Thursday, December 30, 2010

Stock Making Money

Remember when double and even triple inverse leveraged ETFs were all the rage? That all occurred in the brief period of time before it became clear that Bernanke would first take down the global financial system before he let Citi get back to $1/share again. Apparently one reader recalls it all too well: "In 2008 at the bottom of the market I sold positions I owned in physical
gold and banks stocks such as Bank of America (BAC), Citigroup (C) and
also non financial companies such as Ford (F). I used these proceeds to
purchased inverse ETF’s such as NYSE: FAZ (Direxion Financial 3x Short)
and NYSE:SRS (Proshares Real Estate 2x Short). Since making these purchases, these ETF’s have suffered significant
drops in value as reflected in their price. In fact NYSE: FAZ has
plummeted from $1100 per share to $11 per share and SRS has reduced in
price from $1000 per share to $19.50 per share. It is now apparent that
the Fed spent trillions of dollars to raise the price of bank stocks and
to inversely suppress the price of these inverse ETFs." Yet is this nothing but a case of fippers' remorse? Is there legal precedent for an actual claim? Was the Fed in breach of duty "by allowing investors to make investments into funds such as FAZ and SRS
and other inverse ETF’s, while the Fed was performing transactions that
the Fed knew or should have known would severely harm the investors in
these publicly traded fund." Will Bernanke cave and make whole everyone who dared to put money into the market, even if it meant betting on a broad market decline? After all the whole purposes of the latest propaganda campaign is to get people to put money in the market with no fear of loss whatsoever: whether one is bullish or bearish (and as the lack of participation shows, most are certainly still bearish). Which is where it gets interesting: "Therefore, I appeal to your office
to make due and just compensation in treble damages amounting to $__
million dollars for a full and good faith settlement of this matter. If
this is agreeable, I am prepared to enter into a confidential good faith
settlement." In our ridiculous bizarro world, in which nothing makes sense following each recurring Fed intervention, perhaps the Fed making whole those who lose money regardless of their bias, is just what is needed to break the 33 weeks of outflows...

Full letter submitted by Bill Pitts:

December 7, 2010

Mr. Ben Bernanke
Chairman
Federal Reserve Bank
20th Street and Constitution Avenue NW
Washington, DC 20551-0001

Re: Financial Loss Suffered By Owners of Inverse ETF’s

Dear Chairman Bernanke:

On or about March of 2009, the Federal Reserve Bank (The “Fed”) commenced in actions that involved making loans to banks, financial institutions, wholly owned Fed companies (i.e. Maiden Lane), lenders and publicly traded companies. Additionally evidence suggest that the Fed through these firms and at the direction of the Fed made direct purchases of equities in publicly traded companies for the purpose of raising stock prices. These transactions were undisclosed to the public and investors. Neither the Fed nor the recipient companies disclosed these material transactions to the investing public. Ostensibly, this assistance from the Fed was conducted with the objective of increasing the stock value of many troubled companies and banks. Additionally, under the plan by the Fed and U.S. Treasury, these banks and financial institutions used the Fed supplied funds to purchase each other’s stock. This was conducted to allow each bank to raise each other’s stock values to improve the assets values on one another’s balance sheets. These actions were supported encouraged, known about and assisted through actions of the Fed and the United States Treasury.

While these actions may have been helpful to those firms to abate the systemic problems within the market, assisted in working to make recipient banks more solvent and may have prevented additional bank failure, these actions resulted in severe detrimental damage to many individual investors.

As you are keenly aware, most every market transaction has two sides to a trade. As a stock or asset class increases in value, some investors realize gain while simultaneously others who concluded that the stocks would NOT improve in price and made investments accordingly known as taking a “short” position would loose money. The inverse of this scenario is also true.

As stock prices decrease, those investors who purchased inverse Exchange Traded Funds (“ETF’s’) would gain value in their investments.

As I understand it, between the Fed and the SEC you all are charged with ensuring fairness, honesty and integrity in our markets and monetary system. It is also my understanding that the Fed professes to never intervene in the markets unless it is to prevent crisis.

I attempted to understand current events, market conditions and the fundamentals of financial and cash flow statements prior to making personal direct investments. I have always assumed that significant transactions with companies being publicly traded would be conducted in the open and that significant transactions would be disclosed to all investors to make informed decisions. Unfortunately, it appears that as a result of the Feds efforts to correct the current financial crisis these rules of disclosure and openness were set aside.

