E-Commerce Email Marketing Strategies and Benefits

When eCommerce email marketing comes to mind, the first thing that pops into most of our heads is those email blasts that advertise new products or promotions. But this is just one email marketing strategy. There are various other strategies that can be implemented that are even more effective.

Automated scheduled emails for your small business are also convenient and takes a lot of the ongoing marketing efforts off your hands.

3 Major E-commerce Email Marketing Strategies to Boost Your E-commerce Business

1. Lifecycle Emails

These are automated emails based on consumer behaviour that are sent out automatically to engage with your customers and help with building a relationship with them.

They include:

  • welcome emails
  • thank you emails
  • cart abandonment emails
  • win-back emails
  • birthday messages, and more.

2. Broadcast Emails

These emails are once-off marketing emails that include:

  • announcements
  • newsletters
  • sales
  • testimonials, etc.

3. Transactional Emails

Transactional emails are personalized, automated messages that are sent out to subscribers to prompt them to make a purchase on your website. They include things like:

  • email confirmations
  • receipts
  • password resets
  • shipping information, etc.

These emails are not marketing-related and do not require customers to opt-in since they are strictly business orientated.

Related: Taking the Stress out of Online Selling and Sales Tax

5 Benefits of E-commerce Email Marketing

E-commerce Email Marketing Benefits

1. It is Incredibly Effective

The idea of marketing emails is to reach your existing customers as well as targeting potential customers. The average opening rate for emails is around thirty percent.

About 24% of visitors that click on a link in an email are bound to make an online purchase. That is twice as much as the visitors that make a purchase from search results on search engines or clicking on links on social media.

2. E-commerce Email Marketing is Affordable

Email marketing is not only effective but relatively cost-effective compared to other marketing strategies. Sending out an email to your marketing list is cost-effective and has the highest return on investment than any other type of marketing.

Related: eCommerce Millionaire Mastery by Kevin Zhang (Review)

How are you marketing your e-commerce business? Here are three major e-commerce email marketing strategies and the five primary benefits of incorporating e-mail marketing into your e-commerce business.3. Customers Prefer Email Marketing

Generally, when customers sign up for your website newsletter it is because they would love to hear from you. More than sixty percent of consumers prefer receiving emails to any other forms of marketing communication.

More than ninety percent of customers prefer promotional emails from businesses with whom they wish to do business.

4. Email Marketing Poses Less Risk

There is always an inherent risk linked to building a following on social media platforms because there are rules that must be followed.

It happens sometimes that Facebook or other social media pages block your profile. And what if the algorithms change and your posts are not reaching your target audience anymore?

Email marketing poses a lesser risk since you have your individual list of subscribers and your email messages go to them directly. This means you retain your ability to engage with customers, no matter what happens with social media, algorithms, etc.

5. It is Incredibly Measurable

This form of marketing is incredibly measurable with statistics that display open rate, conversion rate, click-through rate to evaluate the efficacy of your email marketing campaign.

Statistics such as bounce rates, unsubscribe rates, spam complaint rates, etc, give you a good idea of the condition of your list.

Even statistics like list expansion rate and email sharing rate could give you insight into the popularity of your business. The most significant benefit of being able to keep track of everything is that it gives you valuable insight into where there is room for enhancement.

How are YOU marketing your e-commerce business?

We hope that this post about eCommerce email marketing strategies and benefits has been useful to you and that you will soon reap the benefits from your email marketing campaign.

Which e-commerce email marketing strategies are you currently using to promote your e-commerce business?

This post was sponsored by Common Thread Collective. All opinions are my own.

Golden Advice from Dan Lok for Entrepreneurs

This post is sponsored by DiamondLinks. 

Who is Dan Lok?

Dan Lok is a successful internet entrepreneur and property investor. He is a bestselling author of 15 books and “Unlock It“, published by Forbes Books. He has delivered not just one, but two TEDx talks. At present, he has 3.3 million subscribers on his YouTube channel as well as a wildly successful podcast where he interviews other leading entrepreneurs.

