May 26

You’ve ordered a pretty dress online and it arrives at your home in fewer than two days. As a customer, you think that the ecommerce website probably sent an email to its warehouse. The warehouse staff then packed and mailed the product to the correct destination and you got your dress on time. That was then, but most ecommerce websites now use drop shipping to get their customers their products quickly and efficiently. You might be wondering what drop shipping is and how does it work but this is not something unique or innovative. The drop shipping method can save the retailer and the customer a lot of time and money, and it is effective.

So what is Drop Shipping and How Does it Work?

Traditionally, websites had local warehouses where they stored their goods. When customers placed an order, the POS, or point of sale, system on the website notified the warehouse and warehouse workers would pack and ship the item. However, this was expensive. It became even more expensive when large websites started stocking third-party goods. This meant they had to contact vendors individually get their goods and store them in a warehouse until customer orders came through. Drop shipping changed all that. The website no longer has to store goods and the vendor can store goods with them. When a customer order comes through the website, the website will notify the vendor and the vendor packs and ships the item to the customer. As everyone is invested in the process, vendors are paid quickly, the website gets successful, and the customer gets his product on time, states Flippa.

Does Drop Shipping Have any Benefits?

  • Smaller Inventory – For website owners, drop shipping is very useful. They no longer have to invest in inventory, as goods are stored with the vendor at the vendor’s warehouse. Website owners also now do not have to worry about maintaining a warehouse and warehouse staff, and it can save them a lot of money.
  • Expanding Website – The website owner can now retail thousands of products from vendors located all over the world and they do not have to worry about shipping costs.
  • Ready-To-Sell Data – As the goods are stored with the vendor, the website owner has no idea how the product looks. The vendor supplies a written product description, high quality images, shipping weight, dimensions, price and inventory. This can really streamline the website and ensure regular product updates on the website and high-volume sales.
  • Lower Customer Costs – As an incentive, most vendors also provide free shipping and on minimum orders or clubbed orders. This brings down the price of the item and it can be very good for the customer.
  • Immediate Shipping and Delivery – The POS system on the website can be completely automated and sales are processed quickly. For example, when an order is placed for ‘x’ vendor, the POS notifies the vendor. A shipping label and invoice customized to your ecommerce store is supplied to the vendor who will ship the item immediately. As orders are placed and processed quickly, shipping and delivery is fast and effective.
  • Highly Scalable – Drop shipping has no limits. It can be used to ship small items like clothes and shoes and large items like washing machines, air conditioners and even refrigerators depending on the vendor and his shipping costs.
  • Reliable Model – Drop shipping is reliable and website owners can trust the vendors to pack and ship items quickly to maintain sales and their personal reputations.

Drawbacks of Drop Shipping

Drop shipping does work but it is by no means a perfect solution. For website owners, the problem starts with no control over the shipping and delivery process. Sometimes, the supplier or the vendor may run out of products and this may result in a shipping delay. The supplier or vendor will charge you, the website owner, shipping and storage charges and this may add to your overall costs. As a website owner, you cannot change the overall cost of the product, as the vendor determines price, and this may affect what discounts you can offer. However, these are small drawbacks that can easily be overcome by a hands-on website owner.

Will Drop Shipping Work for Retailers?

Shipping and delivery are a critical aspect for any website and if the business can deliver goods quickly and accurately, it can make the website an immediate success. Drop shipping is popular as the vendor is motivated to ship the items quickly and it does ensure success. However, it is not right to assume that every eCommerce website will switch over to drop shipping, as large retailers like Amazon still prefer to pack and ship their items themselves. Drop shipping is an affordable and simple option for new websites and it can ensure that goods reach the customer on time but the actual choice of a shipping method will depend on the website and its goods.



written by Joe

May 24

I happened to be looking at my iPhone to get to my local Trader Joe’s via back roads from where I was. The map program offered me the Yelp review of my store and I decided to take a look. What I found was the strangest mix of commentary with a remarkably low signal to noise ratio.  The first one that popped up was 4/5 stars and reasonably to the point. The second on the ‘recommended’ list was a 1 star review in which the author droned on for 440 words. He discussed the awful parking lot, the soccer moms, the crying babies, and finally got around to the stuff for sale. “I will concede that the food is good – especially the wide selection of uppity olive oils and cheeses of which I am a huge fan.  And the beer is good.  And the wine is good.” A couple dozen words in three sentences. Only this location has no alcohol license. No wine and no beer.

traderjoeAnd “the way too small” parking lot is quite enormous, I’ve been there often as there’s a Staples, a Pier 1, and other stores my family likes. Never a problem with the parking. To be fair, not every last review is this way, but for this store, more than half were.

I was compelled to look at other stores I’d been to, along with a few restaurants. Same for most of them. I understand you might not like a restaurant, supermarket, or other business. No problem with that. If half the reviewers on Yelp would stick the point, and not review the neighborhood, the cars, the parking lots, it might become a useful site.For now, it seems a site where people simply go on off topic rants about whatever they wish, unrelated to the establishment they are reviewing. A remarkable waste of my time.

