People are always trying to avoid getting their Reseller’s Permit and Tax ID Number.  They’ll send Research Requests asking for suppliers who don’t require it, or will only sell on eBay and never open their own website because they don’t want to register their online business.  Avoiding getting your Reseller’s Permit and Tax ID Number isn’t doing yourself any favors.  In fact, it’s a real detriment to your business.  Getting the proper documentation should be the first step in starting your online business – you should do it immediately, not try to avoid it.

What is a Reseller’s Permit?

A Resller’s Permit or Resale License is required if you sell or lease personal or tangible property: you need a Resellers Permit if you are a retailer or wholesaler of taxable items or services.  The point of the Reseller’s Permit is to avoid paying sales tax on items you are going to resell (you don’t want to be charged taxes twice on the same item).  Reseller’s licenses vary state to state: you can either apply for one through the many, many companies offering their services online (for a fee), or you can download the form from your state revenue agency website.

What is a Tax ID Number?

A Federal Tax ID Number or “Employer Identification Number (EIN)” is a number assigned to your business by the IRS.  Any business offering products or services that are taxed in any way needs to get this number.  To get yours, simply apply online at the IRS website.  It’s very simple; in fact, you receive your number immediately and can download and print your confirmation notice.  If you have any questions or concerns about Tax ID numbers, contact your nearest IRS Field office or call the IRS Business and Specialty Tax Hotline (800-829-4933).

3 Reasons Why You Need Your Reseller’s Permit and Tax ID Number:

1. Legitimate dropshippers and wholesalers require them.

If you want to work with a quality supplier, you need to provide them with your Reseller’s Permit and/or Tax ID Number.  Suppliers who don’t ask for these are probably middlemen, not legitimate wholesalers or dropshippers.  Thus, asking to work with a supplier who doesn’t require the proper documentation is basically asking to work with a middleman.

2. Setting up your business properly allows you to take advantage of tax breaks.

Small business owners get a ton of tax breaks.  I don’t know why anyone who’s not selling designer marijuana would operate their online business “under the radar”, disqualifying themselves from all the government bursaries and benefits according to small businesses.  As a business owner operating out of your own home, your phone, internet, and even a portion of your rent could qualify as write-offs, not to mention all the other expenses that come along with starting a new business.

3. You could be subject to fines and other penalties if you fail to register your business properly.

You can’t legally sell property without a Reseller’s Permit, and you’ll probably have to file your taxes fraudulently at the end of the year without your Tax ID Number.  It’s a lot easier to set this stuff up in the first place than to scramble to get it later when an immediate need arises.

home based business, online business

photo credit: alamosbasement

If you’re anything like me, forms that come with numbers and acronyms on the top make you want to bathe your eyeballs in vinegar.  But if you’re serious about your online business, you’re going to have to file a few of them.  I receive the most questions about tax ID numbers, reseller’s permits, and LLCs.  I’m not a CPA or an attorney, so I everything I say is purely my understanding and my opinions, but here are the basics of how they break down:

Tax ID number: A Federal Tax ID Number or “Employer Identification Number (EIN)” is a number assigned to your business by the IRS.  Any business offering products or services that are taxed in any way needs to get this number.  Many dropshippers and wholesalers will require it to do business with you.  To get one, you can apply online at the IRS website.  It’s very simple; in fact, you receive your number immediately and can download and print your confirmation notice.  If you have questions or concerns about the form, you can contact your nearest IRS Field office or call the IRS Business and Specialty Tax Hotline (800-829-4933).

Reseller’s permit: A resller’s permit or resale license is required if you sell or lease personal or tangible property: you need a resellers permit if you are a retailer or wholesale of taxable items or services.  Reseller’s licenses vary state to state.  You can either apply for one through the many, many companies offering their services online (for a fee), or you can download the form from your state revenue agency website.  The reseller’s permit allows you to avoid paying sales tax on items you are going to resell.  Also, many wholesalers require you to have this permit.

