Saturday, March 9, 2019

online business

online business

Internet, intuition can help businesses spot next big thing -

Posted: 09 Mar 2019 03:00 AM PST

NEW YORK — When small business owners want to divine what consumer spending trends will be months from now, their methods can be as sophisticated as internet analytics or as basic as plain old intuition.

At Moriarty's Gem Art, co-owner Jeff Moriarty tracks searches on the jewelry company's website and on Google Trends, a site that analyzes what people are looking for online.

"If we see a gemstone or a style of ring or certain metal type gaining popularity in a Google Trends report, we'll create pieces and see how they sell," says Moriarty, whose company is located in the Chicago suburb of Crown Point, Ind.

While current sales trends are important for small retailers and manufacturers, it can be more critical to get a sense of what the next big seller will be, whether it's the hot toy during the holiday season, a fashion silhouette or a smartphone. Owners can get clues from internet searches, and deeper insights by looking at the data creatively and discerning how consumer tastes are changing. Knowing what's in the style and manufacturing pipeline can also help in anticipating trends.

Social media is another resource. Andrew Thornton and William Jones stay on top of trends by connecting with the customers of their jewelry and bead store.

"Social media helps inform your understanding of consumer psychology and allows you to plan accordingly and make changes," says Thornton, co-owner of Allegory Gallery in Ligonier, Pa. "It can be useful to learn who your customer is and figure out how to better serve them."

Apparel retailers should follow blogs and social media accounts of people in the fashion industry, including stylists who select clothes for celebrities, says Bob Phibbs, owner of The Retail Doctor, a consulting business. Phibbs noted that Walmart commercials during the telecast of last month's Academy Awards featured well-known Hollywood stylists.

"Follow them on Instagram and see what they're dressing people in," Phibbs says.

Taylor Mack stays on top of book trends on Instagram, where book lovers connect at #bookstagram. Mack, who owns SilverFire Books, an online used book store, says she's able to engage with customers on social media, and also see what they want.

"I do market research by taking social cues from what users post on Instagram — the products they're buying, the buzzworthy books they're reading and their lifestyles," says Mack, who lives in Issaquah, Wash.

Owners need to look creatively at sales or search data, no matter where they get it, to try to predict what's next, says Marshal Cohen, a senior analyst at NPD Group, a company that tracks consumer trends. Two years ago, Cohen saw signs that loungewear sales were going to increase. He forecast that sales of products people use when they're staying close to home — such as board games and cookware — would also increase, and they did.

"The art is being able to interpret the trend that helps you begin to gain insight into tomorrow," Cohen says.

Savvy owners will try to anticipate the end of a current trend. For example, if a color or style has been popular for a while, it may be about to wane as consumers want something new and different.

"You use the trends to try and pick the next style. That's where your intuition comes in," says Joanna Duda, owner of Pirillo Swimwear, a Chicago-based online retailer of women's swimsuits. Duda has seen a lot of yellow clothes in recent seasons, so she's turning to other hues for her upcoming collection.

While some owners go to trade shows or expos to spot likely trends, or ask their manufacturer vendors, Phibbs warns that may not be the best approach. For one thing, the merchandise at trade shows may not be as new as it looks. Phibbs says there's a lot of repetition as manufacturers have copied one another, and their merchandise has likely been shown on the internet already.

Moreover, Phibbs says, manufacturers want to sell you what's in their inventory — they want to clear it out so they can move on to their next line. A better strategy is for a small business to make itself a big, and therefore more important, customer for a manufacturer, he says

"When you're a bigger fish, they come to you and say, 'we're thinking of this for next year,'" Phibbs says. That way, a small business can get the jump on competitors.

But some trade shows do help owners forecast what trends will be. Thornton and Jones head to Tucson, Arizona, every January and February for a series of jewelry, gem and bead shows. They see the raw materials that go into jewelry, and learn what new stones, beads and other jewelry components are headed to market.

"We're seeing what is available before it's available," Thornton says.