Dan Lok was born in Hong Kong and emigrated with his Mom to Canada when he was 14-years old. Dan’s primary motivation when he started in business was to provide for his Mother.  His wake-up call came when his Dad, a successful entrepreneur, went bankrupt due to a bad business partnership and could no longer support them financially.

Dan Lok’s net worth is now estimated to be between 50 – 86 million dollars. Let us take an in-depth look at how he achieved this massive success and how you can follow in his footsteps.

Why Learn from Dan Lok?

Like most entrepreneurs, Dan has lost money and made money in his career. By age 21, he had 13 failed businesses and he was deeply in debt.

He met his mentor, Alan Jacques, and learned the art of copywriting, or “print persuasion” as Dan calls it.

He worked 14 hours a day, 7 days a week, for 5 years. Within that time, he built his copywriting earnings to $10,000 a month, scaled his business, and invested in real property.

By age 27, Dan Lok was a self-made millionaire and retired… at least for a month or two.

As Dan joked afterward, “I spent a month on the beach and all I got was sunburn. I did all that for this. This is nothing! It’s boring.” He spent another month watching movies only to find that it was just as boring. He then went back to work and begun to build his digital empire.

Dan now teaches others how to become high-ticket closers, high-income copywriters, and high-ticket influencers. He gets paid handsomely for his courses and mentorship.

He’s taken some criticism online by those who feel his courses are too expensive, but his business advice has made many of his followers and past students their own fortune.

Dan gives loads of free advice and training to his millions of followers via his shows and blog posts on his website.

As you can tell from this introduction, Dan Lok is more than qualified to dish out expert entrepreneurship advice.

Dan Lok’s Best Entrepreneurship Advice

Since I consume most of my content on YouTube lately, I visited Dan’s YouTube channel and started watching videos as my research for this post. I could not stop watching them for 3 days!

Here are just a few of Dan Lok’s golden pieces of advice that resonated with me.

Dan Lok is a successful internet entrepreneur, property investor, venture capitalist, bestselling author, YouTuber and Podcaster. Dan's net worth is estimated to be between $50 and $86 Million.  Here's some of his best advice for entrepreneurs.  #goldenadvice #advicefromDanLok #adviceforentrepreneurs #entrepreneurshipadvice Don’t Kid Yourself!

Dan does not sugar coat it.  Your chances are slim to none that you will become a millionaire, especially if your parents and closest friends are not millionaires. The odds are against you and less than 1% will make it.

However, if you are willing to do what it takes, master high-income skills, and deliver value to the marketplace, you might stand a chance.

He is just as clear that it is not going to happen overnight. People work for years to get to that millionaire status. It takes tenacity and persistence.

If entrepreneurship is your chosen path and you want to reach the top, it is not going to magically fall into your lap. You are going to have to work harder than you’ve ever worked before, for as long as it takes.

“If you don’t sacrifice for your dream, then your dream becomes your sacrifice.” – Dan Lok

Busting Myths

Dan Lok believes that financial freedom is a myth and should not be our focus.

The idea popularized by Robert Kiyosaki that, “financial freedom occurs when passive income exceeds your expenses”, does not sit well with Dan Lok. This is mainly because he believes passive income is a myth too.

It takes hard work and years of dedication to build a successful business that generates passive income.

Even if you have put in the hard work and the hours, passive income is not permanent. You will still have to pay attention to what is happening in the marketplace and put in some work to support your passive income streams.

Dan learned this lesson the hard way. He worked on his passive income plan. He built 20 to 30 sites selling books on Clickbank. Each book was making him anywhere from $500 to $5,000 a month in income. However, when Google changed its algorithm, sales from Google AdWords fell and passive income dropped.

“Just because it’s passive, doesn’t mean it’s permanent.” – Dan Lok

So… what does Dan believe in?

Leveraged income over passive income.

You can achieve leveraged income by using other people’s time (OPT) or other people’s money (OPM).

First, master certain skills yourself, then train up a team to help you build your empire. Once you and your team have built an empire, you can build up an investment portfolio to grow your net worth. Now you have money working for you.

