March 21, 2002
Table of Contents
Quote of the Week
Staff Editorial -
The Hidden Cost of Internet Taxation
Tip of the Week
Guest Article -
5 Internet Myths Still Floating Around
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Quote of the Week
Whoever values peace of mind
and the health of the soul will
live the best of all possible lives.
- Marcus Aurelius
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your business! We are asking each of you to send us an email
and tell us about yourself and your business. We have added a
section to this newsletter where we spotlight your websites or
businesses so our other subscribers can get to know you and
possibly do business with you. This week we feature the first
three businesses that responded. We hope many more of you will
respond in the coming weeks. This is FREE EXPOSURE to THOUSANDS
of people! THIS IS VALUABLE so please act TODAY!
Just send your email to
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The Hidden Cost of Internet
by: Cary Christian
I don't know how many of you
have been following the status of Internet taxation. Most small business
people are too concerned with running their business and making a profit and
tend to ignore these arguments. While that is perfectly understandable, it
could also be a costly mistake.
A LITTLE BACKGROUND
Internet taxation would really be nothing more than the imposition of sales
tax on sales over the Internet. "No big deal," some of you will say.
After all, sales taxes do not really affect a business that adversely, do
they? You become a collection agent for the government. Your competitors are
collection agents, too, so they have no advantage over you. Consumers expect
it and do not normally factor it into their purchase decisions. So it's more
red tape but not really an additional cost.
Not exactly. Let's step back a moment and look at our macro tax situation in
the U.S. for an example. The United States actually has a low tax rate in
comparison to the rest of the world. But when people look at the rate of
taxation in the U.S. they generally only look at the income tax rates. Yes,
you pay federal income, state income, local income and social security taxes
and those rates are not that bad.
But one-half or more of every dollar you spend on gasoline represents
federal, state and local tax on gasoline. Half (or more) of the price of
cigarettes and liquor is tax. Take a look at your telephone and electric
bills. More taxes. Pay tolls to use any of the roadways in and out of your
city? More taxes.
Then there are permits and
licenses when you are born, when you start a business, when you own a house,
when you get married, when you sign up for garbage collection, and when you
die. (I probably missed a couple of hundred other examples of permits and
And, of course, there is the sales tax on almost everything you buy.
Additionally, taxes are a cost of doing business so everything you buy has
already been marked up to reflect the tax burdens on the businesses
producing the products you buy!
I did a study on the real cost of taxation to the average American a few
years ago. I don't have the final numbers in front of me, but suffice it to
say that the real rate of taxation of U.S. citizens is at least double what
the average person thinks it is. And it's no better, and often worse, in
other parts of the world.
The worst part is that most of these "hidden" taxes are regressive in
nature, meaning they tax the poor at a disproportionately higher rate than
State and local governments are facing lost tax revenues because more and
more people are purchasing tax-free on the Internet. That is why Internet
taxation is an issue in the first place. But I believe people everywhere
deserve the break. Let us have something in life that is tax free.
But that is still not the issue I want to address. All of the above sounds
bad, but we haven't even scratched the surface!
THE REAL PROBLEM
If you have never worked with multi-state or multi-national sales tax issues
before, you probably don't know how technically challenging and difficult
they can be. States fight all the time over who has the right to assess
sales taxes on particular transactions. The only problem is they don't fight
each other; they levy the tax on you and YOU have to fight each state
involved individually or end up paying tax on the same transactions in
multiple jurisdictions. And, of course, since you probably only collected
and paid the tax to one state, you'll owe substantial penalties and interest
in the others.
The Internet taxation moratorium was extended for another two years on
November 28, 2001. Hopefully, this will provide enough time to simplify the
administration of Internet taxation before it becomes a reality. If it
doesn't, every small business that sells on the Internet will need to make
sure it has two things:
1. Sophisticated and impeccable accounting systems to accurately
track sales tax liabilities and provide documentation for audit (money), and
2. Access to top-notch lawyers and accountants to guide them through
the mine fields of state sales tax audits (more money).
Make no mistake about it, a sales tax audit can put a small business OUT
of business PERMANENTLY.
Small businesses need to use the two years provided by the moratorium to
become educated on the issues and involved in their resolution. Getting a
permanent moratorium is most likely not going to happen. Getting some sane
laws on the books ought to be possible. Together, our voices can be heard.
We need to lend our voices to those who are calling for reasonable and
simplified solutions before it is too late.