While analyzing search data from Google and also is important for Kelly Hsiao and Will von Bernuth as they run their skin care products business, so are news reports. The owners of Block Island Organics get alerts on their phones so they'll know when a law is passed or study issued about skin care and sunscreen products or their ingredients. Consumers can react to the news, and the couple may have to pivot, especially if there's a new law.

Last month, the Food and Drug Administration proposed new regulations governing sunscreens.

"It could change our entire business," Hsiao says.

When online tax prep is free, you may be paying with your privacy - Chicago Daily Herald

Posted: 09 Mar 2019 04:27 AM PST

Nothing is certain except death, taxes ... and tech companies making grabs for your data.

So this tax season, I started asking why, exactly, all those "free" online tax services are free? One used by more than a million Americans had an alarming answer: Credit Karma Tax, takes the intimate details of your tax returns -- like how much you earn and pay for your mortgage -- to target you with financial advertising.

I know it's hard to argue with free. But for too long, we've been letting free technology blind us to a really important question: How is somebody going to make money from this? In Silicon Valley, an adage goes, "If the product is free, that means you're the product."

You probably already suspect products such as Intuit's TurboTax and H&R Block offer limited free service as bait to sell you fancier paid services. Then there are a dozen free, no-upsell services run pro-bono by the tax-prep industry -- but only for people who earn less than $66,000 per year. (Dubbed "Free File," these services are often buried; you can find them linked directly off the IRS website.)

A third kind of free tax prep, offered by Credit Karma, is blazing a new path: paying with your privacy. Available since 2017, Credit Karma Tax is an extension of the credit score website that's already used by 85 million people. The tax service is really free -- even if you use complicated IRS forms. It makes money by showing you tailored "offers" for credit cards and loans based on a profile of your financial life, which includes your tax returns unless you adjust a setting to opt-out.

It's a bold grab for personal data. It's entirely legal. And it's already inspiring other free services that want to target advertising using tax data.

Credit to Credit Karma's CEO Kenneth Lin: He spoke openly with me about his business. One reason Credit Karma got into the tax game, he said, is because it rounds out the data it needs to determine when customers might be eligible for, say, a new personal loan. Credit Karma can make between tens and hundreds of dollars each time someone accepts one of its loan or card offers -- and the more accurately it can target us, the more money it makes.

"We're gathering information on behalf of the users," he told me. "We help consumers find the very best financial services products leveraging the information algorithms on our site." As Forbes once described Credit Karma, it's Big Brother with benefits.

There's a fine line between useful and creepy with surveillance. For some, Credit Karma's offers might be acceptable, even time- and money-saving. To me, Credit Karma Tax is taking a business idea that hasn't worked out well for us with Facebook and applying it to even more sensitive information.

To really understand what free costs, you have to follow the data.

Taped on my desk are four questions I've learned to ask any business that wants my data:

1. What information is being used?

2. Who is it being shared with?

3. How secure is it?

4. How long are they holding on to it?

They bring some clarity to the exchange we make with Credit Karma for free tax prep.

It uses perhaps the most intimate personal data outside of health records. No one needs reminding on that -- Donald Trump has gone to great lengths to keep his taxes private. While credit bureaus and data brokers already collect information about your finances, some details are hard for that industry to come by, such as your cash flow, mortgage deduction and savings yield.

Today, Credit Karma says it is using income data from customer tax forms to inform its personal loan business. It isn't, so far, using information like who's about to get a big refund or bill -- but Credit Karma also hasn't imposed any limits on tax return data it could use in the future.

You do get the opportunity to opt out of syncing up your tax returns with the other data the company uses to target ads. Credit Karma won't say how many people choose to opt out, and its software doesn't present it as a choice about privacy.

So who does Credit Karma share your data with? "We don't sell data. We don't broker data. We don't work with hedge funds. We're squarely focused on creating a great user experience and being a trusted adviser," said Lin. This is required, in part, by law. The IRS forbids tax preparers from selling or sharing taxpayer data without express consent.

