There are three basic types of business entity from a taxation point
of view. These are proprietorships, partnerships and corporations. For
the greater part, it is local law that determines the type (sometimes
called the form) of business enterprise.

A business entity that
has only one owner and has not incorporated is called a proprietorship.
A business with two or more owners that has not incorporated is a
partnership. Any business can incorporate and thus become a corporation
under local law, regardless of the number of owners.

The type of
business entity you select for your business will have significant
federal income tax consequences. Proprietorships and partnerships that
have not incorporated will not pay any separate income taxes on
business profits. Their profits or losses will pass through to the
owners, who must declare these income / loss items on their personal
income tax returns and pay tax accordingly. In general, the owners of
an unincorporated business can transfer property to or from the
business without this being recognized as a taxable transaction.
Unincorporated businesses may have two significant disadvantages that
are not directly related to taxation.

One drawback with being an
unincorporated business entity is that when significant capital needs
to be raised, willing outside investors could be difficult to find. The
other disadvantage concerns liability. There is simply no way to escape
unlimited liability; the owner of a proprietorship becomes personally
liable for all the debts and liabilities of the business. If there is
more than one owner, it would be preferable to have at least one of
them with the personal capability to absorb unlimited liability for all
claims against the business.

In an increasingly litigious
society, it is best to protect oneself by placing some limitation on
personal liability. This is the attraction offered by incorporation,
since it provides investors limited liability from claims. The
corporation has thus become a popular form of business entity. For a
widely held business enterprise, incorporation will make it easier to
obtain financing, because it is easier for investors to put money into
the corporation through buying debt and equity securities that the
corporation is authorized to issue.

However, if the business
entity is a corporation, its earnings- including dividends – will be
subject to federal income tax. Once the shareholders receive the
dividends, they also have to pay personal income tax. In other words,
the income gets taxed twice. If the corporation incurs losses, the tax
benefit will remain with the corporation, but cannot be used to reduce
the personal tax liabilities of the owners.

The newer form of
business entity is the limited liability company (LLC). A LLC is in
essence a partnership in which there is no general partner. Its owners
have no personal liability for the debts of the business. Federal tax
laws do not recognize the LLC as a separate type of tax entity and most
are treated as partnerships for federal taxation purposes. In terms of
flexibility, the LLC has an advantage over the S corporation, because
their ownership requirements are less rigid and they have more
flexibility in allocating profits and losses among the owners.

The
S corporation, however, has several advantages over the LLC. It will be
easier to convert an existing C corporation to an S corporation than to
a limited liability company. As a business entity, the S corporation
provides a greater level of certainty in jurisprudence than the LLC
does.

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A nice little treat for anyone reader of this blog who is setting up a drop ship business.  You can get a free tax consultation from The Tax Club.  Here is my take on The Tax Club.

Those small businesses and individuals that have been worried about taxes and their responsibility to the IRS need not worry any longer thanks to the help from the Tax Club. The services provided by The Tax Club are specialized and focused on the tax responsibilities of small business and individuals. The firm knows how to help small businesses and individuals with all of their tax needs and for a small monthly fee clients receive all the help they could ever imagine, not to mention answers to all of their questions.

The reason the Tax Club is such a great option is because clients are always number one and a tax advisor is always available to allay clients’ fears and answer their questions about taxes. The Tax Club wants tax advisors to be available for clients and to help them by whatever means necessary. There are certainly other firms out there that provide this type of service, but for a very hefty fee. That’s not the case with the Tax Club at all because a very affordable fee results in significant help with taxes for both individuals and small businesses. A fee is charged on a monthly basis, that is very affordable, and results in the wonderful help businesses and individuals are looking for when it comes to their taxes. Since clients of The Tax Club have access to a tax advisor and can afford to continue with the service every month these folks are simply more successful. And, who wouldn’t be with access to a tax advisor via the Internet or by phone that can answer all tax questions?

Clients of the Tax Club also benefit from the Tax Portal, which is simply a safe place on the website that offers incredible benefits to clients from bookkeeping to documentation and more. The Tax Portal is secure and encrypted so clients feel secure entering their private information. Through this portal it is easy for clients’ tax information to be updated and original documents aren’t necessary. This makes clients happier because their original documents are retained in their possession.

Members of The Tax Club also have access to the “Members Only” area on the website, which contains invaluable information for clients. All the tax questions that a small business or individual might have are answered on this website. Knowing how the IRS works in relation to oneself or one’s small business is important and the information is located in the “Members Only” area.

With the Tax Club small businesses won’t be wondering if they are paying more taxes than is required because the company ensures clients that all possible deductions will be used. So, clients are happier, the Tax Club is happier, and everything just works in harmony. A monthly fee is all that is required of small businesses and individuals to receive all the important tax answers they will ever need from the Tax Club.

