As you know from the dot.com debacle in the late 1990s, starting an Internet business is no guarantee of success. Internet business failures happen, but often for obvious reasons.
Why Internet Businesses Crash and Burn
Internet business simply refers to an online business devoted to profits through the sale of products and services. In the real world, a majority of small business startups fail because they get overwhelmed with overhead expenses. On the net, this is less of a problem if you can do any of the work yourself, such as building pages for your site. Even if you can’t, most sites do not fail because of expenses. There are plenty of other reasons.
Internet business failures almost always have a common denominator. The issue involves traffic. On the net, traffic refers to the number of visitors a site gets. Most Internet businesses fail to properly research whether there is enough traffic for their area of business before building out their site. The first step is always to research whether people are actually searching for your business. You can look under the keyword category in our article section to learn more.
The second area where Internet business failures occur involves ignoring the keywords in question. Once you have a keyword list, you must focus on it. The list is telling you what your prospects are searching for and you must make it your mission to supply them with the products or services. If you do not provide the services or products indicated by certain keywords, take steps to make it happen. If you give prospects what they want, they will return to your site over and over again. Return visitors are the key to making profits.
Many Internet business failures occur because sites bite off more than they can choose. The temptation is to go for the broadest subject matter possible. This is a mistake. You should focus on a niche. If you want to open an online bookstore, you will never be able to compete with Amazon. Amazon simply has far too big of a head start. If you focus on books devoted just to a certain subject, such as Eastern philosophy or home improvement, you have a good chance of making a profit. This can occur because fans of the niche will come to your site instead of Amazon since you focus entirely on the niche in question.
Internet business failures occur because people simply do not take the time to property research the situation before jumping in with both feet. Take your time and full understand your market and what you are getting into. If you are patient and thorough, you will not become one of the Internet business failures dotting the net.
Thursday, July 13, 2006
How relevant is your Ecommerce Web Site Design?
Ecommerce web site design can spell either success or doom for any business. In this internet age it is imperative to have an online site for advertising, selling or buying a product or service. There are numerous ecommerce websites doing business on the World Wide Web. Your website’s ecommerce design must be relevant to all the different elements needed for designing a good website.
If you want to add a personal touch to your site, you can design your own site. However you can also get professional help from the numerous website designing companies to get your online business site designed. Select a good web design company which has high credibility to design your ecommerce web site.
The purpose of any ecommerce site is to generate business for a product or to promote a service. Ecommerce web site designing is not an easy task and is not done overnight. There are some basic simple rules which you need to follow to make a good website. First of all ensure that your website is compatible to different types of browser and operating systems.
The purpose of an ecommerce site is to generate business leads, and if online surfers using different browsers and operating systems cannot even view your site properly, you will lose out on a significant number of prospective clients. Think about this aspect before you actually go about designing a website.
It is said that pictures have the ability to communicate messages which sometimes even words fail to say. Pictures have a very strong ability to portray strong emotions. Silence they say is sometimes stronger than words. Put up relevant pictures on your site to put forward an idea. Take care that you do not put up any irrelevant and outdated pictures on your website.
Color combination of a website is very important. Choose the color to be used in your ecommerce web site design only after a very careful consideration. Colors in an ecommerce site must not be garish and at the same time must not be too dull, so that it does not even invoke any response from visitors to your site. Choose a color pattern which is appealing to the eye, but at the same time refrain from going over the top.
The navigability and the functionality of ecommerce web site design are of big importance. Your site may be the best visually looking site ever made, but if it does not have proper functionality and navigability, no one is even going to give your site a second glance. No visitor is going to wait and search for information in your site if it is not properly navigable and functional.
Take care of the contents in your ecommerce web site design. Good and relevant content is a great means of bringing visitors to your site. Check out for yourself and see if the content in your site is relevant of not. Also see if all the links are properly placed or not and whether visitors are immediately transferred to the page that has the relevant information for their query.
Make your best effort in satisfying the visitor to your site. Consider yourself as a visitor to a site and think what all things you would want to see in a site. Users are the king in determining if a website will work or not. Take care of the user and try to satisfy his or her needs in your ecommerce web site design.
If you want to add a personal touch to your site, you can design your own site. However you can also get professional help from the numerous website designing companies to get your online business site designed. Select a good web design company which has high credibility to design your ecommerce web site.
The purpose of any ecommerce site is to generate business for a product or to promote a service. Ecommerce web site designing is not an easy task and is not done overnight. There are some basic simple rules which you need to follow to make a good website. First of all ensure that your website is compatible to different types of browser and operating systems.
The purpose of an ecommerce site is to generate business leads, and if online surfers using different browsers and operating systems cannot even view your site properly, you will lose out on a significant number of prospective clients. Think about this aspect before you actually go about designing a website.
It is said that pictures have the ability to communicate messages which sometimes even words fail to say. Pictures have a very strong ability to portray strong emotions. Silence they say is sometimes stronger than words. Put up relevant pictures on your site to put forward an idea. Take care that you do not put up any irrelevant and outdated pictures on your website.
Color combination of a website is very important. Choose the color to be used in your ecommerce web site design only after a very careful consideration. Colors in an ecommerce site must not be garish and at the same time must not be too dull, so that it does not even invoke any response from visitors to your site. Choose a color pattern which is appealing to the eye, but at the same time refrain from going over the top.
The navigability and the functionality of ecommerce web site design are of big importance. Your site may be the best visually looking site ever made, but if it does not have proper functionality and navigability, no one is even going to give your site a second glance. No visitor is going to wait and search for information in your site if it is not properly navigable and functional.
