Arranging Distribution Of Goods And Services For Your Online Business

The beauty of selling goods/services online is that you do not need to distribute your product to very store or outlet that would potentially stock your product; this of course keeps inventory costs low. By partnering with suppliers, you can have full automation of the ordering process and have a good pipeline of goods flowing between; the supplier, you, and the consumer.

Customers who buy online do not expect to be able to touch and feel a product in the flesh, in the early days of e-commerce this took sometime to sink in for consumers but now we take it as how we do business. They make an informed decision based on the information the company provides. What this does is open the door for a pre-sale. Thousands of goods are pre-sold on the web these days from books to video games to special offers on wine. The key is capture the customer before the product in question hits the shelves in the local mall, then you can beat your competition without even having the physical product.

Retail stores in comparison to the online world have a slow supply chain. They have to get the manufacturer to physically make the product then ship to a distributor, then the distributor ships the goods to the store and finally they have to get someone to make a display, price it and then put it on the shelf. You see the advantage now of getting your products online?

With a web business your main advantages are; as soon as the product is available you can sell it, (or before if available for pre-order) you do not even need to have it in stock.

If you are looking to adopt the above in your business you have to be aware that speeding up the supply chain will require effort and cooperation between your business first and foremost and the shipping company and supplier. So in other words you need to integrate your technology into your business to pull it off to its full potential.

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Australian Goods and Service Tax Basics

Goods and Services Tax is part of a taxation system governed by the Australian Tax Office (ATO). The tax applies to all product and service purchases at a rate of 10% including those take place between suppliers, manufacturers and retailers. Businesses are able to claim credits on their own payments and on any other business purchases. Only the end consumer pays Goods and Service Tax without being able to reclaim any of the payments that they have made.

Registering for Goods and Services Tax

In Australia, businesses have to meet the following criteria before they can register for Goods and Services Tax:

The business must act as an enterprise and have a turnover in excess of $75,000 in each financial year (or $150,000 if the business is a non-profit organisation)
The business must act as an enterprise and project a turnover of $75,000 or more in the forthcoming financial year (or $150,000 if the business is a non-profit organisation)
The business must act as an enterprise and provide taxi travel as part of its services
GST registrations must be made through the Australian Tax Office. This can be done independently or by using a third-party service provider.

Making Payments

Business activity in Australia is recorded on Business Activity Statements (BAS) and for Goods and Services Tax purposes, these are returned to the Australian Tax Office on a quarterly basis unless the business turns over more than $200,000 in a financial year, in which case the statements are submitted on an annual basis.

Businesses must pay the full amount of tax at the time of any business purchase but registration allows them to claim back credits on any payments that have been made. Business Activity Statements highlight the amount of Goods and Services Tax paid on transactions and the amount being claimed back as tax credits.

Keeping Records

Record keeping is an integral part of managing Goods and Services Tax payments. To claim back tax credits successfully, you will need to present a valid tax invoice from your suppliers. Tax exemptions are applied to any individual products or services that cost less than $75. A valid tax invoice will contain the name of the supplier, their Australian Business Number and the price of the product or service including any Goods and Services Tax paid.

Invoices should be kept on record for five years after the date each Business activity Statement is lodged. The same invoices must be kept for five years for income tax return purposes. Understanding the basics of the tax can help businesses keep a tighter control on spending and ensure that they claim the credits they are entitled to.

Article created by Roger Partridge on behalf of Busine

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