Credit Karma, like Facebook, doesn't need to sell data to make money. Its business is selling access to you through highly targeted offers on its website, which provides advice on how you can improve your credit. Marketers waste money mailing card offers that we don't want or can't get approved for, and have flocked to advertise with Credit Karma instead.

Lin disagreed with my Facebook comparison. "We're not letting advertisers target you. What we're actually doing is finding the products you are eligible for in the financial services market," he said.

Credit Karma is not doing some of the things we've come to dislike about Facebook. It doesn't have a system for third parties to access data, and advertisers have no way of retaining your data (unless you permit Credit Karma to pre-fill a loan or credit card application for you). Credit Karma is doing the things lots of other Internet companies do -- just with a much more sensitive type of data.

How secure is your tax data with Credit Karma? In 2014, before it had a tax service, Credit Karma did get in trouble with the FTC for not securing its app, potentially putting credit card details and Social Security numbers at risk. It says it has fixed that now, offers security protections like two-factor authentication, and pays ethical hackers to look for flaws. Credit Karma says it hasn't ever suffered a data breach.

Better hope it stays that way. When you consent to sync up your tax return in its marketing system, you give Credit Karma the legal right to use the data for 10 years. That's forever for a start-up, during which time management could decide on new uses for your data. If you decide to shut your account, the company says it can take up to two years to delete your data entirely, due to regulatory requirements.

A page on Credit Karma's website explains its business model, a move more free online services should emulate.

Is it worth it?

Assuming you don't quality for one of the Free File services, doing taxes online might cost from $50 to $150.

My privacy is worth more than that, especially given the open-ended and long-term potential uses Credit Karma has for my tax data.

"Being able to file your taxes in a safe and easy way is a good value proposition," Lin said.

You could use Credit Karma Tax and click that opt-out box. But Lin says that pulling all your data into one place is actually a big part of the site's value. "If financial services companies are going to be leveraging this information, let us tell you how you can get ahead in that system," he said.

People who use the offers picked by Credit Karma's systems not only get better rates, he said, but end up doing less damage to their credit scores by applying for financial products they can't get.

Those arguments make some sense when it comes to bringing transparency and control over the shadowy world of credit reports. But why add tax returns to tech company dossiers on us? The solution to a world where too much data is being collected is not more surveillance.

Silicon Valley is taking inspiration from Credit Karma's model. When TurboTax users finish doing their taxes, some now get a prompt to import their data into a sister site named Turbo, launched in 2018. Run by Intuit independently from its tax prep software, Turbo also uses financial data to generate personalized advice and offers for credit cards and loans. (Sharing tax data is not a requirement to use any of TurboTax's free services.)

Credit Karma is more upfront than many other data companies about how it makes money from our information. Its website has a page illustrating its business model, though it doesn't tie it to the free tax prep.

There's more than just an individual privacy concern at stake.

"This is the pay-for-privacy model," says Adam Schwartz of the Electronic Frontier Foundation, a digital rights group in San Francisco. "I'm very concerned about us moving into a society of haves and have nots."

Free can have all sorts of hidden costs.

Camas advances to the final for online business show - The Columbian

Posted: 12 Feb 2019 12:00 AM PST

Camas has been selected as one of the top six finalists for the online show "Small Business Revolution Main Street," advancing to the final round of the competition to decide which small town will receive the starring role in the series' upcoming fourth season.The winning town will receive a $500,000 investment to revitalize its main street corridor by providing makeovers to a handful of local businesses. The show's hosts, former ABC reality show star Ty Pennington and Amanda Brinkman, will spend six months getting to know the town and building the improvements while the eight-episode season is filmed. The season will air this fall."We are beside ourselves with excitement to be in the top six," Carrie Schulstad, the Downtown Camas Association's executive director, said in a statement. "This is an incredible opportunity for all of us here in Camas to receive not just funding, but national exposure along with advice and mentorship from nationally renowned marketers."The show is produced by Deluxe Corp., a small business and financial marketing consulting firm based in St. Paul, Minn. It began as a way to spread the word about the company's services, according to Deluxe spokesman Cameron Potts, but it evolved into a broader revitalization project. The show airs on Hulu and the website was among an initial list of 20 finalists selected in November from more than 12,000 applicants. The roster was narrowed to 10 finalists in December, and Pennington and Brinkman announced the top-six finalists in a video posted on the show's Facebook page on Tuesday morning.

