Tuesday, May 31, 2011

How Do I Incorporate The Shipping & Handling When Using A Dropshipper?

Question submitted by Leanne: How do we incorporate the charges them for S/H considering we are shipping all over the place?

Answer: There are many variances to consider. You have to determine which method works best for you. I know for a fact that StoresOnline integrates with UPS so if you signed up for a UPS shipping account (FREE), you can use it on your site and let it calculate the shipping for you. This does however require you to know the shipping weight of every item. If you can't ft the shipping weight on every item from your supplier, this doesn't work. Also, if you have multiple suppliers and not all of them use UPS, you cannot use this method.

You can try your best to simulate your supplier's shipping rates. This may require you to change your shipping calculations every now and then until you've tweaked them just right. Your other choice is to just go with a standard shipping policy based on how much the customer spends. This is what I do.

One note of warning when using any method is that if you have multiple suppliers for the same site, you run the risk of the customer ordering something from each supplier. Say, for instance, you have 3 suppliers and your customer orders something that weighs 1lb from each. Your customer's order total weighs 3lbs which will probably calculate to like, $12-$14 for UPS. However, your suppliers are only shipping 1 item and they each charge you $9 (x3 = $27). Now it wouldn't be fair to charge your customer $27 because you chose not to carry inventory. If you did, no one would ever purchase from you. So in this case you lose a bit on shipping, but if you set your prices right or add a small handling fee, things may even out as you win on some orders and lose on others.

Sunday, May 29, 2011

How Does Dropshipping Work?

Question submitted by Leanne: I was under the impression that I set-up my web page with stores online give them the drop-shipper's information so they can incorporate them into the website and then I thought that when the customer ordered that the money was processed and transferred to the drop shipper account. I wasn't really clear on how I get my cut ..., so exactly how do that part work? Once they place an order on our sites and pay for the products were do the payment actually go? How do we transfer the money to the drop shippers and how do the drop shipper know where to send the products to?

Answer: Each relationship is different. Even the StoresOnline (SOL) provided dropshippers may differ among them. That is why SOL states that you have a relationship with the dropshippers separate from SOL.

Each dropshipper/supplier will have their own rules. Those that give you credit allow a Net 30 or Net 15. That means they will bill you for orders shipped with those bills being due in 30 or 15 days, respectively. Others will require you to have a card on file so that they can charge you before they ship the order.

With your SOL package, you should have received a very discounted setup of a merchant account. You probably get multiple merchant accounts. As a rule of thumb, they like you to have one merchant account for each website that you have. This also means more overhead because there are monthly fees associated with each account. If the products on multiple websites are similar, you can get away with using one merchant account for all of those sites. I currently use one account and when I applied for the account I told them that I sold general merchandise. Using the word "general" doesn't pigeonhole me into one type of product. I'm not saying that this is the right thing to do, but so far its been working for me. If I ever get audited, somebody may tell me different. This is my method of keeping overhead down until I'm told otherwise. At any rate, the merchant account is tied to your bank account. So any customer placing an order with their credit card will have their funds eventually deposited into your bank account. So all the money goes to you. There is a settlement/batching process that you need to get familiar with, but in the end the money goes to your account, minus some transaction fees.

How you submit to your suppliers may differ as well. Most allow email submission, all allow fax submission. Some may even take submission over the phone, but that is time consuming for both parties. Some may require you to place your order via web. Some will ask for an Invoice, Sales Receipt, or Packing Slip to include in the box with the order. Any one of these will list the items to be shipped, who/where the items are to be shipped to and the shipping method (UPS, FedEx, Ground, 2nd Day, etc). The Invoice and Sales Receipt typically has the order itemized order totals in terms of what the customer paid. The Packing Slip may or may not have order totals, but typically does not. Other suppliers may ask for one of those, plus a Purchase Order, to them. This form generally has all the same information plus the supplier information except that the order totals are in terms of what you pay the supplier. Some suppliers my be fine with you forwarding the emails you get from your system. The latest version of the SOL tool does have a Supplier Notification feature. I haven't played with this yet but I reckon it does some emailing for you. Also, how you send things to your supplier may be based on how you keep your books. I, personally, use Microsoft Small Business Accounting. Every order that I receive gets keyed into that program. The program can generate any of those forms I mentioned before. Also, its a life saver at the end of the year for federal tax time and every quarter for sales and use tax time. Other programs like Quicken can do the same for you. Since I have to key in the orders anyway, I'm not sure that the Supplier Notification feature will help me any. Hence me not having tried it, LOL!