Worse, Yelp has gained a reputation for burying good reviews of businesses that don’t pay for their service.  It’s pretty apparent when you go to the reviews buried as ‘not recommended,’ if you can find them. Most curious to me is how long Yelp will even be around. A $4B valuation for a company that continues to spend more on marketing than they book in revenue. Remember, advertising dollars are not unlimited.  Businesses spend so much each year and that’s divided amongst all the print and on line places trying to sell ad space.

written by Joe \\ tags:

May 24

Today, a guest post from Crystal -

Buying your first car is a major milestone, but it’s also a significant purchase that can have long-lasting financial repercussions. You’ll want to choose a vehicle that suits your lifestyle and budget, both in the short and long term. For first-time buyers, navigating the ins and outs of car ownership can seem like a daunting process. Fortunately, there are numerous options are your disposal, particularly when it comes to financing. Keep the following tips in mind to stay firmly on budget.


Image Source: Wikimedia Commons Public Domain


Check your credit rating.

If you’re fresh out of school and have just started your first real job, you may not have much of a credit history to speak of. Check your credit rating to find out if there are areas with room for improvement, because this factor will have a major impact on your ability to obtain sensible financing.

Set a budget in advance.

When you’re comparing cars, you probably are already looking at sticker prices on sites like Carsales that fit within your budget. You also need to look not only at the bigger picture but at the monthly breakdown of car ownership, and stick to your guns when the time comes for negotiation. A good general rule is not to agree to monthly repayments that cost over 20% of your disposable income. This figure should include the car repayments, fuel, and insurance. Look at your finances carefully and choose a maximum figure that you’ll be able to afford.

Stay away from dealer financing.

There’s a definite appeal to obtaining your financing from the car dealership, as this allows you to walk out the same day with the keys to a new car. However, you’ll usually pay extra for this convenience, because financial institutions may offer you more advantageous rates. Before you visit the dealer, at the very least you should obtain quotes from other sources so that you know what your options are. This gives you more room for negotiation with the dealer, and can spare you the extra financing charges that dealers would charge.

Compare loan terms and interest rates carefully.

Whether you approach banks or auto dealers to obtain quotes, you’ll be faced with a variety of loan options. Two areas to look at are interest rates and loan terms. A common mistake for first-time buyers is to agree to a longer term in order to cut monthly repayments, but you’ll pay a lot more in the long term if you go this route. Ideally, your loan term should fall within the 3-5 year range. Similarly, interest rates could vary quite a bit between lenders so try to source several different options to get the best rates. The higher the deposit you’re able to pay, the lower your interest rates will be.

Read the fine print.

When you agree to a car financing plan, you’ll be offered additional services such as payment protection insurance or gap coverage. Be sure to read the loan terms and conditions carefully to avoid paying for these without your consent, however. Lenders may also slip in additional charges such as early repayment or administrative fees. Read the contract from beginning to end, and always ask if you see terms you don’t understand.

By taking the time to set a budget, search outside the dealership for a loan, and read all terms and conditions carefully, you can set yourself up for a better deal on your first car.

written by Joe \\ tags: ,

Apr 19

For as long as I could remember, a cancelled debt came with a tax bill. If you defaulted on a loan, the discharged debt amount was treated as income and taxed at your marginal rate, i.e. simply added on top of your income and taxed. Soon after the housing crisis of 2004-5, congress passed a waiver so those who lost their homes didn’t find insult after injury, and were not taxed on their discharged debt.

The new proposed code will extend this rule until the end of 2017, presumably long enough for those in difficult economic times to get back on track.

In theory, I think this forgiveness is admirable. In reality, it creates the ongoing risk of moral hazard. Banks should use proper criteria to qualify mortgages conservatively, and borrowers should bear some responsibility to not get in over their heads, walking away scot-free is getting off a bit too easy, in my opinion.

That’s it, the last of my Government Budget 2015 series. I hope you found a few bits of code that were of interest, or better still, might benefit you.

written by Joe \\ tags:

Apr 18

The American Opportunity Tax Credit is a College Tuition benefit. Specifically, Taxpayers may claim an AOTC for 100 percent of the first $2,000 plus 25 percent of the next $2,000 of qualified tuition and related expenses (for a maximum credit of $2,500) per student.

This is not a deduction, but a credit, in effect, you are being handed $2500 towards the first $4000 in college expenses. As with many such benefits, this one is phased out for singles with AGI from $80K to $90K and for joint filers with AGI from $160K to $180K.

The AOTC overlapped with the Hope credit and Lifetime Learning Credit, each of which comes with its own set of rules.

This proposal eliminates the sunset rule, making the AOTC ‘permanent.’

A good change, if it passes. Come back tomorrow, time to put a close to this series.

written by Joe \\ tags: