Introduction to Froogle
Froogle is a new service from Google that makes it easy to find information about products for sale online. By focusing entirely on product search, Froogle applies the power of Google's search technology to a very specific task: locating stores that sell the item you want to find and pointing you directly to the place where you can make a purchase.

It is located at http://www.froogle.com and http://froogle.google.com.

The Froogle Engine itself is organized into Categories. There are 14 categories.

Shoppers can either drill-down on any of them or search directly by keyword. Shoppers can also limit your search to a specific category. Search results are limited to one product per store. Each result displays a thumbnail image of the product to the left, with the product's name, price and description listed to the right of the thumbnail. The store where the product is available is also listed, along with a link to see all results related to your keyword that are available at that particular merchant.

Froogle's emphasis is on helping users find products, rather than providing product information, reviews, and other associated information found on other shopping search services.

What does it mean to you? As an extension of the Google search engine that millions of people around the globe use daily to research products before they purchase, listing your product in Froogle is a free way to extend the reach of your marketing efforts to millions of customers.

There are two ways you can get included in Froogle: The first, though not the most effective is to let Google or Froogle crawl your site and pick up the information for itself. This is likely to result in inaccuracies in your product listing. The second, and more effective way is to submit a data feed directly to Froogle.

Create An Account With Froogle
To get an account you will need to send Froogle the following details about your company and you:

1. Your contact information

2. Store Information
a. Name
b. URL

3. Product information
a. Numbers of products
b. Product Categories

4. Affiliate Information

You can either use this form http://services.google.com/froogle/merchant_email Or send them an email at feeds-support[at]google.com

To be eligible to submit a feed, you must sell products via your website and ship them to the buyer. If you sell services or custom products that do not have fixed prices, use your website only to promote an offline business, or are an affiliate marketing site, your site content may be crawled by and included in Google's web search, but it will not be included in Froogle. Nor will Froogle accept a data feed under these conditions.

Google say it takes anywhere between 5 to 10 business days to respond. My experience and from what I've heard from other merchants is that it takes about a week. You will receive an email with your account information: login ID and password. This last email will also contain FTP instructions.

The Data Feed Format
The data feed file format is: A tab-delimited text file The first line of the file is the header - must contain field names, all lower-case Use the field names from the table below, and in the same column order One line per item (use a new-line or carriage return to terminate the line) The following field elements are forbidden as part of the basic format. If you want to include them as part of the basic format, products that contain errors will be dropped from the feed.

Tabs, Carriage Returns, or new-line characters may not be included in any fields, including the description. Exactly one tab must separate each field, If there are extra tabs inserted between fields in a line, or at the end of a line, that product will be dropped. HTML Tags, comments and escape sequences may not be included- description must be plain text.

Basic Fields
The basic data feed format consists of your product information in the following order: Field Name Description product_url This is the URL of your product page - where you display the product for sale. description Full descriptive text about the product from your web site, up to 5KB. price The current selling price of the product image_url URL of the image, for eg. http://www.mysite.com/images/golfball.gif category Category to which the product belongs offer_id Unique identifier - try not to use your internal product ID, as the offer_id can be used to offer the same product with add-ons for a different price.

There are more fields called Extended fields that you can use to further specify your product information, such as color, size, shipping cost and more.

Optional extended headers may be used to flag special features of your file. You must use these header parameters if you use HTML escape characters, or include book, music or video products or use quotes in your product descriptions or names.

If you have many items in your feed, only some of which change daily, you can provide updates-only files as a more efficient way for you to delete, add, or change offers for items. You can upload a full file later if a large percentage of your inventory changes. To download Froogle's official data feed format in PDF format, visit: http://www.siteall.com/froogle/datafeed.asp

Rules To Follow When Creating The Feed File
Quotes, Tabs & Newslines
When quotes, tabs or newlines are present in your name, description or other fields, you must wrap the entire field (that contains the quotes or tabs) in quotes. You must also set the quoted extended format header value to "YES".

Submission Frequency
Data feeds for your online store must be submitted at least once a month. You can however submit your data feed file once a day.

