At FE International, we’re committed to providing our readers with the expert information they need when planning to either sell or buy an internet business. Our revamped newsletter is a continuation of this effort, and we hope you’ll find it relevant and enjoyable every week. If you have any suggestions or requests for the type of news you’d like to see in the newsletter, simply reply to this email and our marketing team will directly receive your comments.
Editor-in-Chief, FE International
The Catch 22 of Amazon FBA Sales Tax Rules
If you’re selling though Amazon FBA, you might want to double check how you’re collecting taxes from your customers. While the ecommerce platform certainly makes things easy for a business owner, it also presents some tricky tax issues that could cost you later on if you’re not paying attention.
The sales tax rules on FBA businesses are somewhat complicated because sellers have nexus in states where the fulfillment center is located. This means that they need to collect and pay sales taxes in those states, as well as any other state in which they have business presence.
Sellers who fail to collect and pay sales taxes may go a long time without consequences. But if and when states catch up, they’re likely to see a sizeable tax bill that they’ll have to foot out-of-pocket – plus interest and penalties.
For more information on state taxes from an FBA, including how to register your business, click here.
Nearly Half of Business Owners Not Familiar with Due Diligence
Are you familiar with the important process of due diligence? If so, it appears you’re a step ahead of many business owners, according to research from Griffith University’s Asia-Pacific Centre for Franchising Excellence.
The two-part study of small business owners and franchisees in Australia found that 42 percent of respondents were not familiar with the term “due diligence.” Almost the same amount said they have some understanding of the process, while just 19 percent expressed confidence in their knowledge of due diligence.
While these findings are limited to Australia, a survey of American would-be business owners showed that 90 percent of people who begin the process of buying a business never close a deal. The report, by Richard Parker of Diomo Corporation, pointed to inexperience, difficulty finding a good fit, and a lack of expert advice as the main reasons why transactions fail.
At FE International, we know that proper due diligence is key to a successful sale, especially from the buyer’s perspective. We also know that the process can vary depending on the business model. Check out the first part of our Internet Business Due Diligence series, in which we explore the unique aspects of due diligence for a website that monetizes through advertising.
Worried About How Ad Blockers Might Affect Your Business?
Recent reports indicate that about 10 percent of Americans have installed ad blockers on their desktop computers. Combined with Apple’s recent wave of ad-blocking apps and extensions, the news has sparked concerns among business owners who rely on ad revenue for income.
It really all comes down to behavior patterns. People who install ad blockers on their computers are very unlikely to click on ads in the first place, so losing them from the pool is no big loss to advertisers. In the same vein, people who like to click on ads are not likely to use ad blockers.
That said, there are a number of trends and factors that can affect the value of an advertising website. If you’re a business owner looking to sell your site, click here to get a free valuation.
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