Take care of the contents in your ecommerce web site design. Good and relevant content is a great means of bringing visitors to your site. Check out for yourself and see if the content in your site is relevant of not. Also see if all the links are properly placed or not and whether visitors are immediately transferred to the page that has the relevant information for their query.
Make your best effort in satisfying the visitor to your site. Consider yourself as a visitor to a site and think what all things you would want to see in a site. Users are the king in determining if a website will work or not. Take care of the user and try to satisfy his or her needs in your ecommerce web site design.
How to Create a Money Magnet E-commerce Web Site
If you've been online for more than a day you've probably heard some "guru" somewhere recommend that you create a Money Magnet Web Site - a site that is highly automated and helps you make money 24 hours a day. While that might *sound* great, what they often forget to tell you is HOW to do that.
Well, I'm going to tell you right now, in this article!
First, what IS a Money Magnet Web Site? A Money Magnet Web Site can be defined as one that is equipped with an integrated suite of both e-commerce and internet marketing tools in a fashion that will allow you to be the most profitable with the least amount of effort.
Most e-commerce systems are equipped with the following essentials: a shopping cart, acceptance and processing of credit cards, a maintenance system that allows you to add/change products, an order-retrieval system that enables you to fulfill orders.
However, what most of them are lacking are marketing tools. There are several marketing strategies that are essential in the creation of a successful e-commerce web site: email marketing (broadcasting) of prospects/customers, effective use of autoresponders (generate automatic email messages), online newsletter, online form/survey to capture your prospect's email address electronic product delivery (if you sold a digital product), advertisement (ad) tracking, back end sales, affiliate program.
Now, if you had a system that would support the integration of ALL of these marketing tools in addition to the necessary e-commerce essentials, then you would have a Money Magnet Web Site. After all, it has been shown that it often takes 7 or more ad exposures before prospective customers actually make a purchase. Consider the following scenario:
A prospect clicks on an advertisement in an online magazine. This action increments a counter for this particular ad to help you determine how well it’s working. They don’t decide to buy as of yet but join your newsletter. They are now considered a prospect. You begin to send them a monthly email newsletter. Additionally, an autoresponder kicks in to thank them for joining the newsletter as well as scheduling them to get email twice a month for the next 90 days reiterating your product benefits and inviting them to purchase.
Upon sending them one of your "juicy" offers that they couldn't refuse, they finally purchase. They will automatically be removed from your prospect list and added to your customer list.
Based on the particular product or service they’ve purchased, they will receive a series of emails every two weeks for the next 6 months offering complementary products. This will be the engine that will drive your back end sales and keep your customers coming back to your web site.
Being able to play out a scenario such as this using one integrated system would be pretty impressive don’t you think? The internet big boys do this with expensive e-commerce platform suites produced by vendors such as IBM, Microsoft and Oracle. Having your system automatically perform these follow up tasks frees you up to spend more time on your business, your health or your family!
=====> What can you do to obtain a money magnet web site?
Fortunately, there are ways that you can automate your website in much the same way that the big boys do. The best and most cost-effective way would be to sign up with one of the handful of Application Service Providers available on the internet, which provide a shopping cart integrated with a full suite of marketing tools. Normally, the shopping cart and tools are very flexible and can be incorporated into any website.
=====> Are there any other ways to automate your business besides working with a total solution provider?
You can accomplish some level of automation without an integrated shopping cart system, however, it will require manual intervention and of course it would be incomplete. I believe that the most important asset of your e-commerce business is your email lists. Therefore, concentrate on the implementation of a good autoresponder/list server system to "enhance" your present e-commerce website. There are several good ones on the
market.
Look for providers that allow you to: create multiple lists, add prospects via a web form, email, or manually through a management console, send out an unlimited number of autoresponder messages, send out an unlimited number of email broadcasts, set up and distribute a newsletter.
When setting up your autoresponder system, create one list for your "prospects" and another one for your "customers". Now, here's where you come in: when a person orders your product, you will have to perform the extra task of logging into your autoresponder system and manually remove them from the prospect list and add them to the customer list. This action will then trigger your customer autoresponder series of messages to be sent.
Remember, the key to building a successful e-commerce web site is to automate your marketing engine as much as possible and drive your prospects and customers back to your web site. This will certainly create a money magnet e-commerce web site for you!
Well, I'm going to tell you right now, in this article!
First, what IS a Money Magnet Web Site? A Money Magnet Web Site can be defined as one that is equipped with an integrated suite of both e-commerce and internet marketing tools in a fashion that will allow you to be the most profitable with the least amount of effort.
Most e-commerce systems are equipped with the following essentials: a shopping cart, acceptance and processing of credit cards, a maintenance system that allows you to add/change products, an order-retrieval system that enables you to fulfill orders.
However, what most of them are lacking are marketing tools. There are several marketing strategies that are essential in the creation of a successful e-commerce web site: email marketing (broadcasting) of prospects/customers, effective use of autoresponders (generate automatic email messages), online newsletter, online form/survey to capture your prospect's email address electronic product delivery (if you sold a digital product), advertisement (ad) tracking, back end sales, affiliate program.
Now, if you had a system that would support the integration of ALL of these marketing tools in addition to the necessary e-commerce essentials, then you would have a Money Magnet Web Site. After all, it has been shown that it often takes 7 or more ad exposures before prospective customers actually make a purchase. Consider the following scenario:
A prospect clicks on an advertisement in an online magazine. This action increments a counter for this particular ad to help you determine how well it’s working. They don’t decide to buy as of yet but join your newsletter. They are now considered a prospect. You begin to send them a monthly email newsletter. Additionally, an autoresponder kicks in to thank them for joining the newsletter as well as scheduling them to get email twice a month for the next 90 days reiterating your product benefits and inviting them to purchase.
