Read the Fine Print

This week we explored the various legal structures available for our online business, and the cost of doing business, that is the required licenses and taxes that we would pay.

It was interesting to look at the different business models; Sole Proprietorship, LLC, Partnership, and Corporations.  It appears that most of my classmates will be utilizing the Sole Proprietorship model.  This appears to be the easiest to form, and the least expensive.  It offers little or no protection to the owner, but for me, that isn’t an issue because I am not selling anything.  I am blogging and using Amazon.com affiliate links to items that relate to my topic of Genealogy.  I don’t even plan on making recommendations, so I should be clear from any liability.  Even though my Website has a name, I shouldn’t need to spend the money to get a DBA filed because I won’t exist as a business entity, at least at first.  If someone follows one of my links, they will be doing business with another company, and I will receive a small commission which I need to declare as income.  There is also the matter of the 15.3% Self Employment Tax.  Since I am essentially an independent contractor, the Government wants its share for Medicare and Social Security.  In The Man’s eyes, there is no such thing as a free lunch. 

The variety of information from my classmates emphasized the difference from state to state, and in some cases even town to town.  If this enterprise continues, I will need to revisit many of these topics and review my business model, and offerings. 

When we were first looking at Affiliate Marketing I watched a few videos of young (college age) boys who claimed they went from living in their parent’s basement to earning 6 figures a month, living in fancy beach-front condos, and driving expensive sports cars.  Then I read about a guy who had 2 high dollar affiliate links on Amazon, with high volume traffic (top 3 rankings) who made $200…in a whole year.  His product was in the $300 range, so he should have made about $15 per sale, and he earned the equivalent of 1 sale per month.  This was a real reality check.  Big disparity between $200 per year and 6 figures per month.  I have no grandiose visions of piles of cash flowing into my bank account.  I hope I can get to a point where my blog has enough followers to find Affiliate Links beyond Amazon, and tap into other markets, but I will feel fortunate if I make enough money to cover the cost of the hosting and other costs of the website.

Well,

I hope you enjoyed a glimpse of Web Business Creation, B-250 at BYU-I.  I hope to see you all next time here at my ramble.

Reflections on Sites and PayPal

I never realized how many options were available for setting up a website. I have much to learn about blogging and finding ways to incorporate affiliate links.  I’m looking at an informative blogging site focused on genealogy, with a few affiliate links.  I need to find products to review, or books to cite so I have given my reader an incentive to reach out to purchase the item I am advertising.  In addition, I need to have an informative blog that is entertaining so that people will read and come back for more.  It also needs to cause them to refer it to friends.  I don’t want it to become a marketing site that just plugs products so this will be a challenge for me to balance a good, informative entry, with an occasional reference to a product.

Despite all those challenges, I feel better about my prospects with this type of site than I would with a storefront selling merchandise.  Reading about PayPal was interesting.  It seems to be a quick and easy way to do business, but with a price.  Each transaction costs the seller $0.30 transaction fee in addition to a 2.9% fee.  So on a $10.00 sale, PayPal takes $0.59 right of the top. This is nearly 6% of your profits, though the $0.30 is per transaction, so the percentage drops if you have larger purchases. Then there are the issues of returns and damaged items in shipping.  It appears from my reading that when a customer has an issue with the order, PayPal removes the money from the sellers account quickly, and then the seller needs to resolve the issue with the consumer.  I think I can do without the headaches of being a Merchant. 

Til next week on the Ramble have a great week, and try and do something nice for someone.

Platforms and Hosts

This blog is a result of a college class I am taking online at Brigham Young University - Idaho.  We post a weekly reflection of our experiences, and since it is a class about creating an online business, it only makes sense that they reflection would be on a blog.  I am not a blogging individual so this is a new experience for me.
This week we explored website design platforms and website hosting platforms.  As a novice, it was a simple decision to go with an easy to use a
site like Wix.  Researching the various options was a journey of discovery.  I never knew there were so many places to design or build a website, or as many hosts.  There was a wide range of options, and many sites offered very similar perks, so it was a really interesting comparison to make.  If you are reading this post, then you probably know what I selected.  I was really leaning towards WordPres.org with Bluehost as the host, but the instructor advised us that the skill needed to create a WordPress site was a little more advanced, so if we didn’t have prior experience, we would find it challenging, and time-consuming.
I am eager to see what we learn next week and to see how I can personalize this page and make it my own.  I have invested a lot of time this week in researching and comparing, but I feel that I have learned a great deal.  A very satisfying week.
I hope you all have a great week.  See you next week here on the ramble.