Copyright (c) 2002
Tip of the Week
If you would like to add posting to safelists
to your marketing arsenal but are hesitant to pay $5 to $20 per list to join
a bunch of them as a pro member, try this:
Find ten or so smaller lists that allow you to post every day even as a free
member. If you get in early enough you'll get in for free and the lists will
grow over time. Try a couple of the lists that include links in the emails
you receive that give you sending credits. You'll be able to easily click up
enough credits to send every day and some of these lists are substantial.
Then, find 14 lists that only allow free members to post once per week. Make
sure these are bigger lists. Posting once per week can actually be an
advantage because people won't get bored if you use similar ads all the
Every day you post to the ones that allow you to post daily and to two of
the lists that allow you to post once per week. This should give you a
substantial number of postings daily for free.
Remember our tips in prior letters about posting to safelists. Make
your headline catchy and your message short and teasing. Don't try to
sell. Just get them to your website. You'll do much better promoting
something free posting to these lists. Make that "something free" a
sales tool also, like a viral traffic ebook or membership in a free downline
5 Internet Myths Still Floating
By Terry Dean
You would think that some of
the old Internet myths would just die off with the growth of Internet
commerce, but some of them just won't die. Even though you can't ignore the
growth of online commerce, businesses still believe some of the exact same
myths that were started years ago.
Let's put an end to some of them here and now...
Myth #1: No one is making money online.
This myth has been around as long as the Internet as existed. The
truth is that a lot of companies are earning incredible profits online. Some
of them even become extremely profitable within 6 months of being online.
An independent study has reported that 30% of Internet businesses are
currently earning money. This is an extremely large number considering the
fact that the Internet as a whole is still in it's infancy. Wait to see what
kind of results are going to be produced in the coming years and decades of
Myth #2: If you build it, they will come.
This is opposite of the first myth. You have one side who believes no one
can make money online while the other side believes all you have to do is a
set up a web site and rack in the dough. This concept may have been a good
basis for a movie, but it is completely inadequate for Internet marketing.
If you just sling together any old site and put it up on the web, you are
going to quickly turn into one of the people who believe the first myth
about the Internet. Marketing online is no different than any other type of
marketing in this area. You have to plan your business, design good
marketing materials, build relationships with customers, and learn how to
sell more to your existing customers.
If you build a well designed, well thought out site and promote it, they
will come. If you just build it, it will just sit there.
Myth #3: You need fancy graphics to catch your customer's interest.
Fancy graphics are not essential for online sales. If your graphics are so
detailed that they take too long to load, they will even cost you sales.
Most people are still connected to their Internet using basic modems and
graphic intensive sites often take too long to load for most people's
This is not to say that you can just use cheap graphics. Use quality well
designed graphics on your site, but keep them to a minimum. The key to
online sales is showing your customers the benefits of your product or
service. It is not in just having a gorgeous web site with dozens of
Myth #4: Internet consumers are so sophisticated that ad copy doesn't
Yes, Internet consumers do see through the hype that many people try to push
off as ad copywriting. This does not mean that you can just put together
string of words and a couple of pictures and hope people buy from you. If
you want to have customers constantly purchasing products and services from
you, you have to write ad copy which shows them the BENEFITS of your product
The key to ad writing is to show your benefits, not just your features. You
can't just tell people a bit about your product. You need to let them
know exactly what it will do for them. You need to help them get as exited
about your product or service as you are. Ad copy does make a difference
If you don't currently have a headline on your web site, get one
immediately. Ninety-five percent of web sites you visit won't have one, but
yours can. Then, list multiple benefits your visitors will receive for
staying at your site. If you don't let them know what they will get out of
your site immediately, then they will leave your site as quick as they
Myth #5: You can find anything and everything online for Free.
A lot of people think that they can get everything they need in their
business for free online. This just isn't the case. The old saying," You get
what you pay for" does apply to the Internet as well.
For example, free web hosts will end up costing you money in the long run.
People don't look at sites that are hosted for free in the same light they
do ones which have their own domain name. Whether it is true or not, free
web hosts don't give the same sense of stability to the consumer that your
own domain name would. Plus, you will often experience a host of other
This concept will apply itself to many other areas as well. Many
software programs out there will help you automate your online business, but
they do cost money. Many information products will help you build a better
business, but they do cost money. Always look at everything you do online
with this purpose in mind. Will the product, service, ad, web hosting, etc.
cost you or make you money in the long run?
Terry Dean, a 5 year veteran of Internet marketing, will Take You By
The Hand and Show You Exact Results of All the Internet Marketing Techniques
he tests and Uses Every Single Month Click here to Find Out More:
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