Currently the FTP server does not accept more frequent updates and returns an error.

Currency & Availability
Right now, Froogle accepts only prices in US dollars. All your products must be currently available for sale.

Removing Products
To remove certain products from the data feed you could either Set the expiry date of the offer to some predefined date or Create and send an update file with the products marked for delete. Or when you send in the next feed remove those products completely. Upload Your Data Feed You can upload new feeds daily, weekly, or monthly. You must upload a new feed at least once a month, because Froogle will automatically expire your old data after a month.

The content in your feed must be the same as the content visible to users on your web site. The description and price you provide in the feed must be the ones on your product URL page. The image URL should be that of the actual product image on the product page. After you upload your feed for the first time, notify via email at feeds-support@google.com so that Froogle can confirm receipt and verify the accuracy of the format.

Be sure to include your name, title, phone number and username in the email. Is it Worth It? If you spend just a little time surfing around Froogle, you'll see very quickly that some products have clear and enticing descriptions, while others seem to be random snippets from the product page. It's not enough to show up in the search, if the searcher doesn't click through to your site.

Those with clear descriptions are from the sites that have taken the time to give Froogle their data feed. And those are the merchants who are winning on Froogle. So, don't wait; submit your product data feed today!

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Try FroogleFeeder to create, verify and submit your Froogle data feed files easily & efficiently.

What are Blogs?
Having heard the term previously but not having paid much attention most are just to afraid to show their ignorance and ask the question, what is a blog? Lets face it; the term blog does not conjure pleasant images.

Blogs are web logs that are updated regularly, usually on a daily basis. They contain information related to a specific topic. In some cases blogs are used as daily diaries about people's personal lives, political views, or even as social commentaries. The truth of the matter is that blogs can be shaped into whatever you, the author, want them to be.

Where Did Blogs Come From?
The roots of blogging can be traced back to the mid 1990's. Who the very first blogger actually was is unclear, as the art of blogging did not really take hold until 1999. The original "weblogs" were link-driven sites with personal commentaries. The very first blogs were human guided Internet web tours. While initially thought of as diaries or online journals, blogs have evolved into the latest fresh web content.

The Future of Blogs
A buzz word in techie circles, "blogging" is the wave of the future. Whether its a fad, or proves to be a new way to communicate with existing and potential customers it deserves at the very least a cursory look.

Why is Blogging Helpful to Businesses or Individuals?
Just as animated .gifs were once cool, blogging is the trendy thing to do. That does not mean that it is not beneficial to businesses. Webmasters struggling to keep fresh, attractive content on their websites to lure visitors back, have found blogs the answer. Content is a necessity for online businesses, both for purposes of being found by search engines but also because it gives visitors a reason to come back.

Now that we have established that blogs are not only trendy but also beneficial to businesses, its important to understand how they can be used to your advantage.

This professional business blog allows us the opportunity to tell potential, or existing customers industry news, updates, or generally how mobile or paging software can be used in specific situations to alleviate problems. The bottom line is we control the content. Its updated daily, which increases the chances that search engines will spider on a regular basis and it helps with page rank because it's been submitted to all the blogging directories. Initially started on a whim we've found it beneficial to report tips, tricks or make visitors aware of new regulations related to the mobile or paging industry.

Of course you probably noticed that you are reading a blog right now!

This blog is less formal and contains marketing tips, or promotional advice for software developers or online marketers. We found that we had overflow from our monthly newsletter. Generating a daily blog would require very little effort and would assist us in creating fresh content which our readers told us was of significant interest.

Blogs & Your Business
The bottom line is you need to determine how a blog will benefit your business, determine a schedule and adhere to it. Let your readers know what to expect and when to expect it. Blogs provide great supplemental content and direct attention to areas of your business that you want to showcase; you direct the content but let your readers guide you.