Financial confidence over financial freedom.

Rather than making financial freedom your goal, figure out which skills you can develop to offer value to the marketplace. You are paid according to how much value you offer.

True security comes from knowing how to make money anytime. If you happen to lose it all, you still have the knowledge and skills to make it all back. That is financial confidence.

If you study the world’s richest people, you will find none of them made it their goal to achieve financial freedom or generate passive income. Those terms mean nothing to them. They found something they wanted to offer to the world and did it well.

Entrepreneurs are Empaths

The amount of money you make is in direct proportion to how deeply you understand your market’s pain.” – Dan Lok

How can you help them relieve their pain?

People don’t buy their way into something; they buy their way out of something. People are looking for a way out of a problem.

What problem can you help someone solve?

Dan Lok’s Wealth Triangle

Dan pioneered the wealth triangle model using his own path to wealth as inspiration. Dan Lok's Wealth Triangle

Step 1: Develop high-income skills in your field that can get you to an income of $10,000 a month. Dan Lok did this as a copywriter.

Step 2: Turn that into a scalable business by employing others or teaching and training others to do what you did.

Step 3: Build your net worth by investing in property or businesses that offer a high return.

Dan owns a property portfolio, and he is a venture capitalist as well.

Which High-Income Skills should You Develop?

So, let’s talk about the high-income skills recommended by Dan Lok. I really enjoyed Dan Lok’s video: 7 Skills that will Make You Rich.

You may recall I created my own video on high-income skills. Copywriting and Public Speaking skills were on my list too.

Here’s Dan’s list…

1. Closing

The ability to persuade customers and ask powerful questions that compel people to buy.

2. Public Speaking

The ability to speak to groups. Can you present your ideas to a group? Can you interact with your audience?

Fortunately, speaking in public is a skill you can learn. Dan Lok learned how to master this skill at Toastmasters International. You can too!

3. Copywriting

Dan calls this persuasion in print and this was the first high-income skill he mastered. Interestingly enough, it was also mine.

4. Leadership

The ability to effectively communicate your vision and your business plan to your team.

5. Priority Management

The ability to manage your time effectively.

6. Financial Literacy

The ability to read financial statements, understand how money works, and manage your money.

7. Mindset

The ability to manage your mind and emotions (emotional intelligence). This includes getting past procrastination, self-limiting beliefs, and going from a poverty mindset to a wealth mindset.

Definition of a Millionaire

Definition of a Millionaire

In his video on how to become a Millionaire, Dan has a completely different definition of a millionaire than anyone else.

“A millionaire is someone who makes a million dollars a year joyfully – notice I didn’t say passively – they enjoy what they do.” – Dan Lok

He went on to say that there’s no point in making money if you’re unhappy, if your family’s falling apart, or if you have no time for your kids.

If you want to succeed as an entrepreneur, do not lose touch with your original motivation for starting a business.

How to Become a Millionaire

To become a millionaire you’ll need to cultivate and develop these 3 things:

A Millionaire Mindset

Millionaires have an ‘abundance’ mindset. They do not believe in scarcity.

People who struggle financially have negative beliefs about money. They believe money is bad and wealthy people are greedy.

If we do not move past these beliefs, we’ll block ourselves from becoming wealthy. This is because to reach the financial goal, we are forced to become one of them – one of those people we despise. It goes against the grain.

Millionaires look at money as neutral, something that can be used for good or bad.  They believe wealthy people are kind, generous, and benevolent.

A Millionaire Skillset

Millionaires have a growth mindset. They never stop working on developing their leadership skills, communication skills, marketing skills, or management skills. They recognize that these are the skills needed to turn their ideas into their reality.

A Millionaire Vehicle

Lastly, every self-made millionaire has a powerful vehicle or platform – their business.  It is not just a business, but a scalable
business where you can put your unique set of skills to work.

To become a millionaire, work on your mindset and the skills needed to build a scalable business. Put in the hours, and do not give up.