LLC (Limited Liability Company): An LLC combines aspects of partnerships and corporations: its owners have limited liability for the company’s debts and obligations like shareholders in a corporation, but its income and losses are passed through to the owners like in a partnership.   It is much less formal and more flexible than a typical corporation.  The benefits include separating your assets so you’re protected in case your business gets sued.  It also provides some tax breaks – you are only required to pay taxes on your earnings once instead of paying both corporate and individual taxes.  The downside of an LLC versus a corporation is if a member of the LLC dies, leaves, or goes bankrupt, the LLC is usually dissolved.  To set up an LLC, you need to file Articles of Organization with you state (usually through the Secretary of State).  You can hire an attorney to do this, or you can do it yourself (there are numerous do-it-yourself kits to help with this).  When I have legal/business/accounting work, I like to do it myself, then hire a lawyer or CPA to check it over.  That way I only have to pay for a little of their time, but I can be sure everything is correct before I file it, saving time and money in the long run.  You might consider making your dropshipping business an LLC if you want to reap the tax benefits (this would be important if you expect your earnings for the year to be quite high).

photo credit: Rodrigo_Amorim

If you have any other questions about tax ID numbers, reseller’s permits, or LLCs (or anything else), feel free to email me at support@wholesalematch.com or to post below the blog.  If I don’t know the answer, I can research it, and we’ll both learn something new!

home based business, online business

No matter how hard you try to please your online business customers, you will inevitably tick some of them off (for every ten sweet little Charlotte Churches there’s a Mariah Carey just waiting to explode if you don’t pick every last purple Skittle out of her candy bowl).  If you care about customer retention and word-of-mouth at all, you need to have a plan in place that dictates how you’ll respond to customer complaints.

5 Essential Customer Service Tips:

Tip #1: Be Available

When someone is already annoyed by your product or service, the best way to make them furious is to neglect to have a “contact us” or “customer service” button on your website.  The optimal situation is to have a call center where they can call and speak to someone directly, but if that isn’t tenable for your business, an email address will suffice.  If you go this route, it helps to state clearly that “questions and comments will be answered within one business day” (that means you actually have to do it).  If you decide to go the livechat route, please for the love of Heaven get an operator who can type quickly.  When I contacted Bloomex to complain that my aunt’s birthday orchids were never delivered, I could have driven up to Canada and dropped the flowers off myself in the time it took the operator to type her response (see – and now I’m burning the company in my blog).

Tip #2: Don’t Judge The Validity Of The Complaint

Maybe the complaint is a solid one: the laptop you sold them arrived with a smashed screen.  Maybe it’s entirely spurious: they don’t like the color of the box it came in.  It doesn’t matter.  Whatever the complaint is, it obviously bugged your customer, and might cause them to delete your address off their toolbar and slander you on every message board they can find.  Don’t try to tell them it doesn’t matter; figure out how to fix it.  Which brings us to tip #3:

Tip #3: Have A Policy In Place

You don’t want to be inventing something on the spot while an irate customer is screaming in your ear.  Also, you don’t want to be bullied into promising something unreasonable.  Have a plan in place for common contingencies so you can calmly and kindly inform your customer that the company’s policy in that instance is to…

Tip #4: Be The First To Suggest A Solution

Don’t wait for the customer to tell you that they want a full refund.  Instead, offer a replacement product, a discount on their next order, or whatever policy you’ve decided on.  Sometimes, an apology is all that’s necessary (in case of poor service, for instance).  Offering a solution will help diffuse the situation by assuring the customer that you are taking their complaint seriously and will work to resolve it.  Asking what they would like you to do opens the door for them to demand maximum recompense.

Tip #5: Be Polite, But Not A Punching Bag

To put it bluntly, some people are jerks.  It doesn’t matter what you do for them, they’re still going to leave with a bad taste in their mouth.  This is just my opinion, but you don’t need the business of that tiny minority and you probably couldn’t keep it even if you wanted to.  So I would never sit and listen to a string of profanities or threats.  You can calmly inform the customer that they are welcome to call back once they’ve cooled down, and hang up the phone.

