ETD: 957 New Business: Drop Catcher; Tax Time; Pam Danziger
speaker at expo
E-Tailer's Digest
etd_post at gapent.com
Thu Feb 23 03:58:50 GMT 2006
E-Tailer's Digest --- Everything for the Retailer
Issue #0957 February 23, 2006
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] New Business: Drop Catcher
[3] Tax Time
[4] Pam Danziger keynote speaker at expo
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[1] Greetings.
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Hi All:
Today we have a piece on a new business
opportunity - Drop Catching. Guess what that's
all about? You are probably envisioning varies
types of droppings. Read section 2 below.
It's tax time here in the U.S., and time for us
to think about filing taxes with the IRS. We
have some tips that may be of use to
you. Perhaps it's time to consider a new type
organization - Corporation ("C" or "S"), LLC or
partnership. We have some helpful information for you.
List member Pam Danziger will be the keynote
speaker at the Hearth, Patio & Barbecue
Expo. She will be talking on the "Top Luxury
Appointments in Affluent Consumers' Homes —
Indoors It's Luxury Fireplaces and Outdoors It's
Luxury Barbecue Grills" If you are in Salt Lake
City, UT on March 9, you may want to listen in.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, LLC
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] New Business: Drop Catcher
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According to an article in the WSJ, there seems
to be a new online business that is doing quite
well - "drop catchers." These companies catch
domain names that have been dropped, either
intentionally or because somebody let them
slip. Then they auction off the names.
One poor lady (Mrs Orr) in Chicago neglected to
pay her $9 annual fee, and lost her real estate
domain. The company that picked it up, was Lease
Domains Inc., which is run by a 21-year-old
graduate student, Anthos Chrysanthou, who works
out of his parents' house in a Chicago suburb.
Mr. Chrysanthou says his two-year-old company
owns more than 2,000 domain names, many obtained
through a process called "drop catching" --
snagging names owners have let expire, either
accidentally or because they no longer want them.
"I liken the whole situation to tangible real
estate," says Mr. Chrysanthou, who is pursuing
his master's in business administration at St.
Xavier University in Chicago. "If you're not
paying your mortgage or your taxes on it, it's going to get taken away."
Mr. Chrysanthou is one of hundreds of drop
catchers who either resell names or use them for
Web sites loaded with advertisements. (Ms. Orr's
former site now features text ads for real
estate.) Many drop catchers have learned the
trade in the past year, seeking a piece of the
booming market for domains spurred by a surge in
online advertising. The practice also has gotten
a lift from providers of domain services, such as
SnapNames.com Inc., Pool.com Inc. and GoDaddy.com
Inc., which have introduced tools aimed at
helping people grab expiring domains.
The services circulate lists each day showing
which domains are about to go up for grabs.
Auctions are held for particularly in-demand
names, and prices can go sky-high: A1.com sold
for $260,250 in December, after its previous owner let the registration lapse.
DNJournal.com, a publication that tracks the
domain industry, reported 2,291 sales of expired
domains in auctions last year, with winning bids
totaling a combined $11.5 million. That was up
from 885 sales totaling $4.2 million a year
earlier. Auctioneers don't report all deals to
DNJournal, and the site doesn't track deals valued at less than $500.
Roughly 20,000 expired domain names become
available each day, according to industry
executives. While many were consciously discarded
by their owners, others are the product of a
domain-registration system that many users don't understand well.
When a user registers a domain name, it can be
reserved for as many as 10 years, typically for
$80. But many choose a one-year registration
because it is less expensive, often about $10,
and because they may not want the site for a
longer period. At the end of the year, the domain
registrar generally sends renewal notices to the
owner, but such messages can be missed if the
owner has changed email addresses in that time.
Under rules administered by the Internet
Corporation for Assigned Names and Numbers, the
group that oversees the assignment of Web
addresses, domain registrars such as GoDaddy and
Network Solutions LLC have as many as 45 days
after the expiration date to notify the official
domain registry whether a name is being renewed
or deleted. Typically, registrars have given
users a grace period -- sometimes as long as 45 days -- to renew their name.
If a name is deleted, ICANN guidelines then call
for a 30-day "redemption grace period," during
which the original owner can still claim the
name. If there is no claim in the redemption
period, the name is dropped from the registry
after a five-day holding period, and anyone is entitled to seek it.
For the .com and .net registries, managed by
VeriSign Inc., names drop starting around 2 p.m.
Eastern each day, all year long. What follows is
a process that some in the industry call
"pounding." As the names drop, Internet companies
that help users acquire expired names send rapid
computer commands to the registry, seeking to
grab the most valuable names. It is "a mad rush,"
says Dan Rubin, who runs justdropped.com, which
helps people identify and acquire expired
domains. Registries for other domain suffixes
drop names at different times of day.