Conclusion

For me, Dan Lok has not only mastered the art of print persuasion and public speaking, but he has also mastered every one of the high-income skills he recommends we develop.   He is also living proof that his wealth triangle can work.

Which piece of Dan Lok’s golden advice for entrepreneurs resonated the most with you?

7 Characteristics of a Sound Business Model

Establishing a business model is not merely about finishing your business plan or identifying which products to pursue. It’s more about mapping out how you can generate ongoing value for your customers.

  • Where will the business concept start?
  • How must it expand?
  • How can you create value for your customers?
  • When will you know that you have been fruitful?

You can follow these steps to secure a sound business model.

1. Ascertaining Your Specific Audience

Targeting a broad audience will not permit you to refine customers that truly want and need your service or product.

Instead, when creating business models, it’s essential to narrow down your audience to maybe two or three consumer personas. Each persona is outlined according to common challenges, demographics and the solutions your business can offer.

Jason Vanclef discusses how his business model is driven by ensuring his client’s succeed in this interesting post on The Start-Up Mag. Vanclef runs a financial advisory company which only profits when his client’s profit. If only all business models operated on the same principle.

2. Creating Business Processes

Before the company can go live, you must understand the actions necessitated for a business model to work.

Ascertain key business operations by first identifying the primary aspect of your company’s offering.

Will you be responsible for supplying the service, shipping a product or providing consulting?

3. Recording Essential Company Resources

What does your business require to do daily processes, find new prospects and obtain company goals?

Document critical business resources to make sure the business model is sufficiently prepared for sustaining the needs of the business.

Common required resources might include:

  • A website
  • Capital
  • Intellectual property
  • Warehouses
  • Customer lists

Answer these questions to get to know the 7 characteristics of a sound business model so you can map out your path to business success. #characteristicsofasoundbusinessmodel

4. Generating a Solid Value Proposition

How will your business stand out among competitors?

Are you offering an innovative service, ground-breaking product or a fresh variation of an old favourite?

Identifying precisely what your company provides and why it’s better than opposition, is the start of a sound value proposition.

Once you’ve identified a few value propositions, link each one to a product or service delivery method to establish how you can stay valuable to customers in the long run.

5. Establishing Essential Business Partners

No successful business can operate efficiently or obtain established goals without having essential partners to contribute to the company’s ability to serve your customers.

When picking a business model, choose essential partners, like strategic alliances, suppliers, financial planning professionals, or advertising partners.

6. Creating a Demand Generation Plan

Unless you are taking a deep-seated approach to introducing your business, you will necessitate a plan that builds interest in your company, creates leads and is designed for closing sales. Think about how customers will find you.

More essentially, what must they do when they’ve become aware of your brand?

Creating a demand generation plan produces a blueprint of your customer’s expedition while documenting the essential stimuli for taking action.

7. Leaving Space for Innovation

When you initially launch your business and develop your business model, your company plan is based on numerous assumptions.

Until you’ve welcomed paying customers, you won’t truly know if the business model you’ve chosen can continue with meeting their ongoing requirements. This is why it is essential to leave some space for future improvements.

Don’t make the crucial error by thinking your initial business plan is a stationary document. Rather keep reviewing it periodically and incorporate necessary changes when needed.

Conclusion

We hope these seven tips will assist you in generating a sound business plan which is capable of invigorating your start-up’s success. Did we miss any key characteristics of a sound business model?  If so, please share in the comment section below.

Fulfilment Centre vs Warehouse: Logistics Choices Explained

Let’s say you run a successful online shopping cart website; order fulfilment is obviously a major concern, as your customers want to receive their goods in a timely fashion, and while a few decide to handle their own logistics, the majority of e-commerce websites would outsource their order fulfilment to a specialist third party provider (3PL).

The reasons for this are many; which we will discuss in this article.

Warehouse Solutions

Renting a warehouse is an expensive exercise, then you have to hire workers to pick and pack your orders, which then have to be delivered, and when you crunch the numbers, this is a very costly way of achieving order fulfilment.

Generally speaking, only the huge online retailers would benefit from keeping their logistics in-house, as the cost are prohibitive.