Creating a Blog
There are numerous online tools that can be used to create a blog. We found that because of security concerns, it would just be best to use a standard html program. In our case we used Dreamweaver and create daily posts. Its really not much more complicated than typing an email. The content is then sent via FTP to a web server. If you want to test the waters there are online web-based tool that helps you publish to the web instantly. The most popular web based tool is likely Blogger http://www.blogger.com.

Other Advantages to Blogs
While you may initially create a blog for your existing customers, you may find that you can attract new customers by illustrating your expertise in a specific field. There are numerous websites that act as "blog search engines", be sure to submit your sites to these websites to increase your exposure. This will also help with your page rank and possibly increase the likelihood you will receive decent ranking with Google. You can also create an RSS feed in order to syndicate blog content and gain additional exposure.

I was recently interviewed by a print magazine about niche marketing. In it, I offered several tips and ideas on how to carve a niche in the marketplace. Here are a few of them:

1) Michel, what do you do? How do you do it?

If you know my personal story, you know how niche marketing played an important role in my career. (See another interview in which I discuss this, along with the strategies I used to propel my career, at http://SuccessDoctor.com/transcript.htm.)

Long story short, I feared rejection immensely, which led to a reclusive childhood. I wanted to overcome my fears and decided to dive into the world of sales in order to fight them. Years passed and many failures ensued until I finally became the top producing salesperson in Canada for a Fortune 500 company.

How did I accomplish that? Since I hated prospecting, I found and developed more effective marketing strategies that caused high quality prospects to come to me instead of the other way around. I no longer had to prospect. I no longer had to be rejected. In short, I went from prospecting to positioning.

In other words, I decided to specialize in a specific niche -- even though my employer did not require it of me. I positioned myself as an expert in a specific area (for a specific target market). Essentially, even though I could sell everything to everyone from this employer, I decided to specialize in only one product line for one particular category of prospect.

As a result, I attracted pre-qualified prospects to my door.

People today are bombarded with information, commercials and competition. Prospecting online is not only difficult but also impossible, nowadays. Thus, you have to market in such a way that causes those kinds of people to come to your business or website, and not the other way around -- like a magnet.

Therefore, rather than prospect for clients you must position your business as unique in a particular category or industry, or for a specific audience or market. And by being unique, you will naturally become the leader. With all the competition out there, it is no longer possible to be better than the others. The goal, therefore, is to be different -- and not better.

2) What is niche marketing? Why is it important?

Today's world has become overcommunicated and hypercompetitive -- one huge blur of sameness, in my estimation. If you attempt to be too general or too wide in your approach, you will only dissipate among the blur. And people will not see any greater value in buying from you than in buying from the competition.

One of the greatest errors committed by most new businesses is that they fall into a trap: they try to be "all things to all people." And they do so because they are mislead by the notion that, by offering more (or by serving more people), they will generate more sales. That's understandable for the survival of any new business depends on the number of sales it makes.

Based on the law of averages, you will have to advertise quite heavily so to be in front of as many eyeballs as possible, all with the hope of attracting an adequate amount of prospects that will in turn translate into a certain number of sales.

Undeniably, this requires a gigantic advertising budget.

For most new and especially smaller businesses, this is quite a challenge if not impossible. Admittedly, it is true that, the greater your reach is, the greater the potential quantity of responses will be. But what about quality?

Would it matter if your business or website generates a large quantity of uninterested visitors that will simply never buy from you? Let's look at the Internet. If your online business targets everyone, then your marketing message (and that includes your website) must therefore be painted with broad brushstrokes as to appeal to everyone. And the challenge with such an approach is the fact that you will lose a large percentage of visitors.

They may fall into your target market, but visitors that leave your website do so because they likely feel left out or become uninterested fast. Others simply choose competitors that might provide them with greater perceived value. In other words, the broader you are in your appeal, the less relevant you will be to any and every individual visiting your site.

If your site sells everything, chances are that your audience will not perceive any greater value in shopping from you any greater than from anyone else. In fact, the only common denominator, with which they have to work, is price. If there are no other points of comparison, naturally the cheapest alternative wins.