Customer service is the backbone of any strong business.  In online business, customer service often takes the form of resolving complaints.  Because you’re not in direct contact with the customer when they find your dropshipping website and order the product, there are few customer service initiatives you can implement besides thank-you emails and so forth.  Usually the point where you have direct contact with a customer is the point where they call to complain, so use that opportunity to wow them and boost your repeat business percentage.

home based business, online business, selling products online blog, dropshipping, online business, website, wholesale

Online business can be different from brick-and-mortar business, but it does not differ in one respect: it is no easier or less complicated than “real world” business.  The following are tips for making your online business successful by following solid traditional business techniques:

Tip #1: Plan And Prepare. Before you put finger to keyboard regarding your online business, you should have a well formulated business plan.  This should include financial and marketing plans.  You need to have a clear and solid budget, so you know exactly how much you can spend on things like website development, finding suppliers, and advertising.  A lot of people mistakenly believe that they will be able to get into e-business without spending a cent.  This is a fallacy.  While there are many things that you can do yourself for free and a lot of information available gratis on the internet, there are other things you are going to have to pay for.  You may need to set up a line of credit with the bank.  You may need to be able to live partially or entirely off savings if you are not able to give full-time hours to your day-job and full-time hours to developing your business.  As far as your marketing strategy goes, it’s not enough to have a great product.  You need to know how to promote it.  Your strategy should take into account the strengths of your product, your competitor’s weaknesses, and your customer’s needs and desires.  People aren’t going to buy from you simply because you’ve posted a product on the internet.  There needs to be a clear motivator for them to use your services over all the others available.

photo credit: freddthompson
Tip #2: Get Some Help. Going it alone is hard.  Do you know someone who has successfully opened a similar business?  Is there anyone who can mentor you?  What services are available in your community?  One option is to volunteer your company to be a case study at a business school.  Business students will examine every aspect of your online business and inform you where your strengths and weaknesses lie.  They will often provide you with a full report of what you can do to improve your business.  You can also use Small Business Development Centers (find locations at www.sba.gov).  Join entrepreneur groups and small business clubs.
Tip #3: Build Relationships. You need to have a real and solid relationship with every single person you work with.  Your suppliers and customers are not simply tools and sales.  Your dropshipper or wholesaler is part of your team, and should be treated as such.  Communicate with them.  Use more personal methods such as phone calls in addition to email.  Show your gratitude when they do their job well, and make sure they are always, always paid before you pay yourself.  Likewise, let your customers know that you appreciate them, and do what it takes to make them happy when something goes wrong.  Taking a small loss is preferable to being blasted in customer satisfaction ratings and by word of mouth, and losing all possibility of future business.  Above all, be professional.  Having a good business relationship with someone doesn’t mean you can send them a slap-dash email with no capitalization and a dirty joke halfway through.  There are more deals lost through poor writing skills than you can possibly imagine.  Keep your messages clear and concise, take the time to proofread, and when in doubt, err on the side of formality.

photo credit: BodogGirl
Tip #4: Go The Extra Mile. If you want people to take your online business seriously, YOU need to take it seriously.  Don’t have customer emails sent to sexypants_rockstar@yahoo.com.  Make sure you get a business email, preferably one that matches your business name.  See if you can purchase a domain for your website that comes with business email accounts.  Also, include networking in your promotional efforts.  Join sites like LinkedIn.  This is a social networking site specifically for business people, and can help connect you with suppliers, buyers, and people who can give you good advice.

photo credit: Zanastardust
Tip #5: Hire A Lackey. When your workload gets past a certain point, don’t be afraid to hire an employee.  But be warned, you are trusting this person with your business.  Find someone affordable, but quality.  Consider a stay-at-home mom, formerly a powerhouse in the industry, now willing to work for you so she can organize her schedule around her two year-old.  Use an immigrant (a legal one, obviously), or a graduate student who needs work experience hours.  These are all people with excellent skills and experience who are more flexible than your average 9-5er.