However, with third party logistics companies who are geared up for picking, packing and delivery, you have a low-cost, order fulfilment system that is reliable.

The Fulfilment Centre

Another term for a 3PL provider, the fulfilment centre is geared up to process high volumes of orders for their many customers, and the great thing about such a company is there are no long-term contracts to bind you to their service; simply climb on board and should you decide to suspend the service for a while, it only takes a phone call.

If your business is seasonal, for example, you might really need their help during Christmas and the New Year, while at other times, you can manage. Being fully flexible, you will only pay for the services you actually use.

Fulfilment Centre VS Warehouse: Logistics Choices Explained

Remaining Customer Focused

If you outsource your logistics, you and your team can focus on enhancing the buying experience on your e-commerce platform, safe in the knowledge that all of your orders are processed and delivered quickly and efficiently.

Cost-wise, you are far better off using a 3PL provider. With a quick Google search, you can locate an established company that will be happy to partner up and provide their services.

Comparing the Two

If you are currently doing your own picking, packing and delivering, why not talk to a third-party provider and compare the costs? This will help you to make an informed decision.

Plus, you can rest assured that your orders are being processed in a timely manner. An online search will give you the location of a 3PL provider and you can drop by and take a look at their facilities and set up, which should give the confidence that you are making the right choice by outsourcing.

It is vital that all of your orders are despatched efficiently and in good time. Rather than setting up your own warehousing, you are better off outsourcing to the experts.  These experts are geared up for high volumes and will adjust their service according to your needs, which is an ideal scenario.

When comparing costs, remember to factor in everything, especially the manpower you would require to self-fulfil, which might be considerable.

This post was published in partnership with Mediabuzzer.

Featured Image Source: Pexels       Pin Image Source: Unsplash

Are you outsourcing your warehousing and fulfilment to a third party logistics company?

Why Your Business Needs to Implement a Gift Card Voucher System

Customers love giving and receiving gift cards. Whether they see one in a store passing by or go out of their way to find a gift card for a loved one they know will appreciate it, giving gift cards would always be a smart way of gifting; there’s always a place for those.

Gift Card System Small Business

So, if people love them, it makes sense that businesses both big and small utilise the power of gift vouchers too, right? Doing so can bring tons of benefits, not to mention make gift-giving super simple for your loyal customers.

When searching for the right company gift vouchers software, there are plenty out there but only a few are reputable and have proven results such as Enjovia. This way, you can grow our customer base whilst rewarding loyal customers all at the same time, so there are tons of benefits to be had.

Why a Gift Card Voucher System must be Implemented

Many surveys point to the fact that gift cards make a lot of money and the increasing demand for them is not slowing down any time soon. In the US, customers are 84% more likely to buy a gift card in the holiday season. Still, any time is the best time to get a gift card voucher system and start enjoying the benefits yourself.

4 Excellent Reasons to Implement a Gift Card System in your business. #giftcardsystem #giftcardvouchersystem

1. They are secure

Gift card programs are more secure than paper-based gift vouchers that can get lost, torn or damaged. They are a great way for both small, medium and large businesses to embed a gift card programme into their company in a convenient way that protects against loss and fraud.

2. They are good for promotion

Everyone loves a gift card and they are a brilliant way to get your brand out there. This is because it gives your loyal customers the opportunity to be ambassadors, spreading awareness of your brand and bringing in new customers for you.

As a brand, you also know that word of mouth is one of the most powerful forms of marketing, so there are several positive associations that come with this gift. The programs also communicate a virtual experience too where the gift card can be personalised digitally and sent in a really interesting way.

3. They boost sales

Gift card programs have been proven to increase sales as they represent a whole product offering in one simple purchase. They are an effective sales channel that increases short-term sales and revenue which can be vital for your year-round business growth.

4. They are great for holiday seasons

As you have seen by the above figure, gift cards are most regularly purchased when popular holiday seasons hit. This is a great way to tie in special times of years with your marketing plans and make a connection between gift giving and your company.