Upon sending them one of your "juicy" offers that they couldn't refuse, they finally purchase. They will automatically be removed from your prospect list and added to your customer list.
Based on the particular product or service they’ve purchased, they will receive a series of emails every two weeks for the next 6 months offering complementary products. This will be the engine that will drive your back end sales and keep your customers coming back to your web site.
Being able to play out a scenario such as this using one integrated system would be pretty impressive don’t you think? The internet big boys do this with expensive e-commerce platform suites produced by vendors such as IBM, Microsoft and Oracle. Having your system automatically perform these follow up tasks frees you up to spend more time on your business, your health or your family!
=====> What can you do to obtain a money magnet web site?
Fortunately, there are ways that you can automate your website in much the same way that the big boys do. The best and most cost-effective way would be to sign up with one of the handful of Application Service Providers available on the internet, which provide a shopping cart integrated with a full suite of marketing tools. Normally, the shopping cart and tools are very flexible and can be incorporated into any website.
=====> Are there any other ways to automate your business besides working with a total solution provider?
You can accomplish some level of automation without an integrated shopping cart system, however, it will require manual intervention and of course it would be incomplete. I believe that the most important asset of your e-commerce business is your email lists. Therefore, concentrate on the implementation of a good autoresponder/list server system to "enhance" your present e-commerce website. There are several good ones on the
market.
Look for providers that allow you to: create multiple lists, add prospects via a web form, email, or manually through a management console, send out an unlimited number of autoresponder messages, send out an unlimited number of email broadcasts, set up and distribute a newsletter.
When setting up your autoresponder system, create one list for your "prospects" and another one for your "customers". Now, here's where you come in: when a person orders your product, you will have to perform the extra task of logging into your autoresponder system and manually remove them from the prospect list and add them to the customer list. This action will then trigger your customer autoresponder series of messages to be sent.
Remember, the key to building a successful e-commerce web site is to automate your marketing engine as much as possible and drive your prospects and customers back to your web site. This will certainly create a money magnet e-commerce web site for you!
Tuesday, July 11, 2006
What Makes A Successful E-Commerce Website
There are many ways to create a successful e-commerce but there are four crucial points that you should keep in mind while launching your website.
1. Website
Your website is like your showroom, airy and attractive. When online, the equivalent of a showroom is an uncluttered website where the eyes can move freely up and down finding the details they need without much effort. It is extremely important that the website be easy to navigate since the surfer should not have to search for the product or details he or she is looking for. The website should project its products in a provocative way so the surfer wants to see more.
Place testimonials or photos of your product so people can create a positive image of its usage. If your products are guaranteed, post this information conspicuously.
2. Your merchant account
This feature is a must for any commercial website because without it you will not be able to receive payment by credit cards. Reports show that as high as 99 percent of the trade online is done through credit cards. Hence, if you do not have a merchant account you lose business. You will need to be able to accept all major credit cards and without this feature that is not possible.
3. Shopping cart and secure server
This is interconnected with the above. When you have a merchant account to accept credit cards, you will need an online shopping cart. This feature allows your customers to choose and place their chosen products in the cart just as one would do in shopping mall. This cart will, at the end of the shopping, total the products and give the total cost of the products chosen.
In order to have your shopping cart work well you need to have its software installed on your website or on the server that hosts your website. If you choose to have your own server you will need to have a certificate from Verisign and Thawrte, which encrypts the financial information given by your customers so they can feel safe while giving you this sensitive information.
4. Payment gateway
This is another crucial aspect in setting up a successful e-commerce website. The payment gateway is the link from your website to the credit card processor. This gateway helps information to pass from your site to the authorization centre where the credit card is verified and then charged; after that the reply will come back to your website that the processing has been successful. A payment gateway will always check for details in credit card information and reject any discrepancy in the information. In this way it reduces the use of fraudulent cards by almost 80 percent.
1. Website
Your website is like your showroom, airy and attractive. When online, the equivalent of a showroom is an uncluttered website where the eyes can move freely up and down finding the details they need without much effort. It is extremely important that the website be easy to navigate since the surfer should not have to search for the product or details he or she is looking for. The website should project its products in a provocative way so the surfer wants to see more.
Place testimonials or photos of your product so people can create a positive image of its usage. If your products are guaranteed, post this information conspicuously.
2. Your merchant account
This feature is a must for any commercial website because without it you will not be able to receive payment by credit cards. Reports show that as high as 99 percent of the trade online is done through credit cards. Hence, if you do not have a merchant account you lose business. You will need to be able to accept all major credit cards and without this feature that is not possible.
3. Shopping cart and secure server
This is interconnected with the above. When you have a merchant account to accept credit cards, you will need an online shopping cart. This feature allows your customers to choose and place their chosen products in the cart just as one would do in shopping mall. This cart will, at the end of the shopping, total the products and give the total cost of the products chosen.
In order to have your shopping cart work well you need to have its software installed on your website or on the server that hosts your website. If you choose to have your own server you will need to have a certificate from Verisign and Thawrte, which encrypts the financial information given by your customers so they can feel safe while giving you this sensitive information.
4. Payment gateway
This is another crucial aspect in setting up a successful e-commerce website. The payment gateway is the link from your website to the credit card processor. This gateway helps information to pass from your site to the authorization centre where the credit card is verified and then charged; after that the reply will come back to your website that the processing has been successful. A payment gateway will always check for details in credit card information and reject any discrepancy in the information. In this way it reduces the use of fraudulent cards by almost 80 percent.
