PayPal recognizes Fargo as e-commerce hub; does North Dakota?

Last week, Pay Pal named Fargo the fastest growing city for small and medium online markets in the U.S.

But for some local e-commerce leaders, it’s not Pay Pal they want recognition from – it’s North Dakota.

“Here’s a chance for us to pull revenue in to North Dakota with no limitations as to population,” said Clint Howitz, founder and “Pack Leader” of local e-commerce company dogIDs. “I wish the state would realize that.”

Howitz

Howitz has been running dogIDs, which sells personalized dog collars online, for 10 years. This year they’re projecting 60,000 orders nationally and internationally, Howitz said. He was not surprised to hear that Fargo topped Pay Pal’s list.

“Just last night I met someone else doing e-commerce for lightbulbs,” he said. “There’s more e-commerce businesses here than we even realize.”

The list ranks cities according to Pay Pal’s Year over Year (YoY) Total Payment Volume (TPV) as of May 2015.

“Not only popular as the setting for the hit movie and television series, Fargo tops our list of markets for SMB (small and medium business) growth,” writes Pay Pal’s Katie Ochieano, in a Nov. 12 article titled “The Great E-commerce Boom Comes to the Midwest.”

Brick and mortar: “It’s over.”

But instead of support coming from North Dakota, Howitz sees efforts that could stunt the growth of statewide e-commerce, he said. A bill like the Marketplace Fairness Act, for example, would require online retailers to collect sales tax at the time of a transaction. This would severely hurt smaller e-commerce businesses in North Dakota, he said.

“North Dakota policy is not supportive of the e-commerce industry,” he said. “Senator Heitkamp and Hoeven don’t see the value in supporting small e-commerce startups, and the potential that has in bringing revenue into the state.”

Senator Heitkamp is a co-sponsor of the latest version of the Marketplace Fairness Act, according to the Forum. She hopes to use the bill to support mom-and-pop, “Main Street” shops, she said.

“Leveling the playing field for our brick-and-mortars across North Dakota has been a top priority for me since I served as tax commissioner in the early ’90s,” Heitkamp said, on record.

Photo by icsc.

Photo by icsc.

Kirk Anton, CEO and founder of e-commerce site Heat Transfer Warehouse, sees this view as outdated.

“They still think they’re protecting the brick and mortar stores,” Anton said. “But, it’s over.”

Ripe for Growth

Howitz said another part of the problem in North Dakota is people’ aren’t aware of the e-commerce industry.

“It seems like there’s not a lot of people in Fargo that know what e-commerce is,” Howitz said. “Whereas in other parts of the country they are much more aware. I don’t know why that is.”

This not only affects the support the e-commerce industry gets, but also makes it difficult when attracting talent, Howitz said.

“We always joke that we could move to Austin, because then people would get what we were talking about,” he said.

“At times it would be fun to have someone who gets it,” Anton said.E-Commerce Breakfast

To that end, Anton organizes a monthly E-commerce breakfast that brings together leaders in the e-commerce industry to ask questions and discuss policy. The meet-up has been growing successfully for 2 years, he said.

Where they see progress for local e-commerce, is Midcontinent’s announcement to bring high-speed fiber internet to North Dakota, Anton said.

“We’re ripe to become a great place for e-commerce,” he said.

But if Fargo wants to stay top of PayPal’s fastest growing e-commerce market list, they will have to create more incentives for companies to start in Fargo, Howitz said.

“That’s what I’m after – how can we attract small companies when they’re looking for a place to start?” Howitz said. “How can we let people know that Fargo is a great community to live in, and to start a business?”

Photos courtesy if ISCS and Marisa Jackels. Graphic by Bri Lee.

Marisa Jackels