A gift card system is a great way to attract more customers. It also brings several other benefits to your business.

Do you have a gift card voucher system in place in your business?

This post was published in partnership with Mediabuzzer.

Image Source: Freepik       Image Source: Pixabay

Lessons in Debt Collection – Pacific Collection Group

Transitioning from consumer to business owner is an interesting path. There are so many things you don’t think about when you first start out as an Entrepreneur.   One of those things for me was debt collection.

Debt Collection – the Flip Side of Debt for Business Owners

I knew about debt from a personal perspective -from the consumer’s perspective.  I lived through the pain of being deep in credit card debt and I know just how long it took me to climb out of that hole.

What I hadn’t thought of, until today, was that one day soon – when I start selling more digital products, when I create a membership site, I may have customers owing me money – who can’t afford to pay.

As a business owner, debt collection can become a thing. 

Debt Collection Assistance

This post was sponsored by Pacific Collection Group, specialists in managing and collecting debt for businesses. Their goal is to simplify the financial settlement process in order to improve financial stability for both the business and the consumer.

https://youtu.be/inDzGmisdfc

Keeping it Simple – Cash Upfront

I’ve always loved the idea of simple transactions in business.

I started out in business as an Aromatherapist.  My clients were wealthy – most of them could afford to have a treatment once or twice a week.

My payment plan was super simple.  Clients paid me upfront for 8 treatments in order to get a discount.

It was a win-win.  They got a great deal and I got assured monthly income.

Cash upfront vs Accounts

The first time I discovered how damaging it can be to move away from the cash upfront model was a few years later when I was Head of Network Marketing.

The company had started out purely as a Network Marketing company but at this stage of their business journey, they had chosen two routes to market their nutritional supplements.

One was through Network Marketing (my division).

This was a pure cash upfront model and marketing was free because it was by word-of-mouth.

The other was through Retail.  The Retail division sold products to Wholesalers, who in turn sold into Pharmacies and Health Shops, who in turn sold to customers.

Margins were small and income was slow because the wholesalers insisted on paying in 30, 60 or 90 days.

Reaching the end consumer became an expensive exercise because most of it was above-the-line advertising – TV, Radio and Print Media.  What made matters worse was that it took months before we knew the results of these marketing efforts.

If there was little to no pull-through in the pharmacies, some of the stock would come back months later from the wholesalers, in damaged containers, close to expiry.

Moving over to Retail was one of the main reasons this company went into liquidation. The cash side of the business couldn’t cover all the costs of maintaining the retail side of the business.

Big lessons learned in this business and not an experience I would ever want to go through again.

How do you handle debt collection in your business?     These are lessons I've learned in debt collection over the years.     Post sponsored by Pacific Collection Group.     #DebtCollection #DebtCollectionAssistance #PacificCollectionGroup

Debt Collection in My Online Business

Back to the present and my business as a Digital Entrepreneur.

As I plan out my strategy for my online business, I am mindful of these important business lessons.

So far, debt collection in my business has been straightforward. I’ve mostly sold freelance services (sponsored posts and content writing) and been paid per job as I complete it.

There’s been the odd slow payer here and there and one customer who requested a refund on Paypal (a story for another day) but mostly payments have been almost instant or on-time.

The huge benefit of a digital business is that there are no physical products and therefore no returns and no consumable goods that can expire.

The problem with this model?  I’m still being paid by the hour.  There’s no passive income.

Which is why this year, I’m focusing more on Affiliate Marketing (write one post or create one video that goes viral, get paid for life).  I don’t handle the debt collection in this model, the Affiliate Marketing company pays me once they know their payment is secure.

I’m also trying my hand at Dropshipping (eek, physical products!) but again, the Dropshipping company handles the debt collection and returns (not me – yay!).

And planning to develop and sell my own digital products – online courses, virtual summits and ebooks. This is where I may need to some debt collection savvy.

How can I keep things simple?

Can I stick to either cash or upfront payments?

Is there a way to generate guaranteed monthly income as I did in my Aromatherapy business?  Is a membership site the answer?