Sales will increase dramatically if your site is centered on a specific theme, product, industry, people or outcome. A niche, in other words. Put in a different way, the more focused you are, the less you will need to produce a sufficient quantity of website visitors to produce similar results. (For more, visit http://SuccessDoctor.com/articles/article42.htm )

3) How can someone find a good niche?

A good niche is one that: exists is easily identifiable is easily targetable. The most commonly asked question I receive from aspiring entrepreneurs is this: "What product should I sell?" (Or "what sells well on the Internet?") Quite frankly, everything sells (and can sell well) -- from pet food to travel packages -- in some way, especially online.

In fact, everything is being or can be sold, somehow, in some form or another. But that's not the problem. It's not what you sell -- it's to whom.

In other words, don't look first for a product to sell. Look for an easily targetable market with an easily identifiable need -- a need for a specific product, be it a good or service -- and provide them with that product. In order to achieve this, you need to be observant and listen to the needs of the marketplace. If people seem to be asking for a specific solution to a problem, obviously it is because a niche exists that has yet to be filled. Once you have found a niche, everything will flow from that point. In fact, if you follow this tactic you will constantly find products to sell.

Simply put, don't carve a niche. Rather, find one and fill it.

4) What are ways to become an expert in a particular niche?

If you offer a customary service or if your competition offers the same thing you do, catering to a niche helps to project an aura of uniqueness and superiority instantaneously by virtue of the fact that it doesn't appear as customary. Rather than copying your competition, you isolate yourself from them.

For instance, if you required brain surgery, would you choose a dentist? Would you choose a general, medical practitioner, even a general surgeon? Not really. You would probably choose a neurosurgeon. It's the same thing for other products. If you owned an imported car that needed new brakes, would you choose any general mechanic? Or would you choose one that not only specializes in brakes but also specializes in imported cars?

Expertise is in the eyes of the niche. Specialization is in itself a marketing process that, as a byproduct, generates the perception of expertise. It's amazingly effective in creating "top-of-mind" awareness among a specific target market.

For instance, an accountant specializing in car dealerships will acquire more clients than a general accountant will. An advertising salesperson specializing in home furnishing stores will sell more advertisements than a typical advertising agent will. A photographer specializing in weddings will get more bookings than a regular photographer will. Ad infinitum.

As more businesses get started, and the more inundated with marketing messages our society becomes, the less time, energy and money people will have to spend in choosing the companies with which they will do business. Thus, specialization helps to solve that problem by projecting an aura of expertise.

Take the mechanic, mentioned earlier. Rarely would you call a general mechanic an "expert mechanic," unless she has invested a considerable amount of resources in branding herself that way, or in educating herself deeply in the world of mechanics, backed by many, many years of experience. On the other hand, it would be easy to dub a mechanic -- even a new one -- that specializes in imported car brakes as an "expert mechanic."

Similarly, by finding and dominating a niche, you can become an expert by design -- not by default.

About the Author
Michel Fortin is a direct response copywriter and consultant dedicated to turning sales messages into powerful magnets. Get a free copy of his book, "The 10 Commandments of Power Positioning," when you subscribe to his free monthly ezine, "The Profit Pill." See http://SuccessDoctor.com/ now!

Everyday more and more websites, news services and blogs are adding RSS content. RSS is a method of syndicating content.The concept of aggregating content in one central location or repository is very appealing. Consumers have become tired of push technology, RSS allows users the flexibility to regain control of their content. RSS feed creators provide content without forcing it on consumers. In fact with RSS consumers are able to choose the content they wish to view.

How to Make an RSS Feed
RSS feeds contain what are referred to as "items". The items are usually connected in some way and contain a common theme or other similarity.

The following feed http://www.notepage.net/feed.xml contains eight items. The items are all SMS and paging related news articles that would likely benefit someone interested in the wireless market.

Each item contains:

* title
* description
* link

The title and description should be written to describe the content and the link should reference the webpage that contains that actual content.

Like html, the xml file uses open and close tags to designate the title, description and link. Tags are enclosed in brackets <>, like standard html and the close tag contains a forward slash /.