Online Turnkey Sites – Good and Bad
You have decided to open a site online, but are not sure where to start. This brings us to the subject of the online turnkey sites.
Online Turnkey Sites – Good and Bad
An online turnkey site comes in a couple of variations. All of them are designed to give you a base to work off for your ecommerce efforts. The idea is to create the fundamentals of a site and then let you go to town with it. Depending on the platform, using one of these platforms can be a good or bad move.
Let me save you a ton of money from the outset. If you are considering an online turnkey site that is fully contained, to wit, it gives you a site, domain and products to sell, you are going to have a very difficult time making money. There are a couple of reasons for this. First, your site is no different than all the other turnkey sites sold by the same company. Why would prospects come to your site instead of any of the others? Simply put, there is no way to make your site standout. Further, your marketing will be a major pain. Many pay-per-click search engines will not let you list the site because they only allow one listing per affiliate program and they will consider a turnkey site as one. Further, you will have difficulties pursuing any search engine rankings because you will have little ability to change the site. I strongly encourage you to avoid these online turnkey sites like the plague.
There are online site builders that work fine. These services essentially give you the ability to control the design of your site, and require you to have a domain as well as your own products and services. On the high end, you can find massively flexible page builders with databases tied in covering everything from customer service management to inventory tracking. Most can also be customized to your particular needs.
This second set of platforms, known as online site builders, are really the way to go. The days of learning and hammering out html code for pages has gone the way of the horse and buggy. The online site builders give you convenience, flexibility and control over your online venture. This allows you to manipulate the site as you gain a better understanding of your market and all things Internet. Minor elements of html coding are still needed, but nothing that will set you back or be confusing.
An online turnkey site sounds like a great thing at first blush, but it can cost you in the long run. Make sure you understand what you can and cannot do before committing to a system.
Online Turnkey Sites – Good and Bad
An online turnkey site comes in a couple of variations. All of them are designed to give you a base to work off for your ecommerce efforts. The idea is to create the fundamentals of a site and then let you go to town with it. Depending on the platform, using one of these platforms can be a good or bad move.
Let me save you a ton of money from the outset. If you are considering an online turnkey site that is fully contained, to wit, it gives you a site, domain and products to sell, you are going to have a very difficult time making money. There are a couple of reasons for this. First, your site is no different than all the other turnkey sites sold by the same company. Why would prospects come to your site instead of any of the others? Simply put, there is no way to make your site standout. Further, your marketing will be a major pain. Many pay-per-click search engines will not let you list the site because they only allow one listing per affiliate program and they will consider a turnkey site as one. Further, you will have difficulties pursuing any search engine rankings because you will have little ability to change the site. I strongly encourage you to avoid these online turnkey sites like the plague.
There are online site builders that work fine. These services essentially give you the ability to control the design of your site, and require you to have a domain as well as your own products and services. On the high end, you can find massively flexible page builders with databases tied in covering everything from customer service management to inventory tracking. Most can also be customized to your particular needs.
This second set of platforms, known as online site builders, are really the way to go. The days of learning and hammering out html code for pages has gone the way of the horse and buggy. The online site builders give you convenience, flexibility and control over your online venture. This allows you to manipulate the site as you gain a better understanding of your market and all things Internet. Minor elements of html coding are still needed, but nothing that will set you back or be confusing.
An online turnkey site sounds like a great thing at first blush, but it can cost you in the long run. Make sure you understand what you can and cannot do before committing to a system.
Ecommerce Website Owners: Are You Leaving Money On The Counter?
Own an ecommerce website? Do you have a mailing list?
If not, you’re potentially leaving a lot of money on the counter.
Keeping in touch with your past customers and visitors, is one of the easiest and cost effective methods of increasing your website sales. You simply must have a mechanism to collect the email addresses of both buyers and browsers alike.
Collecting buyers email addresses is a ”no brainer” – after all you need to send them confirmation details, receipts etc. Just make sure you ask their permission to keep them up to date on future special offers.
Collecting visitor details is a bit trickier, and you must offer some kind of incentive in return for them handing over their valuable email address. Here are several ways:
· A discount voucher off their first order
The amount you are prepared to offer will depend on the profit margin in your business, and the drawback is you may only get the email addresses of people who were going to purchase anyway.
· A competition to win one of your products.
Do make sure you are honest and pick a winner – put past winner details on your site to emphasise this
· An insiders buyers guide
If you offer technical products that can be tricky to understand – such as electronics, audio-visual etc, then write a short guide
· Special reports or tips guides
If you sell golf equipment, search for articles on golf tips online, obtain the authors permission and compile them into a PDF report.
Managing your list
Depending on what ecommerce system your website is based on, you may already have the ability to manage email lists. If not, use a list management service such as Aweber (www.aweber.com), which allows you to set up autoresponder sequences, multiple lists and send HTML emails.
Which brings me nicely to the next *must* . . . send HTML emails!
HTML emails are the ones full of images and graphics, rather like webpages as opposed to plain text emails.
Why? They are far more eyecatching, which is essential given the increasing amounts of email we get every day. You stand a better chance if you include images of your products – after all a picture is worth a thousand words, right?
(the only exception to this is people selling non tangible products or services - for example, information products usually work better in text emails.)
What should you communicate in your emails?
· Special offers
Any products that you have put on special offer, sale items, end of line stock etc. Adding a message of limited availability or ends by a certain date will help increase response.