Amazon can be a 'necessary evil' for small retailers around the world - CNBC

Posted: 08 Mar 2019 01:28 AM PST

For Mike Hirschkorn, there's a simple, harsh reality when it comes to making sales: Amazon is a "necessary evil."

Hirschkorn oversees the U.K. operations of Gorilla Sports, a German-headquartered online retailer that sells sports equipment like free weights and cardio machines. He said roughly half of the company's U.K. sales come via

"Basically if you're an online retailer in the U.K. you have no choice," Hirschkorn told CNBC's Beyond The Valley. "If you don't sell on Amazon, you don't have a big business."

Retailers like Gorilla Sports rely on big e-commerce firms to get their products in front eager consumers seeking convenience and affordable prices. The difference, according to Hirschkorn, is a customer base of a "few hundred" or "few thousand" locally versus "millions" with Amazon.

But the visibility and accessibility big tech companies give to smaller businesses around the world come at a price.

Hirschkorn said Amazon takes an 18 percent cut, including VAT, of the sale of each product, which he calls a "very hefty chunk" in a business with slim margins. The company has tried to shift sales away from Amazon to its own website, but soon discovered it went from paying one tech giant to another.

"It used to be that we were very keen to drive traffic from Amazon to the website because each sale was cheaper, but now we're spending almost as much as a percentage of our sales advertising on Google as we would be paying fees to Amazon," Hirschkorn said. "Either way one of the big Silicon Valley companies is going to win."

"We spend billions of dollars each year to help our selling partners succeed in our store, driving traffic, operating the servers and infrastructure that keep our online store open at all times, and combating fraud and abuse. Our biggest single capital expenditure is our fulfillment and distribution network, which directly benefits our selling partners, who now have as many units in that network as Amazon itself," a spokesperson for Amazon told CNBC via email.

"Our investments allow our selling partners to focus on their products while reaching customers throughout the world, leveling the playing field and lowering entry barriers. Today, our selling partners are outperforming Amazon retail -- they have grown from zero to 52% of paid units sold, and continue to grow twice as fast as Amazon's own sales," the spokesperson further added.

Google did not respond to CNBC's request for comment.

Consultancy PwC found 59 percent of the people polled in its Global Consumer Insights Survey shopped online at Amazon, or Alibaba's TMall in 2018. Amazon sold more than 100 million products during its big "Prime Day" event last year, while Alibaba racked up more than $30 billion in sales from its "Singles Day" event alone.

Many small retailers have no choice but to use Amazon or Alibaba, and reluctantly agree to those platforms' terms and conditions.

Jason Tay, co-founder of retailer Fair Havens, agreed that Amazon's scale and volume are incomparable even to other, large online selling platforms. Fair Havens sells natural skincare products in the U.S. through the e-commerce giant's fulfillment program and also locally in Singapore through his own site and other local platforms such as Alibaba-owned Lazada.

"When you compare the different sales channels ... the others pale in comparison to the scale of Amazon," he said. "We sell in the States on Amazon, as well as eBay, and for every 1,000 sales that we have on Amazon, we maybe have 3 on eBay."

Tay explained that while Amazon's cut on sales are higher than other platforms, it is still comparatively lower than running a physical store, which would have sizable overhead, fixed costs including store maintenance, managing inventory and hiring employees.

Even with the presence and influence of big tech, there has never been a better time to start an online business, he added.

"I personally believe that there has never been a greater time in history to start your own small business or there has never been a greater opportunity for small businesses than the time we live in," Tay said, adding, "With very little capital, and with very little risk, you now have access to the global market."

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