The following is what an item in a xml file looks like:

<title>The Title Goes Here</title>
<descritpion>The description goes here</descritpion>
<link>http://www.linkgoeshere.com

As I mentioned earlier, an RSS feeds contains items and like the tags above, an open and close tag is used to distinguish between items.

<item>
<title>The Title Goes Here</title>
<descritpion>The description goes here</descritpion>
<link>http://www.linkgoeshere.com
</item>

<item>
<title>Another Title Goes Here</title>
<descritpion>Another description goes here</descritpion>
<link>http://www.anotherlinkgoeshere.com
</item>

Now an RSS Feed is a series of items, these items are chained together to create what is called a "Channel".

The Channel appears at the top of the file and tells people how the items relate to each other. Like items channels use title, description and link tags to describe its content. The open channel tag <chanel> occurs before the first item and the close tag </chanel> occurs after the last item.

<channel>
<title>The Channel Title Goes Here</title>
<description>The explanation of how the items are related goes here</description>
<link>http://www.directoryoflinksgohere

<item>
<title>The Title Goes Here</title>
<descritpion>The description goes here</descritpion>
<link>http://www.linkgoeshere.com
</item>

<item>
<title>Another Title Goes Here</title>
<descritpion>Another description goes here</descritpion>
<link>http://www.anotherlinkgoeshere.com
</item>

</channel>

Finally you will need to designate the file by indicating it is an XML file by inserting xml and rss defining tags at the beginning and at the very end.


<rss version="2.0">
<channel>

<title>The Channel Title Goes Here</title>
<description>The explanation of how the items are related goes here</description>
<link>http://www.directoryoflinksgohere

<item>
<title>The Title Goes Here</title>
<descritpion>The description goes here</descritpion>
<link>http://www.linkgoeshere.com
</item>

<item>
<title>Another Title Goes Here</title>
<descritpion>Another description goes here</descritpion>
<link>http://www.anotherlinkgoeshere.com
</item>

</channel>
</rss>

When you save the file be sure to save it as an xml file.

Warning
If you create the file using Dreamweaver or a similar tool becareful that it does not strip out tags it feels are redundant. In order to be be an RSS feed your file needs at bare minimum that tags that were discussed above, and the file will not be valid if tags are stripped out.

I found a cool little free program that helped in xml file creation called First Object Editor http://www.firstobject.com/

Validation
As my math teacher use to say, check your work! Once your file is complete and uploaded einter it into the feed validator at http://feedvalidator.org

Syndication / Submission
If you've made it this far you are in good shape it is time to "syndicate" your content! Submit your RSS feed (the xml file you created) to sites just like you would submit a web page. Some of the more popular sites that accept RSS files can be found under "Post RSS Feed"
http://www.softwaremarketingresource.com/rss-feeds.html

When my Grandfather retired he used to spend some of his time panning for gold in the mountain streams of Utah. Being a retired machinist he eventually decided to "automate" his operation and built a sluice box. Now a sluice box is basically a long box with the two ends removed. Across the bottom of the box large number of small wooden "speed bumps" are nailed. One end of the box is elevated and placed under a source of running water, usually a small waterfall or stream. Sand from the streambed is put at the top of the box and is washed down over the wooden speed bumps nailed to the bottom of the box. The heavier gold gets caught in the speed bumps and is then recovered.

Not all sand in Utah contains recoverable gold. Sometimes my Grandfather could work for an entire day and get nothing but a back ache for his trouble. But other days, if he found a rich deposit, he could recover about quarter ounce of gold with a few hours work.

Selling shareware is a lot like mining gold. We have a program that acts like our sluice box; we throw a lot of potential customers, our sand, at our program; and eventually the gold settles out. Now most of us spend the first few years as a shareware author trying to build the perfect sluice box. We tweak our program in every way we can to try to get every possible sale out of our downloads. But eventually we realize that to get more gold (sales), we are going to need more sand (downloads).