· Seasonal offers
Garden furniture and barbecues in Spring, for example.
· Offers tied to special events
Before the recent FIFA World Cup, I was inundated with special offers on all kinds of TV’s for watching it on. If you can tie your products to a popular event in some way, so much the better.
· New product reviews
Reviews of the latest product offerings to hit your marketplace, will interest your customers.
· Technical “how to’s”
If you sell any kind of technical product, your customers will appreciate the occasional how to guide. How to get the best out of your equipment, top tips, etc.
Frequency of emails
I wouldn’t advise emailing your customers any more than once a week, and leave it more than a month between communications and they are likely to be forgetting about you.
There we have it. Loads of ideas on how to keep in touch with your customers, and make sure you stay at the forefront of their minds. The cost is virtually zero, and the potential returns are massive.
What’s the cost if you don’t? Well, undoubtedly one of your competitors will make the effort – and end up seducing your customers away from you . . possibly for good.
If not, you’re potentially leaving a lot of money on the counter.
Keeping in touch with your past customers and visitors, is one of the easiest and cost effective methods of increasing your website sales. You simply must have a mechanism to collect the email addresses of both buyers and browsers alike.
Collecting buyers email addresses is a ”no brainer” – after all you need to send them confirmation details, receipts etc. Just make sure you ask their permission to keep them up to date on future special offers.
Collecting visitor details is a bit trickier, and you must offer some kind of incentive in return for them handing over their valuable email address. Here are several ways:
· A discount voucher off their first order
The amount you are prepared to offer will depend on the profit margin in your business, and the drawback is you may only get the email addresses of people who were going to purchase anyway.
· A competition to win one of your products.
Do make sure you are honest and pick a winner – put past winner details on your site to emphasise this
· An insiders buyers guide
If you offer technical products that can be tricky to understand – such as electronics, audio-visual etc, then write a short guide
· Special reports or tips guides
If you sell golf equipment, search for articles on golf tips online, obtain the authors permission and compile them into a PDF report.
Managing your list
Depending on what ecommerce system your website is based on, you may already have the ability to manage email lists. If not, use a list management service such as Aweber (www.aweber.com), which allows you to set up autoresponder sequences, multiple lists and send HTML emails.
Which brings me nicely to the next *must* . . . send HTML emails!
HTML emails are the ones full of images and graphics, rather like webpages as opposed to plain text emails.
Why? They are far more eyecatching, which is essential given the increasing amounts of email we get every day. You stand a better chance if you include images of your products – after all a picture is worth a thousand words, right?
(the only exception to this is people selling non tangible products or services - for example, information products usually work better in text emails.)
What should you communicate in your emails?
· Special offers
Any products that you have put on special offer, sale items, end of line stock etc. Adding a message of limited availability or ends by a certain date will help increase response.
· Seasonal offers
Garden furniture and barbecues in Spring, for example.
· Offers tied to special events
Before the recent FIFA World Cup, I was inundated with special offers on all kinds of TV’s for watching it on. If you can tie your products to a popular event in some way, so much the better.
· New product reviews
Reviews of the latest product offerings to hit your marketplace, will interest your customers.
· Technical “how to’s”
If you sell any kind of technical product, your customers will appreciate the occasional how to guide. How to get the best out of your equipment, top tips, etc.
Frequency of emails
I wouldn’t advise emailing your customers any more than once a week, and leave it more than a month between communications and they are likely to be forgetting about you.
There we have it. Loads of ideas on how to keep in touch with your customers, and make sure you stay at the forefront of their minds. The cost is virtually zero, and the potential returns are massive.
What’s the cost if you don’t? Well, undoubtedly one of your competitors will make the effort – and end up seducing your customers away from you . . possibly for good.
Sunday, July 09, 2006
Alas! In E-commerce Taxland
In trying to comply with tax laws for your e-business, you may find yourself falling down the rabbit-hole, going through the looking glass, and attending a Mad Tea-Party.
Common sense, logic, and fairness never did apply fully to the field of taxation but this is especially true of e-commerce transactions.
1. Canada Customs Welcomes You to Canada!
Since I`m located in Canada, let`s start here.
Canada has what you might call a national sales tax or a value added tax (VAT). This Goods and Services Tax (G.S.T.) of seven percent is applicable to many Canadian transactions.
Not only is it critical to determine whether a taxable sale was made in Canada or not, but also where in Canada. If it was made (or deemed to be made) in any of the Harmonized Sales Tax (H.S.T.) provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador), a higher, fifteen percent H.S.T. rate applies. This is because those provinces have allowed Canada to collect their provincial sales taxes for them.
As well, each province and territory has its own rules. Ontario charges eight percent retail sales tax on many typical Internet transactions whereas Alberta has no provincial sales tax.
Of course, this is only scatching the surface. This entire article is an over-simplification of a very complex subject. You will definitely need professional advice to help you through E-Commerce Taxland.
2. When Exports Aren`t Exports
In Canada, exports are "zero-rated" sales for G.S.T. purposes. This means that when you ship a product to someone outside Canada, you don`t charge G.S.T. Yet, you get to claim (or deduct from the G.S.T. collected by you) all the "input tax credits" (G.S.T. that you paid for business purposes) to make that export. The idea, I suppose, is to encourage exporting.
However, if you export products other than tangible, physical goods, beware! There are many pitfalls to watch out for.
As one example, consider digitized products that you might sell from your Canadian website, such as e-books, downloadable software, or subscriptions to content. You would be considered to be selling "intangible personal property". Unless your product is also considered "intellectual property" (such as software or e-books that you produced or have obtained the rights for), you will have to charge G.S.T. The reason why, according to the Canada Customs and Revenue Agency, is that it COULD be used inside Canada, even if it isn`t.