Your online business may exist almost entirely in the virtual world, but there is nothing more real than the hard work you’re going to have to put into it.  Treat your e-business like a real business, and you are sure to succeed.

home based business, make money online, online business, selling products online

Due to the popularity of our online business success stories blogs, I’m posting a second installment of anecdotes for your pleasure and edification:

Success Story #1:
Wanda Silva started selling on eBay as a way to help cover the grocery bills while staying at home with her son.  The first thing she sold was her son’s old winter coat, and when she received $20 for an old coat she originally bought for $29.99, she was inspired.  She began selling everything and anything she could find in the house, and when she had cleaned out her unwanted items, she turned to clearance sales to find products to sell for a profit.  She made the jump to dropshipping and wholesaling on eBay by finding an excellent supplier for garden flags, opening a store called “My Silver Toe”.  She soon expanded to a wide range of garden and home décor items, and watched her sales take off.  She credits her success to keeping herself organized with online programs and spreadsheets, and keeping her workload low by streamlining her online business (important as she soon had a second child on the way).  She used tools like endicia.com and free USPS pickup to help make her job easier.  She also recognized when it was time to graduate from the eBay “sell your item” form to Turbo Lister, and then to Sparedollar.

photo credit: brad montgomery
What did Silva do right? First, she started small.  She didn’t jump into eBay sales with huge, high-priced items.  She practiced with small, cheap items until she got a good idea of what works and what doesn’t.  This kept her costs low when she was in the early stages and prone to make mistakes.  Second, as her business began to expand, she remained flexible and organized, and used tools to keep things running smoothly.
Success Story #2:
Rena Klingenberg was also a stay at home mom, trying to run a jewelry business but finding it difficult to balance against her son’s needs.  In order to develop a second income so she could scale back on her jewelry business, she turned to info publishing.  Info publishing is a system where people who are knowledgeable on a certain topic build a website with free helpful articles focused on that topic.  They earn money by including a small amount of related advertising.  Obviously, Rena chose jewelry-making as her topic, and launched “Home Jewelry Business Success Tips” in October 2003.  She used a website building tool called Site Build It (SBI) to bring her website into the top 1% of web traffic.  This was key, because the amount of traffic your site gets determines what you can charge for advertising.  Rena expanded her new business to six different informational websites.  She gives all the credit for the success of these websites to the SBI tool, which packages various types of search engine optimization (SEO) with website hosting and numerous site-building tools like the newsletter publishing tool.

photo credit: lovinlife_rightnow
What did Rena do right? She found an online business model which was well-suited to her talents.  Most importantly, she found programs to help her build, manage, and promote her website.  Doing everything on your own is hard, and no matter how hard you work, it remains inefficient.  If you want to make money online, you HAVE to get your website noticed.  I can’t stress the importance of search engine optimization enough.  Rena’s use of SEO, particularly keyword searching, put her in that coveted top 1%, and was the real source of her income.
Success Story #3:
Deming Colbert was an economist at the U.S. Department of the Treasury when she began to design her own line of organic, concentrated skin-care products.  At first she produced and sold the products herself, but as sales increased, she found a manufacturer and began selling in mass on eBay.  Deming opened her PureDeming store on eBay in 2004. Her sales have grown an average of 17% annually since then.  Her success can be attributed to two main factors: her capitalization of the international market, and her customer satisfaction level which accounts for 70% of her customers returning as repeat buyers.  EBay has over 222 million registered users around the world, and Deming’s products became most popular in Japan, Europe, and Australasia as well as the large coastal cities of the U.S.  40% to 50% of her sales were international.  To help facilitate international purchases, she translated her shipping information into several different languages, and partnered with groups in Australia to distribute her product more widely.

What did Deming do right? One of her most important decisions was shipping to international customers in Europe, Japan, Australia, etc.  She recognized that the market for her products was primarily in large international cities, not spread evenly across the States.  Shipping to international destinations allowed her sales to explode, and brought in lucrative business partners who could handle some of the more difficult elements of international expansion.  Selling to international customers is not always necessary, but you have to consider the nature of your product.  It may sell better in other locales than it does in the US.

You may think that a jewelry blog or a skincare line is nothing like your online business, but each of these savvy women took intelligent steps that you can imitate.  All online businesses are alike in that it takes ingenuity, flexibility, and ecommerce smarts to make them work.

eBay, home based business, internet marketing, online business

You probably didn’t think much about taxes when you started your online business, focusing on the thousand things you had to do to get your business up and running, and maybe fantasizing about the kind of money you were going to make.  But now you’ve made some money, and you need to pay taxes on it.  The very thought of managing forms and deductions may make you want to crawl under the carpet, but fear not, because owning your own business can be a real boon come tax time.

