Answering Reader & Listener Questions
Description
You asked, we answered. Welcome to our first ever listener requested episode where we dive into a wide range of topics from why certain markets aren’t great for eCommerce and what the best Shopify apps for analytics are, to whether Drew’s dreamy salt-and-peppered look is natural.
The Oracle of Times Square, the man with all of the answers, Drew Sanocki of NerdMarketing.com is here to help answer listener questions.
(With your hosts Andrew Youderian of eCommerceFuel.com and Drew Sanocki of NerdMarketing.com)
Andrew: Hey, you guys, its Andrew here and welcome to the eCommerceFuel Podcast. Thank you so much for joining us again on the show today. And today we’re going to be taking your questions, reader questions from the blog, from Twitter, all over the place. We’re going to be diving into a wide range of topics. And joining me via the Oracle of Times Square, the man with hopefully all the answers today, Drew Sanocki.
Drew: Nice. That’s what I was going to say, the man with all the answers.
Andrew: The man with all the answers. I’m just going to sit back, drink some coffee, and let you take the lead on this one, Drew. Drew Sanocki…
Drew: I’m ready.
Andrew: …of Nerdmarketing.com. Drew, how are you doing, man?
Drew: Doing well.
Andrew: Good.
Drew: Just glad to be here.
Andrew: Yeah, and we haven’t done it yet, a reader question episode yet. I’m kind of surprised.
Drew: Like ever?
Andrew: No. I don’t think we’ve ever done that.
Drew: We’ve had episodes where we’ve talked about forum threads.
Andrew: Forum threads, we’ve had a few spawned by questions from listeners and readers, but looking forward to doing this one.
Drew: Soon we’re going to be doing live reader questions and answers, right?
Andrew: We’ll have like a…
Drew: This is not live. They can actually call in with a question.
Andrew: That would be cool. We may have to try that. I know a bunch of other places. They get a phone number and set up and…we’ll have to look into that, but in the meantime, if you’re interested in submit one the old-fashioned way, ecommercefuel.com/contact, or you can hit us up on Twitter on @youderian @ecommercefuel, or Drew, are you @sanocki or…why do I always forget yours?
Drew: Drew@drewsnakie.com.
Andrew: Sure, that’s your Twitter handle.
Drew: @drewsanocki.com
Andrew: @drewsanocki.
Drew: There is no @nerdmarketing.
Andrew: That’s a shame because…
Drew: Easier.
“Why is electronics a bad eCommerce market?”
Andrew: Yeah, a little bit easier, but hey, let’s dive in. Enough banter. Let’s go ahead and get into your questions.
So first question Drew. “First off, thank you for the valuable content you and Drew and your guests make available to the world. My question, common advice for those starting in eCommerce is don’t start something in electronics market, and yet that seems exactly what you have done at Right Channel Radios. The experts keep telling everyone not to go into this business market. Because of that I have a very hard time grasping the business model around electronics. Can you help me understand why you’re doing this and how you’re making it work? Thanks so much. Perry.”
I’ll dive into this maybe from my experience. Drew, you got any thoughts on the electronics market and eCommerce?
Drew: I’m curious why is that common advice?
Andrew: Not to get into electronics market?
Drew: Yeah.
Andrew: I think because the margins in general are razor-thin in the electronics market. At least, what I found like…
Drew: And typically you’re like a re-seller? Or is it don’t develop your own electronics product?
Andrew: I think he’s probably thinking more along the lines of a re-seller if I had to guess. But either way, let’s take it from both sides, if you’re a re-seller, the margins are small, and so you understand where…how my business makes us work there. We have most of the products we sell, the radio component, which is really the electrical component. The margins are probably…They’re tiny. If I have to guess, we’d make probably 10% of our profits off the radios. We make most of it, almost all of it, on the accessories, the non-electronic accessories, antenna, cables, things like that. You…
Drew: So that’s how you’re making it work?
Andrew: That’s how we’re making it work. And I think same thing happens, the big guys, Best Buy, a lot of these other re-sellers, they don’t make money on the big screen TV. They make it on the accessories, the warranties, the DVD, the $40 HDMI cable, that kind of stuff so. And then if you look at it on the manufacturing side, you can definitely make electronics, but depending on the complexity, that can also be pretty involved as well. So hopefully that helps. Not impossible, but it can be more difficult to do especially if you’re a re-seller.
“What do I do if I sell from a sales tax free state?”
Andrew: Next question comes from Mark. Hey, Mark. “He says I’m curious about sales tax and the sales tax use forms that I need to fill out and return to distributors. My eCommerce business is based in New Hampshire, where no sales tax is charged.” Awesome New Hampshire, Montana is the same way. Love it.
“Most distributors require re-seller certificates from all of the states. Do I really need to do this? Are all eCommerce businesses getting re-seller certificates from all 50 states? It seems crazy to apply for a business license from all of them.” Drew, thoughts?
Drew: It certainly does seem crazy. I don’t remember doing that. This is probably where I got led away in handcuffs again.
Andrew: Congratulations on being out for a couple of years though, by the way, that was via…but also your parole terms are a little tough. We could never drink when I was in town, but apart from that…
Drew: Have you heard of this?
Andrew: No. Mark, I think something’s wrong. Usually a distributor, when I’ve dealt with this, they will ask for a certificate, a re-seller certificate from the state that I’m in, or the state that I have Nexus in or other offices, but I’ve never heard of one needing it from 50 states. That seems crazy.
Drew: Yeah, at all. If you Google business Nexus and that will be due down this rat hole trying to figure out where your business is based, based on employees and contractors and all that stuff and warehouses. But if it’s online only and you’re based in New Hampshire, then I don’t think you need to worry about re-seller certificates from other states.
Andrew: Yeah, definitely. And I’ve had people ask me for re-seller certificate, and Montana, I’m not sure issues one because we don’t have sales tax, so it’s not an issue. And so I think I just wrote up a letter along the lines of, “Hey, I’m only based in Montana, and we don’t charge sales tax. We don’t have these. I’m sorry. If you can, assuming, any sort of documentation you need, let me know, and that worked for my needs.
Drew: So you recently had a daughter.
Andrew: Yes.
Drew: Did you consider naming her Nexus? Because I thought, I considered naming my son Nexus because I can move him around. It’ll be like, “I don’t have Nexus in that state. Nexus isn’t in that state. He’s in this state right now.”
Andrew: No, that is brilliant. And if any…
Drew: You should play dumb with the IRS.
Andrew:And if anyone does it, we will have you on the episode, on the show because that’s awesome.
Drew: It could be a pet too. You don’t have to name your kid if your kids Nexus.
Andrew: Probably a better, a safer route to go with. I did think about, if we had a son, I did flirt with the idea of naming his middle name Danger so he could legitimately say, especially when he’s older and he’s starting to date, his middle name is Danger. But all the women I spoke with thought that was a terrible idea. Most of the men thought it was a brilliant idea, and I wasn’t able to sell this well as I hoped to Annie.
Drew: That’s brilliant.