After the September 2008 market crash I took a much more active role in managing my investments. Based upon reading financial data and analyst reports it was very obvious to me that there many commercial property REITS, banks and lending institutions were severely impaired, would suffer significant cash shortfalls and were insolvent or would go bankrupt. It appears that your office arrived at the same conclusion as evidenced by the subsequent injection of hundreds of billions of dollars of cash directed to these institutions by the Fed.

In 2008 at the bottom of the market I sold positions I owned in physical gold and banks stocks such as Bank of America (BAC), Citigroup (C) and also non financial companies such as Ford (F). I used these proceeds to purchased inverse ETF’s such as NYSE: FAZ (Direxion Financial 3x Short) and NYSE:SRS (Proshares Real Estate 2x Short).

Since making these purchases, these ETF’s have suffered significant drops in value as reflected in their price. In fact NYSE: FAZ has plummeted from $1100 per share to $11 per share and SRS has reduced in price from $1000 per share to $19.50 per share. It is now apparent that the Fed spent trillions of dollars to raise the price of bank stocks and to inversely suppress the price of these inverse ETFs.

Now 20 months after these investments were originally made, your office disclosed that it had directly and indirectly injected hundreds of billions of dollars into numerous publicly traded companies. However, this information was not made public to investors by either the Fed or the institutions receiving these cash injections as these significant material transactions were occurring.

As a result, investors could not make informed investment decisions. By allowing investors to make investments into funds such as FAZ and SRS and other inverse ETF’s, while the Fed was performing transactions that the Fed knew or should have known would severely harm the investors in these publicly traded fund.

My damages had I continued to hold onto my shares of Ford and physical gold are in excess of $__ million. Therefore, I appeal to your office to make due and just compensation in treble damages amounting to $__ million dollars for a full and good faith settlement of this matter. If this is agreeable, I am prepared to enter into a confidential good faith settlement. I would also be prepared to drop action in attempting to raise public awareness to prepare for a class action lawsuit against the Fed regarding this matter.

Should we not be able to resolve this matter I will be forced to file a claim in the Federal District Court and work to initiate a Class Action Lawsuits to represent all owners of these inverse ETF’s that suffered economic loss. Enclosed please find a few of the reports relied upon to arrive at the conclusions. I would seek to further explore this through depositions and discovery of the many recipients of funds from the Fed.

I do not envy your position and the challenges you face during these very difficult times. Had I been on the other side of these trades I may very well hold a higher opinion of the Fed and its actions. Unfortunately I have been damaged as a result of your decisions.

Should your office desire to discuss this, I can be reached at my office at XXX-XXX-XXXX or my mobile at XXX-XXX-XXXX

Regards,

William G. Pitts

Enclosures

Totally Busted: The Truth About Goldman's Bailout by the Fed

"Secret bailouts do not merely benefit recipients; they also deceive investors into mistaking fantasy for fact. Such deceptions often punish honest investors, like the honest investors who sold short the shares of insolvent financial institutions early in 2009.Based on all available public disclosures, the story remained fairly grim into the spring of 2009. Accordingly, the short interest – i.e., number of shares sold short – on Goldman Sachs common stock hit a record 16.3 million shares on May... 15, 2009 – about 3.3% of the public float. But over the ensuing six months, Goldman’s stock soared more than 30% – producing roughly $500 million in losses for those investors who had sold short its stock. Not surprisingly, the total short interest during that timeframe plummeted to less than 6 million shares, as short-sellers closed out their losing positions."

http://www.economicpolicyjournal.com/2010/12/totally-busted-truth-about-goldmans.html

12/1/10 Fed aid in financial crisis went beyond U.S. banks to industry, foreign firms

http://www.washingtonpost.com/wp-dyn/content/article/2010/12/01/AR2010120106870.html

12/1/10 Fed gave $3.3 Trillion to banks

http://www.youtube.com/watch?v=rTPa1hGtpJs

12/1/10 Fed made $9 trillion in emergency overnight loans

http://money.cnn.com/2010/12/01/news/economy/fed_reserve_data_release/index.htm?hpt=T1

12/1/10 Meet The 35 Foreign Banks That Got Bailed Out By The Fed (And This Is Just The CPFF Banks)

http://www.zerohedge.com/article/meet-35-foreign-banks-got-bailed-out-fed-and-just-cpff-banks