4 Tax Tips For Your Online Business:

Tip #1: Get A TIN

Tax Identification Numbers are useful for filing taxes, and have the additional benefit of impressing dropshippers and wholesalers with the legitimacy of your online business.  When setting this up, consider carefully whether you want to be a sole proprietor or a corporation.  This is a complicated decision, and you may want to consult an attorney, but basically the difference is that a sole proprietorship is easier and cheaper to set up, but does not separate business assets from personal, leaving both liable to seizure.

Tip #2: Take Advantage

Now that you’re a small business owner, you need to pay an additional self-employment tax of 15.3% on top of your regular income taxes.  How is that helpful, you may ask?  Well, you also get a whole new set of nifty deductions along with your taxes.  These may include home office deductions, the cost of your equipment, business/travel related expenses, training/educational expenses, and payroll (even if your wife is packing orders in your garage, you can pay her $12/hour and write that off).  Keep in mind with payroll that you have to send your employees a W-2 form at the end of the year, or, if they’re an independent contractor like the guy who designed the website for your online business, you need to send him a Form-1099 if he did more than $600 worth of work for you.

Tip #3: Don’t Wait Until The End Of The Year To Start Paying Taxes

You may owe more than you think, and even if it’s pretty much what you expected, shelling out $14,000 in one shot isn’t going to be fun.  So pay an estimated amount every month.  If you pay too much, you can always file a return at the end of the year, and it’s a lot more fun to get a check in the mail than a “request” for funds.

Tip#4: Keep Records Like It’s Your Job, Because It Is

Keep track of anything and everything.  Use accounting software, or if you must, a super-sized filing cabinet, but if there’s any possibility you’re going to need a receipt, form, or even an email, then DO NOT throw it away.  In the Wholesale Match office we have a mini-scanner, it looks like an umbrella when it’s in the case, and we use it to scan and digitally file absolutely every piece of mail we get.  Keep the records for your online business at least five years, preferably ten.

These are a few tips to help you on your way, but laws differ state to state, and ultimately you should hire a CPA to look over your return, particularly your first year.  And remember, honesty is the best policy.  Fibbing to Uncle Sam to save yourself $800 is going to be the worst reverse-investment you ever made when the IRS rakes you over the coals.  Hell hath no fury like the taxman scorned.

home based business, online business

Many people who are in the beginning stages of starting an online business tend to ask themselves, “What do I do now?”

The step by step process of finding dropshippers can be easy… as long as you know what step to take next.  By visiting this Wholesale Match blog, you have already taken great measures to ensure your success in the e-commerce business world.  However, there are still many people who make a tremendous effort finding dropshippers only to find that they have no idea what to do next!

We have a few ideas about what might be holding you back.  Here are a few suggestions to stop the holdup and get your business moving!

• Get your ducks in a row! Once you’ve gone through all the work of finding dropshippers, you need to make sure your business information is organized.  Here are a couple things you should prepare for your business before you contact supppliers:
  • State Tax ID: Not all businesses will require a State Tax ID or EIN number.  However, you can be assured that most exclusive market niche dropshippers will require them.  Plus, it makes your business more credible by having one anyway!
  • Business Plan: Many suppliers would like to know a little bit about your business before they sign you up.  This is especially relevant to those with beginning businesses, since you will not have any business references that suppliers like to look at.
• Keep an Open Mind. An open mind is important at the beginning of an online business.  One of the biggest mistakes that early online business owners make is that they expect too much, too fast for too little.  Here are a few tips on how you can avoid this:
  • Keep in mind that dropshipping is almost a way for the supplier to do you a favor, since they will not require you to hold any inventory!  Because they are allowing you to sell their products without purchasing in bulk, you should expect the dropshipper to compensate in some way, either by raising their prices a bit or adding certain restrictions on your account.
  • Realize that great dropshippers are generally smaller companies.  This means that they may not carry the vast amount of inventory, products, or brands that you may be looking for.  Because you are looking for dropshippers, you should expect to sign up with multiple dropshippers in order to sell the product niche that you are interested in.