The drop process underwent a key shift starting
in late 2004. That is when SnapNames started a
new service for grabbing domains. The company has
signed exclusive agreements with more than a
half-dozen registrars, including Network
Solutions and Moniker.com, under which the
registrars transfer expired domains to SnapNames,
and SnapNames auctions them off. That way, names
that people are interested in don't go through
the traditional drop process that is open to anyone.
GoDaddy, the largest domain registrar, has
introduced its own auction service for expired
names that were registered with it, as have other
registrars, as they seek a cut of the action for
expired names. They begin auctions for names even
before the names have officially expired but warn
auction participants that the original owner could still redeem the name.
For domain owners, the new system means names can
be grabbed from them even more quickly than they
could before. Instead of going through the full
deletion cycle -- which went as long as 75 days
-- names are being transferred to new owners in 30 to 45 days.
Paul Twomey, chief executive of ICANN, says some
people in the domain industry recently have
raised concerns that the guidelines governing
expired names are "being utilized in ways that
were not originally intended." But Mr. Twomey
says no one has proposed a formal change in policy to address the issue.
Tim Ruiz, vice president of domain services for
GoDaddy, which transferred the name, says, "We
make every attempt to give ample opportunity for
registrants to renew." He says the company gives
registrants 30 days to claim a name after it has expired.
If a corporation loses a domain name that it
believes is copyrighted or trademarked, it can
seek to recover the name by appealing to an
arbitration panel under ICANN's
dispute-resolution policy. It also could take the
domain's new owner to court, though that can be more expensive.
Details at...
http://online.wsj.com/article/SB114057161829579643.html
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[3] Tax Time
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It’s that time of year again, and April 15 will
be here before you know it. You can get an
automatic 4 month extension to August 15, merely
by filing a form 4868. You can also request
another extension until October 15, if you can't
make August 15. The extension is for
FILING. You must still PAY if you owe taxes by April 15.
Here's some tax tips. See your tax advisor for detailed tax advice.
o Travel expenses are not 100% deductible (read Publication 463),
o Charitable deductions are completely
deductible from profit before taxes in a
corporation. In the single-member LLC or
proprietorship they cannot be subtracted from
company revenues as a business deduction (read Publication 526).
o If you incurred expenses starting the venture
and they are typical of this type of business
enterprise then itemize them as organizational
expenses, establish them as a fixed asset account
and amortize a straight-line depreciation of
those expenses over a period of five years.
o Remember that C corporations result in double
taxation tax on company profit retained after
expenses and dividend distributions at the end of
the tax year and tax on the shareholder for
dividends distributed during the tax year.
o S corporations have more flexibility regarding
double taxation dividend distribution is
typically and flexibly higher for the
self-employed business owner, reducing the FICA
expense. The dividends are then treated as
personal income on Form 1040 whereby itemized
deductions can reduce income tax exposure.
It’s too late to make any changes to the legal
structure of your business regarding 2005 income
taxes. On the other hand, this is definitely a
good time to consider the advantages and
disadvantages of each type of business structure
and consider whether or not to change the company’s standing as a legal entity.
Proprietorship
The simplest of all legal business
structures. Schedule C is used for filing taxes,
and is attached to your personal Form 1040. The
net profit from your business (gross income less
business expenses and self-employment taxes) will
commingle with personal and spousal sources of gross taxable income.
One of the most crucial, least understood
expenses for the self-employed operating as
proprietors and S corporations is self-employment
tax. Many proprietors wait until the end of the
year to make a lump-sum payment incorporated into
the annual income tax returns. The more
profitable business is likely to feel the sting
of high self-employment taxes. Read the
Instructions for Schedule SE to learn how to
balance this tax expense on a monthly or quarterly basis.
Corporations. Corporate income tax is prepared
separately. The C corporation equivalent of Form
1040 is Form 1120. The S corporation uses Form
1120S. C Corporation income is taxed to the
corporation and to you as an individual, which is
why small businesses don't use the C corporation.
Partnerships & LLC’s
If your proprietorship or corporation is a member
of a partnership or an LLC with 2 or more members
there are additional IRS forms to be filed. All
partnerships must file Form 1065, whether or not
all net profits are distributed among its members.
The single-member LLC is treated as a
pass-through entity for income tax purposes. Just
as with the proprietor, the single-member LLC will use Schedule C.
Multi-Owner LLC’s are treated just like a
partnership. Regardless of the legal business
structure of each member, the LLC must file Form 1065.