Say you sold a membership for accessing digitized content (from various sources) on your Canadian website to a customer in the United States. Since there are no restrictions as to where the intangible personal property may be used, and the property is not considered intellectual property (nor the provision of a service), the American customer is subject to G.S.T., even if he never comes to Canada.
Strangely, the same logic doesn`t apply when an American buys a regular book (or a car) which he COULD bring into Canada with him and use here. It is true that it is easier for Canada to assess such items at the border than in cyberspace, but I know of no cases of Americans being taxed on the books or cars they bring with them when they come to live in Canada for about half the year.
As a Canadian registrant, one way you might legally avoid this silly March Hare is to explicitly state on your website and invoice that use of such intangible personal property in Canada is prohibited (or requires an additional fee and the payment of G.S.T.).
3. When Imports Aren`t Imports
Goods shipped to Canada are subject to G.S.T. on importation. Such tax is often assessed at the border. But what if you are a Canadian registered for G.S.T., selling to a Canadian customer but your supplier is in a foreign country?
Pretend that your Canadian customer has bought a book from you from your Canadian website. Your drop ship supplier is located in the United States and is registered for G.S.T. You fax your order to the American company, and they, in turn, ship the book for you (complete with Customs Declaration and their G.S.T. Business Number).
Since they paid the G.S.T., you wouldn`t think you would have to charge it again, would you? "Wrong!", smiles the Cheshire cat. Since you are a registrant located in Canada, you are required to charge and remit the G.S.T.
But you are entitled to input tax credits, aren`t you? In many cases, the answer is "No".
It may be very difficult for you to satisfy the documentary and other technical requirements. As an example, it is not uncommon for American suppliers to absolutely refuse to give an invoice breaking down the G.S.T. or to allow you to be the Importer of Record. This complicates their life unnecessarily and they just don`t need the aggravation.
There are relieving tax provisions covering drop shipping, sales agencies, and other situations. In many cases, unfortunately, the most practical solution is to allow the tax to be paid twice.
4. When You`re Subject to Tax Where You`re Not Subject to Tax
It makes sense that countries impose a tax on sales and income made in their own jurisdiction. But does it make sense for Germany to tax sales made in the United States?
In effect, starting July 1, 2003, the European Union has done just that by imposing an online sales tax.
This means that if someone from England buys an e-book from someone in the United States, the American should submit this tax. Of course, If the sale was to someone in Germany, the tax rate would be different.
The rationale behind this follows: Since countries can`t collect sales tax on Internet transactions at their borders, the only way they can collect it (other than a self-assessment system) is with an online sales tax. Further, it is claimed that businesses in the European Union suffer a major competitive disadvantage because they have to collect Value Added Tax (VAT) but others don`t.
I know what they mean. Welcome to the club!
Common sense, logic, and fairness never did apply fully to the field of taxation but this is especially true of e-commerce transactions.
1. Canada Customs Welcomes You to Canada!
Since I`m located in Canada, let`s start here.
Canada has what you might call a national sales tax or a value added tax (VAT). This Goods and Services Tax (G.S.T.) of seven percent is applicable to many Canadian transactions.
Not only is it critical to determine whether a taxable sale was made in Canada or not, but also where in Canada. If it was made (or deemed to be made) in any of the Harmonized Sales Tax (H.S.T.) provinces (Nova Scotia, New Brunswick, and Newfoundland and Labrador), a higher, fifteen percent H.S.T. rate applies. This is because those provinces have allowed Canada to collect their provincial sales taxes for them.
As well, each province and territory has its own rules. Ontario charges eight percent retail sales tax on many typical Internet transactions whereas Alberta has no provincial sales tax.
Of course, this is only scatching the surface. This entire article is an over-simplification of a very complex subject. You will definitely need professional advice to help you through E-Commerce Taxland.
2. When Exports Aren`t Exports
In Canada, exports are "zero-rated" sales for G.S.T. purposes. This means that when you ship a product to someone outside Canada, you don`t charge G.S.T. Yet, you get to claim (or deduct from the G.S.T. collected by you) all the "input tax credits" (G.S.T. that you paid for business purposes) to make that export. The idea, I suppose, is to encourage exporting.
However, if you export products other than tangible, physical goods, beware! There are many pitfalls to watch out for.
As one example, consider digitized products that you might sell from your Canadian website, such as e-books, downloadable software, or subscriptions to content. You would be considered to be selling "intangible personal property". Unless your product is also considered "intellectual property" (such as software or e-books that you produced or have obtained the rights for), you will have to charge G.S.T. The reason why, according to the Canada Customs and Revenue Agency, is that it COULD be used inside Canada, even if it isn`t.
Say you sold a membership for accessing digitized content (from various sources) on your Canadian website to a customer in the United States. Since there are no restrictions as to where the intangible personal property may be used, and the property is not considered intellectual property (nor the provision of a service), the American customer is subject to G.S.T., even if he never comes to Canada.
Strangely, the same logic doesn`t apply when an American buys a regular book (or a car) which he COULD bring into Canada with him and use here. It is true that it is easier for Canada to assess such items at the border than in cyberspace, but I know of no cases of Americans being taxed on the books or cars they bring with them when they come to live in Canada for about half the year.
As a Canadian registrant, one way you might legally avoid this silly March Hare is to explicitly state on your website and invoice that use of such intangible personal property in Canada is prohibited (or requires an additional fee and the payment of G.S.T.).