Friday, May 27, 2011

What do I need to cover myself legally?

Question submitted by Leanne: Since i could not afford at the time to get the legal package I wante dto know how do I go about getting the name of the business I want here trademarked and I believe I may also need a reseller license but I am not sure if FL offers that.  what is the best route for me to go to cover myself inexpensively concerning getting legal information I will need? People are so sue happy and since we are reselling products online there are several things I may need to cover myself.

Answer: In general, if your business name has your last name, then its not required to be registered. Your website can be called something completely different. You should brand your business name with the website or you might need to register a Doing Business As Name. I'm no expert on this so you should probably consult http://www.sba.org/.

Since this is a retail business, you will likely need a Sales and Use Tax License. It is free, and you can register online at http://dor.myflorida.com/dor/taxes/registration.html. You may also need a Dunn & Bradstreet (D&B) number from http://www.dnb.com/. You may also want to consider getting an EIN number from http://www.irs.gov/ even if you don't incorporate and don't have employees. Having the EIN will keep you from having to list your SSN everytime someone asks for your business tax ID.

While it is suggested that you incorporate your business to separate you business assets from your personal assets, it certainly is not required. In my experience, dropshippers don't care as long as you appear professional. They usually ask for the sales and use tax (reseller) license and sometimes the D&B number. They may even ask for references. In the case of the references, you may need to revisit that supplier after you've found other suppliers.

This is a very sue happy country so there is always a risk of being sued by somebody for something. In the case of lawsuits, being incorporated, or at least a Limited Liability Company, is best. Generally, when you sell someone else's product, the customer goes after the manufacturer, not the seller. If I get sick from eating a bag of Lays potato chips that I bought from Wal-Mart, I'm not going to sue Wal-Mart, I'm going to sue Lays. If you look at it like that, then the risk of being sued is probably minimal. What I can say is that there is a good time to incorporate and a bad time. There can be tax benefits to waiting. On the other hand, how you incorporate is important as well. There can be tax benefits there too. Here is a nice table comparison: www.themoneyalert.com/Corp-Entity-Table.html.

If you choose not to incorporate, make sure that your website contains a disclaimer about your company not being liable for misuse of the products and show the brand name of your products as much as you can (makes it easier for the customer to know who the manufacturer is).

Remember that I'm no lawyer or business consultant. These are just practices that I have for my own business.

Wednesday, May 25, 2011

Should I purchase the StoresOnline product or is it a scam?

Question submitted by Lola: I’ve recently spent 100 dollars to attend the StoresOnline workshop, but am worried that it’s a scam. There is a lot of negative info on them on the web. Would you mind taking a few moments and telling me a bit about your experience with them?

Answer: I am so glad that you are doing your research on StoresOnline. I can understand your concern as there is a lot of negative feedback about this company.

As a customer since November 2004, I can assure you that it is far from a scam. However, it is not a get rich quick scheme or a magic potion that guarantees success. You will have to work at it. It will require many hours of your time.

First and foremost, understand that you are not being introduced to a business. You are being introduced to a tool. The tool is guaranteed to help you build a website and be an aid for running your business, but it is not guarantee of business success. Your business success depends on you, whether you purchase the tool or not. I believe that the majority of people who are claiming to be scammed didn't grasp this concept.

With all that being said, I can say, in my professional opinion (I have a BS in Computer Science and a MS in Software Engineering), the StoresOnline tool is one of the best. There are cheaper tools and more expensive tools on the market. The compilation of features that are included is well worth the price. Having the technical experience that I have, I didn't require a lot of support from StoresOnline to build my sites. Your level of technical expertise may differ. I will say that if you are willing to commit to rearing the wealth of knowledge that is provided in the help pages and watching the video tutorials, you will quickly become an expert using the tool.

Building a website is only the first step. One of the keys to a successful online business is marketing. The tool has many features that are integrated and plenty of educational material so that you can learn how to use them correctly. However, marketing is an ever changing topic and you have to be committed to continually educating yourself even with information found elsewhere. There is a plethora of FREE information on the internet on Internet Marketing and Search Engine Optimization (SEO). You just have to be willing to read it.