12/2/10 Federal Reserve May Be `Central Bank of the World' After UBS, Barclays Aid

http://www.bloomberg.com/news/2010-12-02/federal-reserve-may-be-central-bank-of-the-world-after-ubs-barclays-aid.html

Fed Releases Details on Bear Stearns, AIG Portfolios

http://www.bloomberg.com/apps/news?pid=20601087&sid=aymTlczlMmpA&pos=1

Fed in hot water over secret bailouts

http://www.csmonitor.com/Money/Robert-Reich-s-Blog/2010/0401/Fed-in-hot-water-over-secret-bailouts

The Fed Admits To Breaking The Law

http://networkedblogs.com/21Xqv

Fed Opens Books, Revealing European Megabanks Were Biggest Beneficiaries

http://www.huffingtonpost.com/2010/12/01/fed-opens-books-revealing_n_790529.html

Paulson/Goldman/Center for Responsible Lending

http://www.youtube.com/watch?v=E10bHAI7U68&feature=player_embedded

Goldman CEO Visited WH 4 Times During SEC Investigation

http://www.thefoxnation.com/business/2010/04/22/goldman-ceo-visited-wh-4-times-during-sec-investigation

Goldman's White House connections raise eyebrows

http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html

Indymac Boys Get Sweetheart Deal

http://www.youtube.com/watch?v=ssl5yb7FewA

Obama’s $6.3 Trillion Scam Is America’s Shame:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.G6KFfaDdSc

Congress threatened with Martial Law if they do not give hundreds of billions to Bankers

http://www.youtube.com/watch?v=HaG9d_4zij8

Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."

http://www.youtube.com/watch?v=n0NYBTkE1yQ&feature=player_embedded

BoE Secretly Loaned $102.9 Billion to RBS

http://www.cnbc.com/id/34126826

Bank of England tells of secret £62bn loan to save RBS and HBOS

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6646923/Bank-of-England-tells-of-secret-62bn-loan-to-save-RBS-and-HBOS.html

Bank of England advisers not told about secret £62bn loan to HBOS

http://www.guardian.co.uk/business/2009/dec/03/bank-england-secret-loan-hbos

Federal Reserve refuses to tell the US Senate to Whom they have given $2.2 Trillion

http://www.youtube.com/watch?v=2EQDrVKYWmc

Bailouts could cost U.S. $23 trillion

http://www.politico.com/news/stories/0709/25164.html

Sticker Shock: $23.7 Trillion Bailout?

http://abcnews.go.com/Business/Politics/story?id=814

Tracking the $19 Trillion Bailout Funds

http://blog.newsweek.com/blogs/wealthofnations/archive/2009/09/22/tracking-the-19-trillion-bailout-funds.aspx

Fed Lends Two Trillion Without Oversight

http://www.youtube.com/watch?v=oxuqmPyKqcs&feature=player_embedded

How Lehman, With The Fed's Complicity, Created Another Illegal Precedent In Abusing The Primary Dealer Credit Facility

http://www.zerohedge.com/article/how-lehman-feds-complicity-created-another-illegal-precedent-abusing-primary-dealer-credit-f

Access to fed Money - One of few naked Short Sellers who destroyed Bear Stearns and Lehamn Bothers

http://www.youtube.com/watch?v=Q48eSoTNByQ&feature=related

Geithner: Pickpocketing Trillions from the People to Give to the Oligarchy Was "Deeply Unfair", But We ... Um ... WE Had To

http://www.washingtonsblog.com/2010/04/geithner-looting-country-for-trillions.html

Why Is The Fed Actively Managing A $25 Billion Maiden Lane MBS Portfolio When Its $2.4 Trillion SOMA Holdings Have A $1 Billion DV01? (And Are Unhedged)

http://www.zerohedge.com/article/why-fed-actively-managing-25-billion-maiden-lane-mbs-portfolio-when-its-24-trillion-soma-hol

Did The Fed Just (Surreptitiously) Bail Out Europe?

http://www.themarketguardian.com/2010/04/did-the-fed-just-surreptitiously-bail-out-europe/

Goldman Sachs pay out $111million in bonuses despite taking billions in bailout money

http://www.dailymail.co.uk/news/article-1339220/Goldman-Sachs-pay-111million-bonuses-despite-taking-billions-bailout-money.html#ixzz18NTzHyqF

Goldman's White House connections raise eyebrows

http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html

Israeli made partner at Goldman Sachs

http://www.ynetnews.com/articles/0,7340,L-3320118,00.html

Goldman Sachs was top Obama donor

http://articles.cnn.com/2010-04-20/politics/obama.goldman.donations_1_obama-campaign-presidential-campaign-federal-election-commission-figures?_s=PM%3APOLITICS