3. When Imports Aren`t Imports
Goods shipped to Canada are subject to G.S.T. on importation. Such tax is often assessed at the border. But what if you are a Canadian registered for G.S.T., selling to a Canadian customer but your supplier is in a foreign country?
Pretend that your Canadian customer has bought a book from you from your Canadian website. Your drop ship supplier is located in the United States and is registered for G.S.T. You fax your order to the American company, and they, in turn, ship the book for you (complete with Customs Declaration and their G.S.T. Business Number).
Since they paid the G.S.T., you wouldn`t think you would have to charge it again, would you? "Wrong!", smiles the Cheshire cat. Since you are a registrant located in Canada, you are required to charge and remit the G.S.T.
But you are entitled to input tax credits, aren`t you? In many cases, the answer is "No".
It may be very difficult for you to satisfy the documentary and other technical requirements. As an example, it is not uncommon for American suppliers to absolutely refuse to give an invoice breaking down the G.S.T. or to allow you to be the Importer of Record. This complicates their life unnecessarily and they just don`t need the aggravation.
There are relieving tax provisions covering drop shipping, sales agencies, and other situations. In many cases, unfortunately, the most practical solution is to allow the tax to be paid twice.
4. When You`re Subject to Tax Where You`re Not Subject to Tax
It makes sense that countries impose a tax on sales and income made in their own jurisdiction. But does it make sense for Germany to tax sales made in the United States?
In effect, starting July 1, 2003, the European Union has done just that by imposing an online sales tax.
This means that if someone from England buys an e-book from someone in the United States, the American should submit this tax. Of course, If the sale was to someone in Germany, the tax rate would be different.
The rationale behind this follows: Since countries can`t collect sales tax on Internet transactions at their borders, the only way they can collect it (other than a self-assessment system) is with an online sales tax. Further, it is claimed that businesses in the European Union suffer a major competitive disadvantage because they have to collect Value Added Tax (VAT) but others don`t.
I know what they mean. Welcome to the club!
The Internet Made Easy
Let me ask you a quick question. . .
How many times have you banged your fists into the table and shaken your head in disbelief because trying to get onto the Internet seems so frustrating?
If you have, it can feel like the world's passing you by.
Your friends are 'online', your family's 'online', heck even 5 year olds seem to have it mastered - and you - well you're still trying to figure out how the whole thing just goes together.
Do any of these all too common problems drive you nuts:
Can't connect to your ISP (Or Your Not Even Sure What That Is)
The modem won't work (No matter what you try you just can't get online)
You can't send emails
You can't receive emails
You're worried about online viruses
And you're to scared to buy online because of credit card fraud!
If that sounds like your experience with the Internet so far, or it sounds like the problems someone you know has and you want to help them then you're in luck!
If you don't know your ISP from your elbow, have no idea what the heck a 'POP' server is and don't want to to fuss over a 'Firewall' . . . . but you simply want to get on with it and connect to the world-wide-web then our brand new video set called 'The Internet Made Easy' is for you!
Why Video?
Quite simply, we've found it's the fastest and easiest way for people to learn.
Video training is the closet thing you can have to expert one on one tuition (without the expense) and you can learn at your own pace.
Imagine, saving time by doing the weekly shopping online and the great things you could do with the hours you'll save. . . Picking up a great bargain or deal on a new holiday or automobile that makes you the envy of your friends . . . Having access to all the information you need from health issues and sports results through to local events and global news . . . Whatever you need, it's all online waiting for you.
Seriously... who wants to struggle with 'How To' books that have been thrown together by rocket scientists for other rocket scientists to read - Or worse still, waste hours on premium rate telephone 'Help Lines' where the person you speak to is probably on the other side of the world and seems to have less idea than you.
The answer is right in front of you . . . It's simple, insert the disk into your PC choose from the menu which area you need help with and spend ten minutes listening and watching to exactly how it's done.
In a less than an hour all your online problems can be solved.
Just take a look at some of the topics we include in 'The Internet Made Easy'
Here's A Quick Summary Of What's Included:
Choosing which is the best Internet Service Provider For You.
How to protect yourself with FREE Anti-Virus Software.
How to send and receive emails with ease with Outlook Express
How to use Internet Explorer and find what you need FAST!
How to buy online safely and securely
How to download and save files to your PC (including ZIP and PDF files)
How to get organized and work with files and folders
How to back up your information to keep it safe
How to use RSS feeds and gather news and information easily.
It's All About Being Safe - Being Sure - And Being Online
How many times have you banged your fists into the table and shaken your head in disbelief because trying to get onto the Internet seems so frustrating?
If you have, it can feel like the world's passing you by.
Your friends are 'online', your family's 'online', heck even 5 year olds seem to have it mastered - and you - well you're still trying to figure out how the whole thing just goes together.
Do any of these all too common problems drive you nuts:
Can't connect to your ISP (Or Your Not Even Sure What That Is)
The modem won't work (No matter what you try you just can't get online)
You can't send emails
You can't receive emails
You're worried about online viruses
And you're to scared to buy online because of credit card fraud!
If that sounds like your experience with the Internet so far, or it sounds like the problems someone you know has and you want to help them then you're in luck!
If you don't know your ISP from your elbow, have no idea what the heck a 'POP' server is and don't want to to fuss over a 'Firewall' . . . . but you simply want to get on with it and connect to the world-wide-web then our brand new video set called 'The Internet Made Easy' is for you!
Why Video?
Quite simply, we've found it's the fastest and easiest way for people to learn.