Wholesalers, and Drop shipping versus Affiliate sales

This week's journey of discovery introduced me to 2 wholesale distributors.  My task was to explore the advantages and disadvantages of these 2 when it came to selling sunglasses.  One site, Alibaba, is located in China.  Their sunglasses were much less expensive, and the had a very large selection.  The problem with ordering from them was shipping.  It takes at least a month to receive an order, and shipping is very expensive.  To order a dozen pair would cost over $550 for shipping.  Now they had some pairs that cost a few dollars, so if we ordered enough, the price became very competitive.  The other wholesaler, LA Wholesale, had much higher prices, over $20 per pair, but they had free shipping available on orders over $200, which with the minimum order requirement was any order.  Shipping was only a few days, depending on where in the country you lived.  It was very interesting to compare these two wholesalers, and I will look at several others if I decide to sell a product.  I learned that there is a lot of variety in wholesalers when it comes to costs and variety of merchandise.
Comparing drop shipping to an affiliate model for selling acoustic guitars was an eye-opening experience.  One source I listened to described his experience as a top rated Amazon affiliate.  He said he had a #1 rated site, and another highly ranked site selling high dollar merchandise ($200-$300) and last year he made a grand total of $200 profit.  He described a few of the pitfalls of Amazon as an affiliate site.  First of all, you receive a small commision (6%), so a $300 sale is worth $18.  Now with high volume this sounds pretty good, but there was another problem.  He only got credit if the person purchased when he first was linked to Amazon form the affiliate site.  If he left the site and came back later, no commision.  Most people don't impulse buy for large ticket items.  They may look, go check other sites, then come back to buy.  Some of the other affiliates I explored had better terms, such as giving you credit for purchases made after the first visit, even up to a month later. Most of the affiliates paid commisions monthly, and only after a minimum threshold was reached.  Certainly not a big money proposition, but a safe and reliable way to make a few dollars.
Drop shipping seems to be much more profitable.  The one guitar I looked at retailed for almost $100, and my cost was less than $50, so a nice profit.  Some of the drop shippers charge a fee to participate, while others added fees to each order.  Still, with $40-$50 profit per order, it looks to be a good way to go.  Of course, there is a downside.  If the customer is not happy with the order, you are now customer service with many drop shippers.  If the customer stops payment on his credit card or whatever vehicle he used to pay you, the money is returned.  Now in the case of this guitar, I have the $100 taken out of my account, and I have already paid the shipper $50, so my net on this transaction is -$50.  Any complaints or problems require your time to resolve, so there is a much larger time commitment involved, as well as the risk of losing money on a sale.  Comparing these two marketing methods just proves the old adage, "the greater the reward, the greater  the risk."
One very good thing came out of this exploration.  I found that one of the companies in the genre I am considering uses affiliates, and I plan on researching more in the field.  I may set up a website with multiple affiliate links, as well as offering a service or informational content.  I am looking forward to learning more so I am able to decide what to market, and how.
See ya next week

School Days

 4 May 2018

B-250 Web Business Creation.

I am taking this class online at BYU-Idaho.  One of the assignments is a weekly reflection of the class material posted on a blog.  This will be interesting for me, as I have only posted 1 blog post in my life, and it doesn’t feel very comfortable right now, but this could be the start of something new for me.

This has been an interesting week.  I have been exposed to things that I have never seen before, so the learning curve was higher than I am used to.  Ad Words was an interesting assignment.  We found keywords and apparently were able to form conclusions about web traffic and competition for each of the various words.  This will help us choose a direction to go when we begin to develop our online business model.  After reading several posts, as well as looking at the data, I think I am beginning to understand what it is telling me.  Deciding between chess or snowboards was a good assignment because of the many differences between the two.  I am really curious to see how the results are when we target our own idea or ideas.

Following the further adventures of Amy, Joe and Trevor is a good vehicle for discovery.  It adds a nice element to the assignments where we can see a practical application of the concepts we are reading about, instead of just reading a concept, and exploring it.  I am looking forward to finalizing my business ideas and choosing a model.  This could be the framework for an income stream in my retirement.  My wife and I have often discussed starting a business, and a web-based business makes a lot of sense in today's’ high-tech world.  This class will force me (and us) to do some brainstorming to narrow the focus of our product or service.  As my wife is a very crafty person, as well as a quilter, this could also be a springboard for her to take her hobby and have it help add to our finances in our golden years