Do I have a 30-day refund policy?  And if so, how can I keep refunds to a minimum?

These are the questions I will keep top of mind this year.

How do you handle debt collection in your business?

Thanks to Pacific Collection Group for requesting this sponsored post and inspiring me to think all this through.

*Writing and publishing sponsored posts is one of the ways I earn income online. All opinions are my own.

Taking the Stress out of Selling Online and Sales Tax

I’m busy setting up my dropshipping store at the moment. Having such fun choosing products to sell. One thing that never crossed my mind until today, though, was Sales Tax.

Actually, I’ve been selling online for a while and it never occurred to me to charge Sales Tax on the products and services I sell in my shop. Not until I was asked to write this sponsored post on Sales Tax Compliance, which sent me into deep research mode.

Well, let’s be honest… at first, it sent me into a flat panic.   Eek!

Then I did the research and figured out that I don’t have to stress about this, at least not yet –  not when I’m just starting out with an online store (and dropshipping on a small scale).

It’s not that I mind paying tax, it’s just that it’s so much work figuring out how much to pay, which is why I outsource this kind of stuff to a good Accounting firm.

So I guess this would be a good time to add a disclaimer:

I’m not an Accountant or a Tax Consultant, I’m a Digital Entrepreneur. All the information below is from my perspective as an online business owner who’s about to become a drop shipper.

If, after reading this post, you are still in doubt about whether you are liable to pay Sales Tax or not, I recommend you get a sales tax audit.

Here’s what I uncovered in my research.

Let’s start by drawing a line between Income Tax and Sales Tax.

What is Income Tax?

Income tax is the money you pay to the government on your taxable income.

We all know (as business owners or employees) that we have to pay income tax and, of course, I’ve been doing that.

The way income tax works is you pay tax to the government of the country you live in, no matter where your customers are in the world or where your income is derived from.

Do I have to pay Income Tax as an Online Seller?

Generally, the answer is yes – especially if you have an online business.

Most countries have a tax threshold, which means that you only have to register to pay income tax once you earn a certain amount annually.   However, earning foreign income may have different tax implications.

South African Income Tax

So in my case, I live in South Africa, I’m a Sole Proprietor and am registered as a Provisional Tax Payer.

I pay provisional tax here in South Africa on the profit I make as a business owner, even though most of my income comes from the USA, UK and Australia.

I convert all my income into Dollars (USD) before I transfer it from Paypal and then it’s converted into Rands (our currency) when I transfer it in my South African bank account. Then I work out my income tax based on the Rand value of my business earnings less my business deductions.

Twice a year I submit Provisional Tax and once a year I submit an income tax return (so far there’s been no money to pay out on the income tax return because it’s been covered already in Provisional Tax).

Who is liable to pay income tax in South Africa?

In South Africa, the income tax threshold for 2020 is R 79,000 a year for people under the age of 65 and R 136,760 for people over the age of 65.  If you earn less than R 500,000 a year (from one employer), you don’t have to submit an income tax return.

However, there are a couple of important considerations.

1. If you receive income from many sources (not just one employer) you have to register to pay tax.

2. If you receive income from outside the country (remuneration for foreign services rendered), you have to submit a tax return (even if you’ve earned less than R 500,000).

So in my case, I’m liable to pay income tax on both counts.  I earn from multiple sources and I earn foreign income.

What are the Tax Laws in my Country?

It’s really important that you research the tax laws in your own country of residence because tax laws differ from country to country.

In America, for example, the tax laws even differ from State to State.  US residents pay Federal Income Tax to the US Government as well as State taxes in some States.

Do you have to pay sales tax as an online seller or dropshipper? The short answer, not when you're first starting out. The longer answer in this post. #sellingonlineandsalestax #dropshipping #ecommerce #salestaxcompliance

What is Sales Tax?

Sales Tax is the tax placed by a Government or a State on certain goods sold.

If you’re selling products or services, some governments and some States in the USA request.

In the UK and South Africa, it’s called VAT (Value Added Tax), in New Zealand and Australia, it’s called GST (General Sales Tax).