As you might not know, running your own business takes a lot of effort, more effort than just working for someone else. You need to be willing to make sacrifices with your time and budget until you start to see returns. It will be a lot of work at first, but as time goes on, you can choose to slow your pace.

This is not for everyone. The tool is easy to use, once you learn it. The marketing techniques are easy to do but require a lot of repetition, which is time consuming, to make them successful. Running a business in general is time consuming and costly.

Lastly, my feedback on whether you should buy the StoresOnline tool versus another tool is "it's up to you." You need to decide what it is that you need to manage your e-commerce website and business. Compare features from StoresOnline to the other products. You may not require all that StoresOnline has to offer and will be okay with a cheaper solution. Just remember that you get what you pay for. If you are just getting introduced to e-commerce, I suggest you do some research and educate yourself on the industry. Would you open a fine dining restaurant without knowing the first thing about running a restaurant or even working in one? Even though this is a virtual business, the same principles apply.

See Also: StoresOnline Did not Scam Me!

Monday, May 23, 2011

I just started with StoresOnline and I’m so overwhelemed!

It's true, there is a lot to do and learn, but don't overwhelm yourself. Take it step by step. Do a little at a time. Most of all, don't wear yourself out doing one thing. Jump around so you don't get bored with it. Over time, you will have done more than you think and the results will be evident.

One site that was really helpful to me in the beginning was http://www.onlinemerchantforum.com/. There are a ton of other newbie StoresOnline merchants, just like yourself, going through the motions. There is a lot of great information there and you won't feel alone in the process.

Most importantly, continue to educate yourself in this e-commerce industry and in the SEO and marketing. It is ever changing. If you want to be successful and stay that way, you need to be up on the trends.

Saturday, May 21, 2011

“I don’t know what to sell or even where to begin…”

It can be hard to decide what to sell as there are many lucrative options.  My suggestion is to start with something that you love.  Write down a list of products that you buy regularly. Look into selling those types of products. Use your reverse search to make sure you have an online market for it.  It always best to start with something that you are passionate about because when the hours get late, and you become tired of educating yourself with the marketing techniques, it is that passion that will keep you going.

Thursday, May 19, 2011

"Your less likely to find drop shippers that want to do business with you if your not classified as a Corporation". Is this true?

Question submitted by Linda R.: said "Your less likely to find drop shippers that want to do business with you if your not classified as a Corporation". Is this true?

Answer: No, you do not have to be incorporated to find dropshippers. You may need to have a registered business and show at least a sales and use tax license. Some may even require a Dunn & Bradstreet (D&B) number. All of these things can be obtained without being incorporated. I have over 6 dropshippers suppliers and none of them care that my business is not incorporated.

Tuesday, May 17, 2011

Did you purchase any extra material about taxes and what to classify your business as?

Question submitted by Linda R.: We are extremely new, we started mid March 2011, attended a Boot Camp where a Paid Lawyer came to talk to us about Taxes and what our business should be classified as ie., sCorp., Corp. DBA, etc. When we realized they were just trying to sell us something we were a little upset. The reason for the upset was because we were told the Boot Camp was for only the Platinum buyers and we would be getting more info on SEO and Tax info. The older gentleman sitting next to me even asked "Will there be anymore things he needs buy at the Boot Camp?". The reply he got was" No". So my question is did you purchase any extra material about taxes and what to classify your business as? Of course they have me worried now that we may be sued…

Answer: No, I did not purchase the extra tax information. It wasn't even offered when I purchased in Nov 2004. I have attended the same boot camp and I do find value in the information and the offer. With regards to anything extra, I did not buy because I could not afford it. That includes the extra help that was being offered but required extra money. This country is very sue happy so there is always a risk of being sued for something. With that in mind, it is always best to protect your assets. Separating business assets from personal assets by incorporating is the best thing to do. Generally, when you sell someone else's product, the customer goes after the manufacturer, not the seller. If I got sick from eating a bag of chips that I bought at Walmart, I'm not going to sue Walmart, I'm going to sue the company who brands the chips. If you look at it like that, then the risk of being sued is probably minimal. What I do know is that there is an appropriate time to incorporate. There are tax benefits to waiting.