June 26th, 2009 -- Posted in Shipping |
California sales tax may apply to charges for delivery, shipping, and handling. To help you apply tax properly in your business, we’ve created the quick reference guide printed on the reverse. It gives examples of common shipping situations and charges and explains how sales tax applies in each situation. Be sure to read the notes and exceptions in the chart (the “fine print”) and to remember that more than one condition may apply to your specific sale. Before you turn the page, please consider the following basic information.
Make sure that your invoices are clear
Be sure that your invoices and receipts use specific terms to describe delivery- related charges. If you are charging for shipping, which may not be taxable, use terms such as shipping, delivery, freight, or postage. If you are charging for handling, which is taxable, be sure to use that term on your invoice. This will help you determine how to apply tax and will make things clearer for your customers. It will also make it easier for everyone if we audit your records.
Keep good records
It’s important to keep good records that fully document your shipping costs.
Acceptable forms of documentation include
• Bills of lading
• Freight invoices
• Express receipts or express company invoices
• Parcel post receipts or shipment records
• Sales invoices showing transportation charges and shipping instructions
• Delivery receipts and expense vouchers supporting your delivery expense
• Correspondence stating requirement and completion of delivery
• Title transfer agreements
Please note: If you do not keep records showing the actual cost of an individual delivery, tax applies to your entire delivery charge if it is made in connection with a taxable sale.
June 20th, 2009 -- Posted in Transportation |
We delude ourselves if we think that travelling by air is becoming safer in our modern age. The fact that aircraft and airport technology is more sophisticated than ever does not mean that air travel is becoming safer for you, the traveller.
Most people think of modern air travel as a routine (but cramped) method of travelling quickly over a long distance. Indeed, the travel industry is always keen to point out that air travel is the safest form of transport in the world. ‘You are much more likely to die in a car accident than in a plane accident’, they will insist. But they are wrong!
In fact, you’re about 12 times more likely to die in the air than in a car ride. Let us look at the facts:
• When the airline industry gives figures about its safety record, it quotes statistics showing that there are about
0.03 fatalities per 100 million kilometres flown, compared with 0.10 fatalities per 100 million kilometres for rail travel and 0.175 per million kilometres for cars. In other words, they are saying that air travel is about 3 times safer than rail travel and 5 times safer than car travel per 100 million kilometres of distance travelled.
• But these statistics are highly skewed. Typically, planes travel huge distances but 70% of aircraft accidents take place on take-off and landing, manoeuvres which represent only 4% of journey time and are therefore relatively much more dangerous.
• A much more realistic figure is the rate of fatalities per number of journeys made. By this measure, air travel takes on a very different complexion. Fatalities per 100 million passenger journeys are, on average, 4.5 for cars, 2.7 for trains, and 55 for planes! This means you are 12 times more likely to die on a commercial jet compared to a car, and 20 times more likely to die on a commercial jet compared to a train.
June 15th, 2009 -- Posted in Shipping |
For a lot of people, drop shipping can seem like a perfect solution to start an internet business. While drop shipping has its place in the world, there have been many myths associated with it.
Myths are propagated by people who think they understand something, but don’t. You may have heard many things, both good and bad, about drop shipping. But if you want to know the truth about something, you should go to somebody that actually works in the business, rather than someone who has little more than rumors and conjecture.
Having run a business using drop shippers as my product source, as well as having worked in the drop shipping industry, I have nearly 10 years of personal experience with drop shipping. Here are some of the common myths that I have often heard associated with drop shipping and drop shippers.
Myth #1: Drop shipping means big money for little work
Running a business is a lot of work! Sure drop shipping saves you from warehousing, inventorying, and packaging and shipping items. But in the end, you’ve still got a retail business to run. Furthermore, profit margins are thinner because the drop ship supplier takes on much of the risk involved with warehousing the products.
Myth #2: All drop shippers will be happy and willing to work with me
Some drop shippers will work with anybody. Those drop shippers will typically have a fee associated with them, or else their wholesale price is not as good. Other drop shippers have minimum requirements. For example, you may be expected to have several thousand orders per month.
Some drop shippers will even charge you a non-refundable application fee. If they decide you’re not big enough to work with them, you lose your application fee.
Of the more than 50 suppliers Doba works with, several have application fees, a few have monthly fees, and several more only agreed to drop ship for us because we promised them high volume, something we can do thanks to the combined purchasing power of our membership. Fortunately, Doba does not pass along any application or monthly fees, and you never have minimum requirements.
Myth #3: It’s impossible to make money with drop shippers
It is true that your profit margins will be thinner, but some of the internet’s largest retailers use drop shippers exclusively as their product suppliers. If they weren’t making money, then they wouldn’t be some of the largest retailers on the internet.
Something that new entrepreneurs often fail to understand is that pricing is only one small part of business. If your focus is exclusively on price, then your business will never succeed because you’ll be completely ignoring the many other parts of business that are required to succeed.
I once sold a product in a very competitive market. The product had an average 10-15% return rate, and the mean price was $19.95. I sold my product for $33 and had a return rate of 5%. My website also had a conversion rate about 2-3 times that of my competitors.
Why was I able to sell my product for 65% more than my competitors, maintain a higher conversion rate, and yet still experience far fewer returns? Very simply, I chose to focus on all aspects of my business, rather than just one or two like so many of my competitors were doing.
Myth #4: Drop shipping is the magic solution
Drop shipping is a specific service that fills a specific need. It is not a cure-all solution for business. Before jumping in, you should be sure that your business will benefit from drop shipping, and you should have a well laid out plan for making that happen.
Like all things, there are pros and cons to drop shipping. Make sure you understand how drop shipping will affect your business so your business doesn’t end up a myth itself.
