improve. Going back as far as the Great Depression, there is evidence that the companies that are best able to weather economic storms and emerge stronger are ones like Kraft<\/strong> that actually increase their advertising efforts during downturns. \u00a0\u00a0\u00a0<\/p>\n \u201cWhen we need to pull in our drawstrings a little bit tighter, the marketing budget is always sitting there, and it seems easy, but reaccelerating once you\u2019ve cut marketing budgets for a long time is extremely painful and hard to do<\/strong>,\u201d said Alex Beller, Co-founder and President of SMS marketing platform PostScript in an interview with Retail TouchPoints<\/em>.<\/p>\n Beller\u2019s company serves more than 22,000<\/strong> Shopify-based ecommerce companies that range from large enterprises to small businesses, and he\u2019s been keeping his ear to the ground these past few months to find out how business leaders are reacting to the current situation. But beyond just listening, the company has decided to take action as well \u2014 PostScript has launched a <\/strong>Tariff Relief Fund<\/strong> that offers clients everything from subsidized marketing credits to free access to AI tools<\/strong> in order to help absorb some of the fallout rather than just stand by and watch.<\/p>\n \u201cAs [our clients] scramble to do what entrepreneurs do and problem solve, I\u2019m seeing people be really smart about how to try to distribute the pain,\u201d Beller said. \u201cThey\u2019re experimenting with price increases; they\u2019re trying to renegotiate terms with their manufacturers; they\u2019re maybe thinning out their team or marketing budget; they\u2019re trying to renegotiate with all their vendors \u2014 they\u2019re trying to pull every lever a little bit.<\/strong> But even still, it\u2019s an extremely disruptive thing, and they\u2019re starting to make business decisions that will have long-term outcomes.<\/p>\n \u201cSo because my partners and I believe that there is likely a ton of pain coming for the ecommerce industry, we wanted to be proactive about absorbing our fair share of that pain<\/strong> \u2014 we think everyone\u2019s going to have to, all the players in the ecosystem are going to have to absorb some of it,\u201d Beller added. \u201cSome of it is going to get passed on to the consumer, some is going to get passed on to partners and vendors, so we wanted to be proactive and stay connected to the market. If you\u2019re an apparel brand that uses PostScript, your cost of goods potentially just went up by 150%<\/strong> \u2014 you\u2019re going to need all your partners to chip in.\u201d<\/p>\n Not surprisingly, PostScript is already getting a lot of positive feedback from its clients in response to the Relief Fund. What has been surprising to Beller, though, is that more solution providers aren\u2019t doing the same: \u201cI thought that everyone in the industry would do something like this, because the ecommerce ecosystem is very community oriented,\u201d he said. \u201cI have been surprised by the silence from the really big, really profitable players \u2014 it\u2019s been deafening.<\/strong>\u201d<\/p>\n It\u2019s true that SaaS (solution as a service) businesses like PostScript aren\u2019t directly impacted by the tariffs, but the trickle-down effect for third-party vendors has the potential to be dramatic \u2014 as companies pull back on spending, third-party contracts are often the first to go.<\/p>\n Beller is the first to admit that it will be nigh on impossible for an \u201cSMS vendor to save <\/em>anyone\u2019s business, but it is a big line item of cost for brands, so we identified three<\/strong> problems we can solve to help contribute.\u201d<\/p>\n \u201cThis is a decent chunk of change out of our pocket, and we\u2019re an unprofitable SaaS business,\u201d admitted Beller, \u201cbut we just felt like [cutbacks were] coming and we wanted to do it on our terms, versus waiting for customers to ask.<\/strong> We\u2019re viewing this as a short- to medium-term hit. Our optimistic hope is that, by doing this, maybe more people will move to PostScript than would have otherwise and take advantage of things like our AI products. Then, if people see good results from that stuff, maybe in the long term we end up seeing some payback.\u201d<\/p>\n<\/p><\/div>\n<\/p><\/div>\nEnter the PostScript Tariff Relief Fund<\/strong><\/h2>\n
How SaaS Vendors can Help Their Retail Clients<\/strong><\/h2>\n
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