Now there are a lot of different web sites that generate downloads for our programs. There are download sites, crack sites, search engines, and newsletters that are all driving downloads of our programs. While all of these sites may generate a significant number of downloads, our job is to find which sites generate a large number of sales.

To do this we need a way to figure out which of our downloads result in sales. We have good stats from our file hosting provider which tell us where are downloads are coming from and we have good records from our e-commerce provider about who bought our program but we don't have any way of tying those two together. From a shareware developers perspective the customer drops into a black hole once they download the program and then a few magically pop out the other side when the buy.

To tie the download back to the source of the sale we don't need to transfer a large amount of data. We could easily track over 600 different sources of sales with just a two letter tracking code (26^2). And a three letter tracking code would allow us to track over 17 thousand different sources (26^3)! We just need a place to tuck our tracking code after the user downloads so we can read it back when they return to buy.

There are a couple of different places we could tuck a 2-3 letter tracking code. Each one has its set of problems but the simplest solution was recommended to my by one of our developers. The tracking code is stored in the filename itself! We call this system, dynamic naming.

With dynamic naming the web server is slightly modified so that the filename can change without breaking the download link. For example this download link:

http://dl.filekicker.com/nc/file/128714-COXA/notepagerpro.exe

Can be changed to include the tracking code "cd" like this: http://dl.filekicker.com/nc/file/128714-COXA/notepagerpro-cd.exe

FileKicker has a feature that makes this possible with out having to upload a new file to the web server or changing any settings.

When the customer clicks on the download link in our example, the file is saved to the user's machine as notepagerpro-cd.exe. If notepagerpro were to implement this tracking system it would grab the tracking code from the file name during the install and store it in the registry. When the user clicked the "register" button from inside the program, the tracking code would be passed to the e-commerce provider and is included in the sales stats.

Now I am a just a web guy and really don't know the details of how this is done in code. Developers who have put this in place tell me that it is fairly simple because most installers "know" the name of the file from which they were launched. How it is done most likely varies with installers and programming languages but those who have put this in place tell me that it only takes a few hours to implement.

Each download site or marketing campaign is given their own download links with embedded tracking codes. Since the tracking code is in the filename the tracking even works when the file is hosted on the download site or is delivered on a magazine cover CD.

Of course not all users download directly from the websites that link to us. Some of our marketing campaigns like Google Adwords may not even include download links to our products. And to have a fully functional tracking system we need to track these too.

As a web guy this part has always seemed pretty trivial to me. Hosting our own servers it has always been easy to script this stuff into the back end. But I have found out that the web stuff is as mysterious to most shareware developers as desktop programming is to me. And many shareware developers don't have web hosting accounts that even allow server side scripting.

Luckily all the functionality needed can be done with client side JavaScript. And even better, somebody else has done the work! We have put together some JavaScript that makes the web site modifications a snap. To modify your web page all that is needed is to upload the tracking.js to the root directory of your web server and to load the JavaScript functions in your web pages with these lines:

Once the JavaScript functions on the webpage are loaded the JavaScript will look for a query string parameter called "id" and set a cookie to make it sticky. The links on your download page will need to be replaced with JavaScript calls that will add tracking codes to your files names. Since these scripts were created for FileKicker customers and the arguments to the function are the FileKicker fileID, filename, and the files extension. For example:

Download Now

On your e-commerce pages the e-commerce links need to be replaced with JavaScript that to add the tracking codes to your order pages. Passed in to the function is your current link to your e-commerce provider's order page and the name of the parameter that the e-commerce provider uses to pass tracking information. Most e-commerce providers have this sort of functionality although the query string parameter varies. For example this would be the correct call for Emetrix and NotePage Pro:

rewriteEcommerceLinkAsLink("http://secure.emetrix.com/order/product.asp?PID=1748830", "id")

And of course we should add tags with our download and e-commerce links in the unlikely event that the user has JavaScript disabled for some reason.