Israel OKs US ‘Gift’ of Billions of Dollars in Warplanes

http://news.antiwar.com/2010/09/16/following-fierce-debate-israel-decides-to-buy-f-35-warplanes/

h/t Will

Two years into the Obama presidency and the economic data is still looking grim. Don't be fooled by the gyrations of the stock market, where optimism is mostly a reflection of the ability of financial corporations -- thanks to massive government largesse -- to survive the mess they created. The basics are dismal: unemployment is unacceptably high, the December consumer confidence index is down, and housing prices have fallen for four months in a row. The number of Americans living in poverty has never been higher, and a majority in a Washington Post poll said they were worried about making their next mortgage or rent payment.

In a parallel universe lives Peter Orszag, President Barack Obama's former budget director and key adviser, who even faster than his mentor, Robert Rubin, has passed through that revolving platinum door linking the White House with Wall Street. The goal is to use your government position to advance the interests of your future employer, and Orszag and Rubin's actions in the government and then at Citigroup provide stunning examples of the synergy between big government and high finance.

As Bill Clinton's treasury secretary, Rubin presided over the dismantling of Glass-Steagall, the New Deal legislation that would have prohibited the creation of the too-big-to-fail Citigroup. He was rewarded with a $15-million-a-year job at Citigroup, where he became a leader in the bank's aggressive move into high-risk ventures. An SEC report in September claimed that Rubin as Citigroup chairman was aware that the bank failed to disclose $40 billion it held in subprime mortgages before the collapse.

During those years at Citigroup, Rubin financed the Brookings Institution's Hamilton Project, an economic policy program, and named Orszag, a Clinton economic adviser, as its director. The Hamilton Project continued to celebrate Rubin's deregulation philosophy up to the point of utter embarrassment. Clearly, Orszag is not easily embarrassed, for upon taking his new job recently he boasted "I am pleased to be joining Citi, with its unmatched global platform and dedication to providing clients with service and advice."

The most damning comment on this corrupt syndrome was offered by former Citigroup co-chief executive John Reed, who had worked with Rubin to get Glass-Steagall reversed and now is a sharp critic of the result. "We continue to listen to the same people whose errors in judgment were central to the problem," Reed told Bloomberg News. "I'm astounded because we basically dropped the world's biggest economy because of an error in bank management." Reed estimated that the financial deregulation proposals contained in the Dodd-Frank bill and other reforms of the Obama administration represent only 25 percent of the change needed.

The failure to provide serious regulation of the financial industry to avoid future downturns is documented in devastating detail in that Dec. 28 Bloomberg report, written by Christine Harper:

"The U.S. government, promising to make the system safer, buckled under many of the financial industry's protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives."

The reason for that failure is obvious from the president's choice of advisers featuring Rubin acolytes from the Clinton years. Harper writes: "While Obama vowed to change the system, he filled his economic team with people who helped create it," referring to, among others, Timothy F. Geithner, who had gone from the Clinton Treasury Department to head the New York Fed, where he presided over the salvaging of Citigroup and AIG. As Obama's treasury secretary he was quick to appoint a Goldman Sachs lobbyist as his chief of staff. Geithner's subservience to Wall Street was reinforced by White House top economic adviser Lawrence Summers, Rubin's deputy and then replacement in the Clinton administration who pushed through the repeal of Glass Steagall and fought against the regulation of derivatives.

And with the decisive assistance from both a Republican and Democratic president, all has worked out just as planned for the banks. Harper reports: "The last two years have been the best ever for combined investment-banking and trading revenue at Bank of America Corp., JPMorgan Chase & Co., Citigroup, Goldman Sachs Group Inc., and Morgan Stanley, according to data compiled by Bloomberg."

It's all wonderfully bipartisan. Recently it was announced that Carlos Gutierrez, commerce secretary under George W. Bush, had been named to a high position at Citigroup. For President Obama, there's no cause for worry about the loss of indispensable talent from his administration. Orszag's replacement as head of the Office of Management and Budget, Jacob J. Lew, was both a member of Rubin's Hamilton Project and a former Citigroup executive -- thus insuring that government of the banks, by the banks, for the banks shall not perish from the earth.