Don’t ruin your chance to make money after your effort of finding dropshippers by making these simple rookie mistakes.  In most business endeavors, it’s best to adopt the Boy Scouts of America’s slogan of “Be Prepared.”  Being prepared for business endeavors authenticates your professional demeanor, and makes a great first impression on dropshippers.

dropshippers, finding suppliers, home based business

Whether you’re starting a home based business, a scrapbooking project, or just trying to fix a personal workout routine, the beginning of any endeavor is the hardest part.  It takes organization, initiative, preparation, and most of all, creativity.  Anyone who has ever written a scholarly work knows that the hardest part of the entire project is picking a topic!

For home based business, the same applies.  The hardest part is deciding what to sell.  Since the decision on what type of products you would like to sell depends a bit on what type of suppliers are available, finding suppliers is also one of the hardest parts of home based business.

Wholesale Match is a great resource for finding suppliers, because you can research a variety of niches!  This is such a great addition to your home based business because you do not need to commit to a certain sphere before beginning.  Through a process of trial and error, you can find exactly what you’re looking for.

Our Product Research team is finding suppliers to add to our database daily.  They use their expert research skill to find you dropshippers, wholesalers, manufacturers and even affiliates for your online business.

finding suppliers, home based business

With a growing amount of the United States’ population becoming unemployed… many are turning to work from home opportunities for stable income.  One of the most convenient work from home frontiers is the online business.  Online businesses are amazingly flexible, allowing each individual business owner to customize their work experience.

Here are a few tips for turning your personal interests into work from home opportunities:

• Start a Blog: One of the greatest ways to get a start on your online business is to start a blog with one of the many free services available, like Blogger or Wordpress.  This is an excellent way to start because you will generate visitors that are interested in what you are writing about, whether it’s hunting or knitting.  Then, once you develop a website or find another venue to sell products online (eBay, Etsy), you can link your blog directly to your products for sale… giving you instant interest.
• Dropshipping: Once you are ready to sell products, dropshipping is a great way to go for beginners.  Dropshipping allows work from home businesses to sell products without holding inventory.  Once your online business grows and you are able to warehouse and ship your own products, you can then move on to wholesalers.

These tips can greatly improve your work from home business.  Starting an online business is smart… but it is not smart to enter the endeavor with limited knowledge or help on the subject.  With Wholesale Match, you can use our free trial to search for dropshippers for your online business, with absolutely no risk to you.

dropshipping, home based business, online business, selling products online

There are so many ways to make money online, one can easily become lost in the chaos of deciding how to start an online business.  However, dropshipping is one of the most flexible work at home opportunities that you will encounter.  Dropshipping allows you to create your own business with your own style, using personal preference to decide where you want to sell, what you want to sell, and how you want to sell it!  Whatever way you spin it, this is a greay way to make money online in your own free time and by your own standards.

Step One: You Decide You Want to Make Money Online

This is the first step in the process of starting an online business endeavor.  Making money online enables you to work from home, the office, or even public places with wireless internet.  Online business also allows you to set your own hours and policies: how and when you will work.  This can be both good and bad, because your own success depends on your ability to take the initiative.  Dropshipping allows you to make money online, but this is all proactive and must be done on your part.

Step Two: You Decide Dropshipping is a Great Fit for You

Having a dropshipping business is a great way to make money online, because there is so much flexibility in the whole process.  You can sell products on eBay, your own website, or even locally through newspaper and online ads.  You can also choose which dropshippers you work with and which products you would like to sell.  The whole endeavor is your creation!  Again, this is a choice way to make money online, but it all depends on your desire to succeed and your work ethic.

In order to aid you in your dropshipping endeavors… Wholesale Match has an extensive dropshipper directory to help you get the ball rolling.  Our services are proactive, which gives you to freedom to pick and choose everything about your online business

dropshipping, home based business, make money online, online business, selling products online