Some States in the USA are Sales Tax Havens.

Do I have to pay Sales Tax as an Online Seller?

Most dropshippers don’t have to pay sales tax when they purchase goods from a manufacturer, wholesaler or dropshipping supplier.

in the States, when you buy something for resale, you qualify for a sales tax exemption but to take advantage of this, you need to apply for an official exemption license (or resale certificate).

Do I have to charge Sales Tax as an Online Seller?

Here’s where things get a little complicated, but let me just say, right off the bat, that in most cases you will not have to charge sales tax when you’re first starting out as a Dropshipper.

If, however, you build a very successful online store, you’ll probably be liable for sales tax (just as any other store owner).

Sales Tax Regulations

Again, sales tax regulations differ country by country but I’m going to focus on the USA (as that’s where most of my audience is) and South Africa, as that’s where I live.

Do I have to collect and pay Sales Tax in the USA?

Before June 21, 2018, when the Wayfair Act was passed, you only had to collect tax from your customers in the United States if you had Nexus in a State that levied sales taxes.

What is Nexus?

Nexus is a legal term meaning you have a sufficiently large physical presence in a State that requires you to pay sales tax.  For example, if you live in the State or have an office property in the State.

So for dropshippers who don’t live in the USA, like me here in South Africa, or someone in the UK, Australia, Europe or anywhere else in the world, this means we were not required to collect sales tax from US customers or pay sales tax in the US.

What is Wayfair Nexus?

However, there was a new Supreme Court ruling on 21st June 2018 known as the Wayfair Ruling.

The new law says that Sales Tax Nexus can be applied if you don’t have a physical presence in a state but are making $100,000 in Sales or making 200 Sales in a State.

Which means that any US State can now require that remote retailers collect and pay sales tax. Fortunately, most States have not passed this legislature.

For now, if you’re new to dropshipping, sales tax will not apply as this bill was aimed mainly at large online retailers.

Mostly, you’ll only have Nexus if you live in a State or have property in it and the law is not going to affect you until you start making lots of money.

If you’re confused by any of this, I found a brilliant video on YouTube by Sarah of Wholesale Ted.

Do I have to collect and pay Sales Tax in South Africa?

So my next question, of course, do I have to register as a VAT vendor and start charging VAT?

Yes and No.

If you own an online store, and South Africans buy products from your store, you have to charge 15% VAT on all VAT-able products.   However, you don’t have to charge VAT if your customers buy from anywhere else in the world.

Yet again, the answer for me is no, for now, because I don’t have to register as a VAT Vendor until I’m doing over R 1 million in sales a year.  I’m guessing that’s going to take a while.

So what I discovered in my research is that I’m in the clear when it comes to Sales Tax, for now.

Phew! One thing less to worry about.

And by the time I’m selling that many goodies in my dropshipping store, I will happily be able to afford a brilliant Accountant to handle all my tax submissions for me.

Hope when you do your research on your countries tax laws, you find happy news too.

Let’s do a quick poll.  In the comments below, let me know which country you come from and whether you have to collect and pay Sales Tax to your government on the goods you sell online.

*This post was sponsored by Tax Connex, who take the headache out of Sales Tax in the United States. Writing sponsored posts is just one of the ways I earn income from my blogs. All opinions are my own.

What’s a Sales Presentation? (Video)

Video

What’s a Sales Presentation?

Watch this video to find out.

As promised, here’s a link to the 15-Day Online Business Challenge.

You may want to read my review first though – as there are some special offers at the end of the review.

If you’re a digital entrepreneur or would like to become one I’d encourage you to do the Challenge. It’s AMAZING!

On Day 11 you’ll get to see Dave interviewing Kevin Harrington (former Shark) about those 3 steps to the Perfect Pitch I mentioned in the video: Please, Tease and Seize.

* If you purchase anything through a link in this video, you should assume that I have an affiliate relationship with the company providing the product or service that you purchase, and that I’ll be compensated in some small way at no extra cost to you.

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