Drop Ship Articles To Help Your e-Biz Grow
"Should I Offer Free Shipping?'"
Boy, it's tempting, isn't it! Free Shipping!
People will see your proclamation of Freedom from the dreaded SHIPPING CHARGE (imagine agonized screaming here), and flock to your site to take advantage of THE INCREDIBLE SAVINGS! (Fanfare, people cheering).
Well, it’s true. In my experience, shoppers will check out an offer of free shipping before they commit to your competitor. Yahoo Shopping even lists Free Shipping sites as a category on their home page every once in a while, when they’re promoting their Shopping area. Do those sites get hits? You can bet they do. Are they doing better than you are? Probably not.
Internet Shoppers, as a rule, are not dumb. Although the Internet Shopper tends to be an instant-gratification junkie (like me), they will check around before pushing that all-important Order button. They’re going to go all the way through your order process, until they get the FINAL price. Then they’re going to cancel the order, and do some checking.
What are they going to check before they push your button? The same product on other sites.
Now, let’s assume that life is perfect, and you get the best possible wholesale price on the items you sell on your Online Store or Auctions. Naturally, life being perfect, the Shopper is going to be comparing prices on other Stores and Auctions that get the same great wholesale price that you do. What’s going to happen?
Remember, somebody’s got to pay for that shipping. Unless you are personally related to the Shipping Fairy, you’re going to have to deal with shipping charges in all their sneaky little forms. Ground shipping, air, motor freight. Residential delivery surcharge. Shipping insurance charge. Signature release charge. They get you coming and going. (Literally!).
So what’s going to happen? Your price is going to be higher. It has to be. When you offer free shipping, YOU pay for the shipping. So you have to raise your price. You have to include the estimated shipping in your item price. (Unless, of course, you want to take a hit below the belt…right in the profit margin).
Ok, ok, I know the logic. Maybe your price is higher, but with free shipping your final price will be about the same as a site that has a lower price, but charges for shipping, right? Six of one, half a dozen of the other. After the dust settles, you both make about the same profit. So the Shopper will buy from you, because you have free shipping.
But wait a minute. Where is the Shopper right now? Let’s see, they visited you first, because you have Free Shipping. Then they went somewhere else to compare, and found that the overall price was about the same. What’s going to be easier for that instant-gratification junkie?
Click! That’s the sound of someone else’s button.
Far-fetched, you think? Not really. I’d rather be the last site someone compares prices on than the first. The Shopper finds it easier, all things being roughly equal, to push the button where they ARE than go back and push the button where they WERE. When you have free shipping, people ALWAYS want to go elsewhere to compare prices, to see how much they’re saving.
We ran free shipping on one of sites for a few months, and we were less than impressed. We got an increased hit count, but it didn’t make us rich with hundreds of extra orders, and we really got nailed on some of the bigger shipping charges. We’re still trying to weed those two words out of all the little nooks and crannies in our site that we stuffed them into.
So, in my humble opinion, leave the free shipping to the big department stores that buy hundreds of each item and get massive discounts. They can afford it. We can’t.
What we CAN do, as smaller stores, is build cleaner Stores that don’t have 80 million items stuffed into each page. We can run clearly presented Auctions that look good and explain our products and policies clearly. We can personalize our service by being more responsive to Shopper’s questions and concerns. We can sell slightly more unique items that the big guys don’t want to “waste” their precious warehouse space on. We can specialize, and market to a single niche. There are any number of ways to find success without getting tangled up in a gimmick that is marginal, at best.
Chris Malta
"The Business End of an Internet Business"
I've had a lot of email from people who know they want to start an Internet business, but don't know how to put the nuts & bolts together on the business end.
That’s not surprising. It can be confusing, and there are certain steps to be taken in a certain order. Without help, you can end up running in virtual circles for weeks.
Now, please keep this in mind, folks; I’m not an attorney, and I’d rather not have to hire one after writing this article. Let me just say that this is how it works where I live. Your local government may do things a bit differently, and of course I can’t speak to this issue for those outside the US. (Sorry!) If you need to, consult an attorney or accountant. You should, though, be able to do this pretty easily on your own if you choose.
So, here’s how we do it in Florida, USA.
First, swim to the poolside bar and grab yourself a nice cold drink. Then…oops, sorry, that’s AFTER work!
Seriously, now, there are five things you would need in Florida to get started the RIGHT way. It works pretty similarly around the rest of the US.
1.) File your Business Entity
You need a “business entity.” That just means you need an official business name that’s recognized by the government. You can do this one of two ways.
A.) Corporation: You can file a corporation with your State. Florida has a web site at www.sunbiz.org, where we can file a Florida Corporation Online. I believe that most States in the US have a service like this by now. They also have instructional forms that detail what goes where, and what everything means on the forms. Once we complete our forms, we submit them online with about a $90 payment, and poof…we’re a corporation! We get our official copies back in a few days.
B.) Fictitious Name: This is a simpler way to register your business, but it does not afford you the protections that a corporation does. Same thing…in Florida, sunbiz.org has the forms, and we fill them out and submit them online. This doesn’t cost as much as a corporation. In some States, this is called a DBA (Doing Business As…), and is obtained from your local County Office building for a minimal fee. ($35 would be an average).
If you’re not sure which way you want to go, see an attorney or accountant. This is an important decision!
2.) Obtain a Business License
Here in Florida, we are required to have a County Occupational License issued by the county our business resides in. This takes a couple of hours at the local County Office Building, and costs about $30. We must show our Business Entity papers. In some other States, a County Occupational or Business License may not be required.
3.) Obtain a Resale Certificate
In almost every State you are required to have a Sales Tax Certificate (Tax ID Number). In Florida, we can get a Sales Tax Certificate in about 20 minutes for $5. We must again show our Business Entity papers. This is done at the local State Tax Office. When you buy from a Wholesale Supplier, you will be asked to supply them with a copy of this certificate. They use it as proof to the IRS that they are not required to charge you tax on the products they sell you at wholesale.
4.) Open a Business Bank Account
If you’re going to do business, you must have a business bank account. You’ll need your Business Entity papers, your Tax ID and your County Business License, (if required). Here, we can open a business account for a deposit of $50 to $100. Almost all banks offer business accounts.
5.) Open a Merchant Account
The last thing you need is a Merchant Account. You’ll need everything you obtained in the five steps above for this one. (Unless the County Business License is not required in your State).
This is the thing that allows you to accept credit cards from your online customers. Without this, you'll get nowhere. Online buyers are instant gratification junkies. They want it NOW! If they have to mail you a check, they'll go somewhere else and buy. Merchant accounts used to cost a thousand dollars and more to set up. They've come down a LOT. We just opened a new one for a setup fee of $150. The Merchant Account will collect funds from your customers’ credit cards, and deposit those funds in your business account. The Merchant Bank will charge you about 2.2% of the amount you charge your customer’s credit card, plus about 30 cents per transaction.
Your Merchant Banker will help you to incorporate your Merchant Account into your Internet store software.
Well, there it is. That’s the business end of an Internet business. Sound complicated? It isn’t, really. The hard part is waiting for one thing before you can obtain the next!
For more details on this process, please read my FREE EBook, "Starting Your Internet Business RIGHT!"
As I said above, these are just guidelines. If you have questions, please consult a professional.
Chris Malta
WorldWide Brands, Inc.
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