Welcome to all our new subscribers!
I came across an interesting snippet a few days ago on CyberAtlas. It appears that the number of active users on the Internet for May was nearly half a million less overall than for the previous month. The number of active users is defined as the estimated number of people actually using the Internet during a particular month - rather than just those with Internet access.
I haven't seen a negative number before in my years of watching these stats and I wonder why this may have occurred. The drops occurred in the following countries (13 countries are monitored):
Japan - 500,000
Weird - maybe the warmer weather in the USA is luring people away from the web - perish the thought :). I didn't notice the same pattern this time last year.
The Taxman and the Internet
It's coming up to the end of the financial year for many businesses in Australia, and lucky us, the tax department has decided to focus on IT spending this year (again); so I hope our Aussie readers have their shoeboxes full of receipts.
It seems that the Australian tax department is having great trouble in deciding how to treat online business. In Australia, we have a wonderful thing call GST (Goods and Services Tax). Basically what it does is to give another 10% of everything we earn to the government, while also doing the associated paperwork for them. We get some of this back by claiming the GST component of the money we spend on generating income.
GST does not apply to income generated from overseas sources (exporting). It makes sense for local online business to try and generate income from outside our own country and to spend money on services to generate that income within - although the current exchange rates have been favoring purchasing US based services.
An accountant recently relayed the story to me of a webmaster who our beloved tax department tried to royally screw. They stated that since his site was hosted on a US server, his ecommerce services could not be considered an export business. To my way of thinking, if the department wants to follow that line of reasoning, then they aren't entitled to anything anyway as it doesn't fall into any category for income; so we should be even exempt from general income tax ;). Yeh, I'm dreaming...
Tax issues and the Internet are an extremely murky area so ensure your accountant is switched on to your business. There are still many accountants who are very confused about the way that ecommerce operates in terms of spikes, troughs and rapid change to business models being the norm rather than the exception. They may not advise you correctly. It's a unique environment and good practitioners who will be genuinely interested in your business and minimizing your tax liability "on the fly" are very hard to find.
xenophobia \ZEN-uh-FOE-bee-uh\, noun:
While on the subject of international issues, if you're an online business owner located outside of the USA and have your products labeled with your local currency, you may be missing out on many sales.
The US dollar is still the language of the web - it's a simple as that. I've noticed many local site owners tend to have their prices in AU$ first, then perhaps they'll have US$ below it, or a link to a currency converter. In some instances, there will be nothing to indicate the approximate US conversion.
What non-USA site owners need to understand is that while the perception we have of Americans is that they have a global attitude, broadly speaking it's not quite like that. On some subjects Americans can be quite insular, including currency issues.
I've observed Americans become very confused when faced with a currency other than their own, even with access to a currency converter.
Experienced cyber-shoppers in other countries have grown quite accustomed to making a quick mental conversion to US$. Also, if Americans have trouble with conversions, it's more than likely customers from other countries will too. Of course, this advice doesn't apply if your target market is local.
If you are opening your ecommerce web site up to an international market, it's good to remember that based on the stats at CyberAtlas.com, a country such as Australia currently only represents only 2% of the surveyed market (not taking into account specific markets and industry sectors). The American market still has around 50% share.
My advice to most businesses these days is to display pricing in this way; either just use US dollars or US dollars followed by the local currency, or have the US price first, followed by the Euro, followed by the local currency. While Japan has a rapidly growing Internet user base, it's my understanding that the Japanese are very comfortable with US currency.
Just on the subject of converters - if you're looking for a free solution that will plug in to your web site, try XE.com Currency Services - it's very reliable, can be implemented with just a snippet of code and the price is right :).
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TTB Resources summary
We've had a stack of new subscribers to the ezine over the last month, so I thought I'd briefly run over the various sections of TTB that may be of particular interest to our ecommerce oriented readers:
That's it for this fortnight, I hope that life treats you kindly!
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In Loving Memory - Mignon Ann Bloch
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