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    Not Only Sudents Are Cheating: Customer Frauds
       January 17th, 2008

    Today, every day people hear on the radio, TV and on the Internet about frauds. As far as the mass media is concerned people do believe these stories about people scammed and cheated by Internet fraudsters.

    The thing is that these stories are only partly true. TV seldom covers the other side of the coin. It looks as if ALL the Internet sellers are cheaters etc. Thus due to such a narrow vision of the mass media, reliable and honest Internet entrepreneurs lose money. I can assure you that the number of trustworthy seller by far outweighs the number of fraudsters.

    Still, another thing that you will never encounter in a magazine, newspaper or a TV show is CUSTOMERS cheating on sellers. But in reality, such incidents are not rare; nevertheless they are not paid much attention to, unfortunately.

    Even though I say that honest sellers make the majority of the market, there are always exceptions. Even as a seller you remain a customer. How? Well, if you are an Internet seller, you have to find the source of products (it can be a single source of a few of them). But you have to remember one simple thing: either you find a direct contact with the manufacturer or establish relations with an authorized representative you need to be sure of the quality and legality of the provided services.

    If you are somehow involved into the Internet business, you have to remember that you always remain a potential target of a fraud. In order to make sure you protection is at its best always use an AVS system when you charge your clients’ credit cards. Always confirm expensive orders before processing them. If a customer buys an expensive item from your Internet-store, contact him/her directly for the verification of the purchase. This was can help you avoid being paid by stolen credit cards. Another way to see a fraud is to look for multiple purchase of the same product by the same customer.

    Remember, if you are paid with a stolen credit card, it is YOU who will have to refund the owner of the card and the criminals will get away with your products. Thus it turns out that you pay for them.

    Never be afraid to contact the police or the bank that issued the card. As a rule, banks treat credit card frauds VERY seriously! Moreover, learn some things about protection applications like, for instance, EBay Safe Harbor etc.

    One more thing that I would like to draw your attention to: It is YOUR money that the fraudsters aim at. Just try to do your best to prevent the money taken out of your pocket.

    Price Cut Profit: Is Free Shipping Really Free?
       January 17th, 2008

    Let’s consider such an issue as FREE Shipping. Sooner or later each seller faces this phenomenon. It is not a phenomenon, actually, just one of the sides of the transportation and delivery “coin.” You would think (I mean that you think like a seller) that if you write “FREE shipping” on your web-page, dozens of new customers will immediately come there and buy more goods thus making you a millionaire.

    Well, to some extent it is correct. Each visitor is looking to buy items at the lowest prices imaginable. If he sees the motto “FREE shipping” he thinks that the purchase will deprive him of less money. But what does the customer do next? Customers are not blind, dumb or lazy. They will most definitely check the competitors! They are likely to look for different variants and find the cheapest or the most convenient for them. What really matter is the FINAL cost of the product, but not the offer to ship the item for free.

    So, let’s find out whether your price will be the lowest. If the customer doesn’t pay for shipping, then someone else has to. And who can possibly be this someone? I don’t see any other answer but the SELLER, which in this case is personified by YOU. So if there is Free shipping, you pay for it and thus you include the cost of shipping into the price of the product! What does it lead to?

    Believe me, sooner of later the customer will find out that the price of your product is higher than that of your competitor and do you really think that he will buy your product only because you ship it for free? In fact he can, but in reality it turns out that customers buy the product from the place they checks the last.

    And now let’s trace the sequence of his visits. If the customer sees that you deliver products to his porch absolutely free, he goes to your site first. Then he wants to check prices and goes to your competitors’ sites. He realizes that the cost is the same, but at the moment he is on the site of one of your competitors, so he buys the product from it. Not a good thing to hear, isn’t it?

    So instead of wasting time and effort on some vague scheme of attracting customers, try to focus on finding good and reliable product suppliers and creating a fast and user-oriented web-page with good customer service.

    Ecommerce Business License: Legalizing Small Business
       January 16th, 2008

    A lot of people want to start some kind of home-based business, but they simply don’t know where to begin. They get frustrated as the Internet is stocked with various schemes of starting Internet-based business.

    The problem is that they are so multiple and so various! The solutions provided sometimes go in full contradiction. I can try to give you a few pieces of advice on how to try to start such business. The one last thing you have to ask yourself: do I really want to be a self-employed and thus self-responsible individual? If yes, here’s the advice:

    I don’t know about other countries (and maybe a number of states within the US), but in general on the territory of the US the process is very similar (but, of course, for some minor local peculiarities I hope you will be able to deal with)”

    1.You have to legalize your business: file the business Entity

    Having such a status means that your organization is recognized by the government. There are 2 ways you can file it:

    A. File a Corporation. At the moment the majority of states have online forms for filing this type of organizations. You simply come to a web-page, fill in all the required information, pay the fee and in a few days you receive all the necessary paperwork.

    B. File a Fictitious Name. This way is cheaper but it doesn’t feature all the protections that a corporation does. In a number of states Fictitious Name comes under DBA (“Doing Business As…”). If you are not sure what type of business entity to file, you’d better see your accountant or attorney, for it may turn out to be a crucial decision.

    2.Get a Business License

    In a number of states you have to deal with a County Occupational License in the county your business is located (it costs around $30). In order to get the license you have to demonstrate your business entity papers. However, in a number of states this license is not required at all.

    3.Get a Resale Certificate

    In order to contact with a supplier (I mean a real product supplier but not a middleman for whom this papers doesn’t matter) you have to show your Sales Tax Certificate (Tax ID Number). Why is it required? The supplier will use is a proof to the IRS that they are not required to charge you tax on the products they sell you at wholesale

    4.Open Bank Account

    In order to open a bank account you’ll need you entity papers and Tax ID and sometimes a license.

    5.Start up a Merchant Account

    In order to open this type of account you’ll need all the above mentioned papers.

    Why are all these steps required? When you’re done you will be able to charge your clients’ credit cards. All the money transactions will be made through your Merchant Account, so you see that all these steps are inevitable.


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