Video training is the closet thing you can have to expert one on one tuition (without the expense) and you can learn at your own pace.
Imagine, saving time by doing the weekly shopping online and the great things you could do with the hours you'll save. . . Picking up a great bargain or deal on a new holiday or automobile that makes you the envy of your friends . . . Having access to all the information you need from health issues and sports results through to local events and global news . . . Whatever you need, it's all online waiting for you.
Seriously... who wants to struggle with 'How To' books that have been thrown together by rocket scientists for other rocket scientists to read - Or worse still, waste hours on premium rate telephone 'Help Lines' where the person you speak to is probably on the other side of the world and seems to have less idea than you.
The answer is right in front of you . . . It's simple, insert the disk into your PC choose from the menu which area you need help with and spend ten minutes listening and watching to exactly how it's done.
In a less than an hour all your online problems can be solved.
Just take a look at some of the topics we include in 'The Internet Made Easy'
Here's A Quick Summary Of What's Included:
Choosing which is the best Internet Service Provider For You.
How to protect yourself with FREE Anti-Virus Software.
How to send and receive emails with ease with Outlook Express
How to use Internet Explorer and find what you need FAST!
How to buy online safely and securely
How to download and save files to your PC (including ZIP and PDF files)
How to get organized and work with files and folders
How to back up your information to keep it safe
How to use RSS feeds and gather news and information easily.
It's All About Being Safe - Being Sure - And Being Online
E-Commerce, Put your business on Internet for success.
E-Commerce, Put your business on Internet.
If your business is not on the Internet, it is not doing as well as it could. In today’s day and age, if you are not advertising on the Internet, you are losing a significant amount of business.
You advertise your business in local newspapers, local television and even local radio. That is good. You are getting enough business to keep you afloat. You may receive inquiries from the surrounding cities, or even the bordering states, and that is great.
What if you could attract business from another country?
When you finally decide to take advantage of technology, the Internet is an incredible universe of its own.
When you create a Website, and starting an e-commerce trade, you are opening your business to a whole new world.
Businesses that would not know that you exist are now able to view your website, research your services and contact you with any questions.
By taking advantage of the Internet, you are allowing your business to grow in ways that it could not if you were to advertise with conventional methods.
In recent years, the E-commerce trades as raised a steady twenty-five every year, and experts feel that this trend will continue. When you finally decide to take the plunge and get your business started on the Internet, there are a few steps that you should take before starting. This will be a nerve wrecking, nail biting point in the growth of your business.
There are steps to take before jumping in. As with any new venture, do a lot of research. Find out what the statistics and trends are for your type of business.
Make sure that your products or services are available as soon as your Website goes live. You want to have everything ready to ship as soon as you get an order. If a client feels that they have received exceptional treatment, your business will experience repeat business.
After your website is created and goes live, there is more to do. Advertising your business in the right manner is crucial. Joining E-commerce organizations and associations, can give your business the boost it needs. These are groups of business owners just like you who want to advertise their businesses.
When you join these organizations and associations you are agreeing to their rules and terms. Most have very strict rules of conduct, and once established, Potential clients will find you through them. Remember, if you are debating whether or not to go forward and start an E-commerce Trade, your competitors are taking advantage of the Internet.
For everyday that you procrastinate, your competitors will take full advantage of all that the Internet has to offer. If you are not familiar with the “Do’s and Don’ts” of the Internet, have no fear. A simple search of the Internet will yield Thousands perhaps millions of companies who will explain to you the benefits of an online business. They will assist you in creating and maintaining an online business that will raise your standard of living.
If your business is not on the Internet, it is not doing as well as it could. In today’s day and age, if you are not advertising on the Internet, you are losing a significant amount of business.
You advertise your business in local newspapers, local television and even local radio. That is good. You are getting enough business to keep you afloat. You may receive inquiries from the surrounding cities, or even the bordering states, and that is great.
What if you could attract business from another country?
When you finally decide to take advantage of technology, the Internet is an incredible universe of its own.
When you create a Website, and starting an e-commerce trade, you are opening your business to a whole new world.
Businesses that would not know that you exist are now able to view your website, research your services and contact you with any questions.
By taking advantage of the Internet, you are allowing your business to grow in ways that it could not if you were to advertise with conventional methods.
In recent years, the E-commerce trades as raised a steady twenty-five every year, and experts feel that this trend will continue. When you finally decide to take the plunge and get your business started on the Internet, there are a few steps that you should take before starting. This will be a nerve wrecking, nail biting point in the growth of your business.
There are steps to take before jumping in. As with any new venture, do a lot of research. Find out what the statistics and trends are for your type of business.
Make sure that your products or services are available as soon as your Website goes live. You want to have everything ready to ship as soon as you get an order. If a client feels that they have received exceptional treatment, your business will experience repeat business.
After your website is created and goes live, there is more to do. Advertising your business in the right manner is crucial. Joining E-commerce organizations and associations, can give your business the boost it needs. These are groups of business owners just like you who want to advertise their businesses.
When you join these organizations and associations you are agreeing to their rules and terms. Most have very strict rules of conduct, and once established, Potential clients will find you through them. Remember, if you are debating whether or not to go forward and start an E-commerce Trade, your competitors are taking advantage of the Internet.
For everyday that you procrastinate, your competitors will take full advantage of all that the Internet has to offer. If you are not familiar with the “Do’s and Don’ts” of the Internet, have no fear. A simple search of the Internet will yield Thousands perhaps millions of companies who will explain to you the benefits of an online business. They will assist you in creating and maintaining an online business that will raise your standard of living.
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