Stubborn Joblessness Among Vets Darkens US Economy - AOL News

The newly reported drop in jobless claims belies continued rough going for America's Iraq and Afghanistan war veterans, who are experiencing 10 percent unemployment.

AOL Weird News Top 10: The Best of the Bizarre

What does a one-legged man, a fly-sized frog, a bacon sculpture of Kevin Bacon, conjoined twins who can see out of each other's eyes and a 115-foot Jesus statue have in common? They've all made the list for AOL's Top Ten Weird News ...

News - Chris Brown Apologizes for Using Gay Slurs on Twitter ...

"I love all my gay fans and this immature act is not targeted at you," he says.

surface encounters rock tops surface encounters surface encounters surface encounters review surface encounters complaints surface encounters surface encounters complaints surface encounters review surface encounters surface encounters surface encounters review surface encounters surface encounters complaints surface encounters surface encounters complaints surface encounters review surface encounters review

Tuesday, December 28, 2010

internet marketing

Now that you’ve started your business and told all your friends and family, you may be wondering, “how do I get more customers?” or “how do I branch out to other people?” Marketing your company and increasing your business presence are ongoing tasks throughout the life of a business that every entrepreneur faces. You can never have too many customers and putting some time into finding those customers is well worth the effort. The following are some helpful ideas for increasing your business presence.

1. Make Your Business Look Official. The first step to a successful marketing campaign is to make your business look official to the outside consumer. With the threat of identity theft ever present in the mind of the American consumer, the more official your business looks, the more likely a customer is to use you and then recommend you to a friend. Making your business look official can consist of filing it with the state, listing with the Better Business Bureau, or even just getting letterhead and a website. In today’s online-based economy, finding a company with a website or that is reputable is just a click away. You don’t want to lose consumers because you looked too much like a fake company.

2. Obtain Relevant Trademarks. After making your business official, keeping up the high standards of operation is important. Unfortunately, a great reputation can be ruined easily by a company with the same or similar name. Getting a trademark for your business or the product you make is important to protect against potential confusion of consumers and gives you recourse against those individuals who do steal your name. U.S. trademarks also protect you from someone stealing your name or ideas nationwide, providing you the opportunity to expand your business beyond your city and state. Applying for a trademark may sound difficult but in reality, many online business filing services will prepare the trademark application materials for you, saving you the hassle of hiring an expensive lawyer.

3. Create a Marketing Plan. Advertising and marketing is the biggest way to make consumers aware of your business, and creating a marketing plan will give you some direction. Think about what you do and who your targeted consumers are. That will often dictate how you focus your marketing and advertisements. For example, a company that offers in-home services to elderly people (a hot industry FYI) probably isn’t using their resources wisely if they use mostly internet advertising. On the other hand, a company that sells college textbooks would do well with almost all online marketing. The audience you sell to and the products or services you offer will help define where your advertising and marketing resources and efforts should go.

4. Different Media Options. Now that you’ve made yourself look professional and reputable and you’ve got your target audience in mind, here are some places you can start your publicity.

Social media is a great place to go for companies that appeal to the younger generation. Facebook, LinkedIn, and Twitter are widely popular in the under-30 crowd and even professionals in the 30 to 60 bracket are starting to get in on the action. Having accounts with these sites allows you to create a page where people can find out more information about you and “follow” you. Facebook also allows companies to do advertising with its site, further increasing your presence in the social media scene.

In addition to social media, there are other online techniques to gain and keep customers. Taking the website you created and making it as user-friendly as possible will encourage consumers to use you instead of going to another site. Also, applying search engine optimization techniques (commonly known as “SEO”) to your website will bring it up higher on search engines for certain terms, helping consumers find you. Lastly, listing yourself with trade associations and writing articles relating to your industry or field will help get your name out there and that will go a long way towards bringing in new customers.

For more traditional fields or older generation consumers, print marketing will be much more beneficial. Many trade associations continue to publish print newsletters and journals so look into publishing with them. Mailbox flyers or mailings are also good ways to reach out to consumers and make them aware of your business. Posting these flyers in places that your consumers might frequent will further increase your company’s presence.

Remember, marketing and advertising are only the first few steps on the road to running a successful and profitable business. Keep customers and provoking customers to recommend you are just as important as the initial publicity. Customers will be most likely to recommend you when they have a good experience so keep your standards high!

(Editor’s note: Kevin Sproles is the CEO of Volusion. He submitted this story to VentureBeat.)

Heads up, entrepreneurs! There’s increasing political interest for an Internet sales tax.