Startups
According to a study conducted by the U.S. Dept.
of Labor and the SBA, as of 2003, about 60% of
all new businesses began at home. And 3/4 of them
still work for an employer during this startup
period. Many of these entrepreneurs are unaware
of a long list of expenses incurred in
maintaining the home that can be applied to
business expense deducted from the company’s
income before taxes. So carefully read IRS
Publication 587 (Business Use of Your Home).
http://www.irs.gov/pub/irs-pdf/p587.pdf
Whether or not you use tax software, or rely on
another party to prepare your returns, you can
view the listing of tax forms provided in
downloadable PDF format by MyCorporation.com.
http://www.mycorporation.com/taxforms.htm?p=mycorpnewsletter
The IRS also has a lot of information available
re: business tax laws, filing requirements,
publications and forms at the IRS Tax Information
for Businesses page.
http://www.irs.gov/businesses/index.html and at
the IRS’ Small Business & Self-Employed One-Stop
Resource page. http://www.irs.gov/businesses/small/index.html
Not all tax conditions apply equally to all
business concerns. Contact a financial advisor
and/or accountant who is clearly qualified to
examine your specific business activities and advise you accordingly.
And it you want to consider forming a corporation
or an LLC visit http://www.mycorporation.com/affiliate.asp?resellid=11624584
Our thanks to MyCorporation for their excellent
newsletter and information regarding business entities.
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[4] Pam Danziger keynote speaker at expo
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The Top Luxury Appointments in Affluent
Consumers' Homes — Indoors It's Luxury Fireplaces
and Outdoors It's Luxury Barbecue Grills
Pam Danziger to give keynote address at Hearth, Patio & Barbecue Expo
Stevens, PA February 16, 2006 — Today luxury
consumers are investing in their homes in
unprecedented numbers. Recent research from
Unity Marketing found that about two-thirds of
luxury consumers were involved in major home
redecorating or remodeling projects in the past
year and even more, 69 percent, have plans for
major home work in the coming year.
When it comes to the luxury appointments in their
homes, the most popular indoor luxury is a
fireplace, either wood or gas-burning, a feature
in 65 percent of affluent consumers’
homes. Fireplaces are followed by home offices
(64 percent) and whirlpool baths, indoor spas
and/or steam rooms (34 percent).
Outdoors luxury barbecue grills are the top
luxury home appointments, owned by some 70
percent of luxury consumers, followed by patio
and outdoor lighting (49 percent) and luxury
patio and lawn furniture (38 percent).
“While companies that sell products that add to
the value of luxury consumers’ homes, like indoor
spas, fireplaces, kitchen appliances, and outdoor
kitchens, are enjoying a vibrant demand for their
products, they can't rest on their laurels
anymore and sell home products mainly on brand
reputation. Luxury consumers today want more
than just a status label. They want home
luxuries that enhance their personal pleasure and
enjoyment in the home. So along with superior
quality, cutting edge style and design and great
value for the money, luxury consumers want things
that deliver the ultimate luxury experience,”
says Pam Danziger, president of Unity Marketing
and author of Let Them Eat Cake: Marketing
Luxury to the Masses — as well as the Classes.
Shift from Old Luxury to New Means Changes for
Marketers and Retailers that Target Luxury Consumers
“For marketers and retailers that sell home
luxuries, gaining a better understanding of
luxury consumers’ passion for their home is
critical today as the whole luxury market is
shifting from old luxury to new,” Danziger says.
“Luxury consumers no longer pursue a
conspicuous-consumption lifestyle. Rather, ‘new
luxury’ consumers are more interested in life
changing experiences than in buying more
stuff. Luxury home marketers and retailers,
therefore, have to focus on how the products they
sell and the brands they carry deliver a superior
luxury experience to the consumer. Hearth,
patio and barbecue retailers play right into this new experiential trend.”
Danziger to Speak Thursday, March 9 at Salt Plaza Convention Center
To help hearth, patio and barbecue marketers and
retailers gain new insights into the drives and
motivations of the luxury market, Pam Danziger
will present a speech entitled, “The New Luxury
Home: End of Cocooning and Age of Connecting —
Implications for Specialty Retailers,” on
Thursday, March 9 at 7:30 8:45 a.m. at the
Hearth, Patio & Barbecue Expo 2006, at the Salt
Plaza Convention Center in Salt Lake City,
UT. For more information about attending the
Hearth, Patio & Barbecue Association’s annual
convention, click this link
http://www.hpbexpo.com/showinformation/educationprogram.asp
If you would like to schedule Pam Danziger for a
corporate meeting, presentation or
convention, call Unity Marketing at 717-336-1600.
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