Visit the site and fill out the form for a free tax consult.

dropshipping, home based business, online business internet, wholesale

When dropshipping you are selling products online, and most of the time the product line is very similar if you have narrowed down your niche.  My point is most dropship sites have one main keyword that could be used to describe the site.  When you are looking for a domain name for your drop ship site I really would suggest finding a domain name that has the main keyword (in it somehow or form) you are focusing on for several reasons.

The first reason would be for the obvious branding recognition when people come and visit your site.  The second reason would be for the search engines.  It is much easier to start ranking sooner then later on the search engines for your domain name (cause you are the authority) so if you are picking a keyword phrase for your domain name (or have it in it) then it becomes much easier to rank for that name if you (or if you have someone) who knows what they are doing with search engine optimization.

I love sites like www.domainsbot.com to help me find domain names.  It tells you what is taken and gives you other choices based on your first suggestion.  It really can help you narrow down a good domain name for your site.  If you want to get started and purchase a domain name then visit the link.  Again, just keep in mind to look for a domain name that has your main keyword phrase in it (in some form or another).

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When setting up a dropshipping site the most time consuming task is adding in the products.   I will never do it.  I refuse to!  I hate (with a passion) adding in products.  I feel that taking the time to add in products wastes my time from more important business tasks at hand (like marketing the site to make money).

Most people are not aware that there are services out there that will help you with the frustrations of adding in products (and at a “cheaper then you might think” cost).  I use three main free lance websites to hire out all the (as I call it) grunt work of adding in my products.

1. http://www.elance.com
2. http://www.guru.com
3. http://www.getafreelancer.com

All of these sites are free to join, and are really simple to use and understand.   There is a few things to point out that will make using them to find people to add in products for you a much more pleasant experience.

• Look at the feedback of the person you might be using.
• Ask for sample work
• Find out what shopping carts (or systems) they are familiar with
• You can view the past work and get an idea as to the “normal cost”
• Do your homework and research all your options with free lance workers

When I have used these services in the past for the sites that I have set up that sell products most of the time it ends up costing about a dollar a product.  If you have 200 products to add in – then you pay 200 bucks.  Really not a bad deal for you to get it done in a day or two, rather then several weeks if not months for you to do it yourself.

You need to start focusing on the tasks that are going to be making your business money, like marketing and search engine optimization. To learn more about search engine optimization, and Internet marketing you can read this helpful SEO Blog and start focusing on the things that really matter when it comes to making money with your business.  Think about how much time you can save if you are focusing on the marketing rather then the “grunt” work.

It’s just an idea!

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When I am working with those clients that are brand new to drop shipping often times I have to remind them of a few things to have in place before actually establishing the relationship with the supplier.  I want to share something really quick that every person wanting to get into drop shipping should have set in place prior to working with the supplier.

You must have your business name and Tax ID set up in order to work with the suppliers on our dropship list.  I did a post a few weeks back on setting up a business, and more specific how to set up a Nevada Corporation for free.  I really can’t tell you what business to set up, but I can tell you that you need to be a legal business in order to work with supplier.  They need to protect themselves, and you need to protect yourself.

If you have a person that does your taxes then I would contact them for more information on setting up a business, or visit some of the links above about how to set up a corporation.

This may seem like an obvious step, but I work with a lot of people who are trying to work with the suppliers (and set up the relationship) way before they are ready to.  You want to look like a pro to these guys (even if you never have done it before) and this is a step to help you accomplish this.

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I want to share a quick drop ship tip when it comes to your e commerce store and selling products online.  Keep your products up to date.  Most suppliers will give you email updates and access to the new products the offer, but often times I find suppliers slacking in the area of helpiing you stay up on current products.  My advice is to constantly stay up on your suppliers, and contacting them, and establishing that good open relationship where you always know whats going on with your products.

If you have an online area where you gain access to all your product lists and information, then make sure you are logging into them at least once a week to make sure no new updates have been made.

A lot of times I have found that technology is to blame as well.  Your supplier could have sent you an email with all of the product updates, but the email could have got captured by a spam filter or something.

Keeping up to date with all this product info could help reduce problems with customers in the future.  If you have all the correct product info, pricing and models then you really don’t need to worry about surprising your customer.  You also don’t have to worry about selling products at the wrong price.  I have found a lot of suppliers change the pricing on your in your back end, and fail to let you know.

To avoid all the pit falls of working with suppliers, just remember to check in with them from time to time.

finding suppliers, home based business, selling products online wholesale

One of the best places to gain access to suppliers more then willing to sell their products to you is at a wholesale, dropship, or manufacturer trade show.  These trade shows take place all over the country from Hawaii to Las Vegas to New York.  An advantage of having access to The Shipper directories, is that we understand that not everybody can travel all the way to New York, Hawaii or Las Vegas every month (or whenever they end up being).   However; our full time staff is dedicated to bring you the best suppliers in the world, so we attend as many of these trade shows as we possibly can every single year.  We will continue to go to these trade shows and find the most amazing suppliers in the world to bring them to you!