Although we’ve seen calls for this in the past, the topic has seen a resounding resurgence amidst budget deficits in almost all 50 states. This deficit crisis has presented many lawmakers with a golden opportunity to recoup some revenue by collecting tax on online purchases.

As a brief recap, online businesses are only required to charge sales tax in a state where they have nexus, such as a physical location. For example, if you’re running an e-commerce site from a home office in New Jersey, you only have to charge sales tax to customers that reside in New Jersey. Although your customers are required to pay use taxes on sales made in other states, this is a complicated process that’s nearly impossible to enforce.

While this lack of enforcement is enticing to online shoppers, state governments claim that they’re losing over $23 billion in revenue because of the current tax code. In Texas alone, the state comptroller notes that almost $600 million in local and state sales taxes were lost from online purchases in 2009.

On the federal level, the push for new tax legislation came with the introduction of The Main Street Fairness Act. This proposal calls for an online sales tax under the reasoning that online stores should face the same tax regulations as their retail counterparts. To complicate things even further, several states are independently working to broaden the definition of nexus so that they may be entitled to online sales tax. The most vocal cases come from states like Nevada, Florida and Washington, all of which rely on sales taxes in the absence of a state income tax.

Debates and opinions don’t impact bottom lines, though. Here are five major implications you would face if you do business online. (Some are more obvious than others and I should note that this list is by no means comprehensive.)

Need for additional software: Since there are over 7,500 independent tax jurisdictions with varying regulations, you’ll need to invest in software that can automate tax calculations, collections and filings for you. Managing differences across these jurisdictions would be impossible without drowning in maps and numbers.

To further complicate matters, each state has varying tax exemptions. For example, some states require no sales tax on digital products like software. Other states have reduced rates for food items or children’s clothing.

Thus, be ready to shell out some extra cash or wait for an integrated system to automatically process sales tax for you.

A big push in paperwork: An Internet sales tax will require you to place an extra emphasis on record keeping and form filing. To begin your new path to tax compliance, you must register in every state in which your business sells. Thus, if you’re selling nationwide, you’ll have to submit business registration forms in all 50 states, and various cities, counties, boroughs, etc. , each of which have different requirements.

Next, you’ll need to submit tax forms at the end of each tax season to each jurisdiction in which you’ve sold something. And in the event of an audit from any of these states, you’ll be required to keep detailed documentation of each transaction to protect yourself.

So whether you decide to hire an extra hand, invest in a giant filing cabinet, or create a new database, be prepared for an unprecedented increase in record keeping.

Inability to position on price: In this current heyday of ecommerce, many marketing strategies are based on price. This is particularly true if you’re active in comparison shopping engines like Google Product Search. Online shopping trends, particularly during the economic downturn, demonstrate that customers are more price conscious than ever.

With the passage of this proposed sales tax, you’ll now have to convince customers to shell out money for an additional 7-9 percent sales tax, on top of convincing them to pay those dreaded shipping fees.

In a world with an online sales tax, your business will have to shift its marketing promise away from price to focus on product benefits and customer service. These two selling points will become more and more important to help justify higher prices to customers.

Smaller margins: Unfortunately, price will always remain an issue, and smaller online businesses must remain competitive with their larger counterparts. So even though your customers will be the ones paying the tax, you’ll likely have to lower prices to compensate for this new surcharge and prevent prices from becoming astonishingly high. This will be particularly true for luxury items.

With an Internet sales tax, customers will become even more price-conscious than before, leading to an increased dependence on discounts. And once you start slashing prices and running more promotions, your profit margins will begin to diminish. This revenue hit will then require cost-cutting measures in other aspects of your operations.

A shift toward local marketing: An Internet sales tax will also require your business to take a more local approach in its marketing strategy. This includes an increased push toward local SEM, such as targeted PPC and local listings like Yellow Pages. While interstate e-commerce will continue to play an important role in any revenue stream, it will be much easier and convenient to sell within your own state.

This impact should actually be beneficial. It’s typically easier to manage local marketing campaigns, particularly in regards to budget allocation. There will also be a shift of marketing dollars to more traditional advertising, such as local newspapers.

Next Story: Game companies raise record $1.05B in 2010, up 58 percent Previous Story: Fancy “iOne” camera chips will enable Android photo-sharing devices

Thursday, December 30, 2010

Tuesday, December 28, 2010

Thursday, December 23, 2010

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Wednesday, December 22, 2010