Once all the pieces are in place it is trivial to create a new tracking code for a download site or market campaign. A new 2 letter code is chosen and written down somewhere so it won't be forgotten and the links to the download and webpage are modified to include the new tracking code. For example if I were uploading to download.com I may chose "dc" as my tracking code and provide download these links to my site when I upload my files:

http://dl.filekicker.com/nc/file/128714-COXA/notepagerpro-dc.exe http://mail.qwerks.com/tracking/tracking.html?id=dc

Once those links are posted, I am tracking downloads to sales across their site. Pretty simple and easy to maintain! One caveat is that two tracking codes are already reserved. The first is "gs" which stands for "Google Search" and the other is "yh" which stands for Yahoo. Since it isn't possible to get search engines to modify their website links to include tracking codes the JavaScript looks for clicks from these sites and automatically sets a tracking ID.

I have put a demonstration page here that shows the scripts in action using the download and order links of NotePager Pro as an example.

http://mail.qwerks.com/tracking/tracking-links.html

Even though the system is relatively simple, developer who put it in place can normally track the 60-80% of their sales back to the source with in 3 to 6 months. It is an interesting exercise in itself to try to figure out where most of the sales are coming from and putting tracking codes in place. The results are usually surprising.

Once a good source of sales has been identified the problem then becomes how to increase sales from those sites. Usually there are paid advertising opportunities or you can work for better placement on the site. And if you find you can spend $1 to increase sales by $2 the challenge then becomes finding a place to spend a million dollars.

About the author:
Michael Halls manages the technical admin side of File Kicker, file hosting services for software developers.
Written by Michael Halls http://www.filekicker.com / http://www.emetrix.com

The EU VAT directive has caused significant controversy amongst developers and online software registration services. Part of the confusion has comes from the vagueness in the directive and questions with regards to the jurisdiction that the EU has over the US to enforce its policies. The implementation has skewed the playing field in favor of EU companies, while putting a significant burden on US businesses that do not benefit from the tax.

Because of the lack of clarity in the directive, developers are finding that many registration services are interpreting and reacting to the directive differently. In order to clearly illustrate the varied positions of the software registration services, I sent out a questionaire to 5 of the more popular online e-commerce services in the software industry.

The 5 registration services interviewed were (I color-coded the registration service responses so the answers would be easier to discern):

Digital River - including RegNow, RegSoft, and Digibuy (will also cover RegNet once they are fully integrated into DR's system) located in the US and HeadQuarters in England
SWREG - located in England
eSellerate - located in the US
ShareIt / Element5 - located in USA, UK, Germany, France, Italy, Sweden.
Emetrix - located in the US

The following are the questions I posed along with the varied responses I received.

1. Are you collecting VAT at this time?

Digital River - Yes, Digital River's ecommerce providers collect, remit, and report applicable VAT based on the EU's new directives that took effect on July 1, 2003. We are fully compliant with the new requirements, and have invested significant time and resources to ensure our clients are working with a provider that understands the nuances of the laws.
SWREG - Yes
eSellerate - Yes. We have been VAT compliant since inception.
ShareIt - Yes, we provide an optional full service for software authors to do complete handling and submission of VAT payments.
Emetrix - No, see comment below for expanded explanation.

2. How is the commission handled with VAT (e.g. how much commission does a developer pay on the VAT portion of the sale?)

Digital River - Each property charges only 4.8% of the VAT price, not the standard processing fee, to cover the additional credit card, fraud, and VAT administration costs associated with the new fees that are borne by the consumer. This fee is separate from the commerce fee applied to the order and is not on top of the commerce fee paid by our vendors.
SWREG - Typically 4%
eSellerate - There are none as eSellerate does not charge any commission or processing fees on the VAT amount.
ShareIt - It varies from pricing model and individual model. Typically, there is a variable percentage of 5% as part of the commission, which applies to the VAT portion as well.
Emetrix - see detailed quote below