That is one of the most amazing things about our dropship list – we never stop updating it and making it better.  You will find the products you are looking for to sell online, or we will find them for you.  One of the most comforting things that I can also offer is that we offer a full money back promise to you if we are not able to help you.  When working with The Shipper there is never any need to fear!

finding suppliers, product research, selling products online dropshipping, wholesale

The Problem:

Being in this industry for the last several years has been helpful for me in finding potential problems online with so called “wholesale” companies.  One of the main problems when searching the engines for wholesalers (that I see) is getting a list of companies that are not true wholesalers.  These companies just want to sign you up and take your money for a huge application fee knowing you will never sell any of their products because they are so high.  They make their money from your application fee with them.

You also have to be careful and watch out for the companies that say they will sell to you in wholesale, and you give them a lot of money for certain products and they never send them to you.  It is because they don’t have them and it was never their intent to sell them to you, but to take your money and run.

The solution:

Work with a company that is a member of the Better Business Bureau (like The Shipper) and who goes even beyond that for your security.  The Shipper has verified every single wholesaler that is on our list, and they are true wholesalers that will give you the bottom line pricing, and will not take your money and run.  This reason alone makes The Shipper worth the money invested for access to our database.

I know if you are new to The Shipper you are just taking my word right now, but we do offer a full week free to try The Shipper and see how you feel.  I am tired of people getting scammed out of hard earned money when it comes to finding wholesalers and products to sell online.  This is the main reason for this post, even if you do not purchase anything from The Shipper, then maybe you will think before spending money somewhere else (and get taken).

finding suppliers, product research wholesale

When you set up the relationship with the supplier it is important for you to know that the terms that you set up when first getting in with them are not set in stone.  You are able (and can) negotiate with suppliers.

I wanted to share an amazing story that was sent into me about this very topic of continuing to work out better relationships with suppliers:

“I visited the manufacturer company of the products that I have sold for the last two years, and met with the president of the company and showed him my search engine rankings, and made sure he knew the volume of sales (even a small operation) I was doing for him.  He was very pleased to see such rankings and good response for his product.  I told him that I would be able to sell more products and make him more money with the rankings I had, and my knowledge on the search engines if I only had better pricing.   We also talked about better offers on promotional items and ideas.  To make a long story short I left with the bottom line pricing that the best suppliers get, and items that he is giving me FREE to offer with every sale I make.  This is huge for me and I know my sales volume will increase and I will make so much more money, and grow my business even faster.  I just wanted to share this with others that own dropship businesses, and give them some ideas to approach suppliers and do whatever they can to get better pricing.  These guys need to know you are serious.  If you are brand new to this business, then be patient and just remember this technique and use it when its appropriate.  Thanks again to The Shipper for providing me the opportunity to get into dropshipping and turn this Internet business into a full time income for me and my family!”

The point here is obvious, so please don’t ever stop trying to work with your suppliers to get the absolute bottom line pricing they can offer you.  In many cases like the above testimonial it comes after many years of putting in the “work” and doing everything you can to make it happen on your own first.  The suppliers want to work with the companies that are making them money, and who are serious.  You show them you are serious about your business and they will do everything they can to help you be more successful.

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Just wanted to give another idea to making money with your online business.  Most people that read this blog are new to internet business, and are probably in the process of setting up a website (just from what I can tell in working with these clients).  There is a common misconception when it comes to what can and can’t be done online with your business.

I want people to use my dropship list to make as much money as possible, and right away.  However, most people that I deal with setting up a brand new business, do not think of other options to make money online while setting up their website.  I want to share some ideas that clients have been using to make additional income selling products online while setting up their website.

Just because you are setting up your website does not mean you can’t start selling the products on other places such as online auction sites (or buying solution sites).  If you have the relationship with the supplier and the business name and Tax ID all set up, then you are good to go for making money on places like eBay, Ioffer, Shopping.com, Shopzilla.com and other free buying solution sources like Google Base and Craigslist.

When creating a website there are certain things that just take time, like waiting for a shopping cart to be built, and while you are waiting for those kind of things, you should be spending your time listing the products you have access to on (at the very least) one of the above mentioned sites.   I get emails from people all day telling me about the money they are making because of these kind of sites.  With a little bit of research (prices, how many are selling it, what your margin is) you can be bringing income in this week with our dropship list.

I find the most common reason people do not put the effort into this method is because of time and feeling overwhelmed, but I promise you, once you start seeing products sold and the money coming in, then its all worth it.  It will fuel you, and help you continue the sometimes hard, long process of building an Internet business.

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