3. Is there any way a developer can have a product marked as 'exempt' from VAT?

Digital River - Our properties sell software products on behalf of our clients. Because software is not exempt from EU VAT, there is no need for a developer to exempt a product within our systems.
SWREG - Yes if it is a zero rate or exempt product.
eSellerate - Not currently, but eSellerate is committed to remaining in VAT compliance and providing our customers with the tools necessary to do so. We focus primarily on selling digital goods, and these are all taxable according to the current VAT directives.
ShareIt - Yes, absolutely. The authors have that flexibility as the product itself might be exempt, or he is selling to businesses only.
Emetrix - see detailed quote below

4. How do you handle customers who are exempt from VAT (e.g. a VAT registered business)?

Digital River - Currently, when a customer is VAT exempt and enters their company name in our order forms, a page is displayed that allows them to enter a VAT exemption number to have the VAT removed from their online order. At this time, we are in full compliance with the means set forth to determine the exemption status of european companies.
SWREG - We charge VAT then issue refunds on receipt of proof of entitlement (to avoid fraud).
eSellerate - eSellerate prompts for and validates the VAT ID for the business or other applicable party and upon successful validation, VAT is not levied on the transaction. If any customer feels they were charged VAT incorrectly, all of the required information is provided to them to proceed accordingly.
ShareIt - For corporate and business purchases we perform a real-time check of VAT IDs in order to enable companies to purchase without VAT being charged at the point of sale. This is really important as business purchases are exempt from the new regulation.
Emetrix - see detailed quote below

5. How do you deal with physical shipments (e.g. do you add VAT to orders that are shipped on CD ROM?) If so, are customers ensured that they will not have to pay VAT before they can get the physical product?

Digital River - To the best of our knowledge, CD-ROMs are manufactured and shipped out of the United States into the EU. Our properties do not tax these shipments with respect to the Simplified Rules (which is the option our properties follow). The carrier will invoice the consumer for the VAT with any taxes assessed at the point of entry, who in turn will repay the carrier for the VAT amount plus a small administration fee.
SWREG - Yes. We recommend vendors print out the printable VAT invoice (we send them a URL with each order) and place it in a clear pouch on the outside of the package. Also saves the customer having to pay a collection fee to the post office (or even having to collect the package from the post office).
eSellerate - VAT is currently being charged on electronically provided goods only. No physical orders are processed with VAT per the EU directives.
ShareIt - The new regulation does not affect physical shipments of most standard software. For physical shipments, the regulation remains the same that VAT and possibly other duties are charged upon importation of the physical good into a country within the European Union, and is usually paid by the customer. Typically, there are export stickers or forms that need to be attached to the shipment, that has not changed since the new regulation. For authors using our physical shipping and warehousing facilities, this is something we do and have done for them automatically. If they ship themselves, we can either collect VAT for them and they handle the formalities, or the users pay import taxes upon delivery in their country, which is a common way of doing it.
Emetrix - see detailed quote below

6. Is it possible for the developer to 'eat' the VAT (e.g. instead of requiring the VAT to be added to the order total?)

Digital River - Yes, specifically on RegNow the author can determine the total price, inclusive of VAT, that they would like to charge to the end customer. In this case, the actual VAT amount is taken out of the total order price and the commissions are deducted also, with the rest sent off to the vendor.
SWREG - That is illegal. He can reduce his pricing to EU customers by 17.5% if he likes but VAT will be added to the reduced price. I tis not legal in UK to advertise a product "No VAT charged" and probably the same elsewhere. eSellerate - No.
eSellerate - No
ShareIt - Yes, absolutely.
Emetrix - see detailed quote below

7. Are you collecting VAT for all the various rates or do you collecting at 1 specific rate, if so what is that rate?

Digital River - Each of the properties falls under the Simplified Rules for VAT collection. This means the VAT rates charged to the consumer vary by country that the purchaser resides within. (see VAT chart below)
SWREG - During the interim phase until July 2006 we are charging a single rate of 17.5% (or zero % if a valid product). After July 2006 we will have to charge separate rates depending on the country if importation.
eSellerate - eSellerate collects at all applicable rates.
ShareIt - We collect at the local rates, which vary from country to country. These are either determined by the author (if within the E.U.) or the end-user (non-corporate), if author resides outside the E.U.
Emetrix - see detailed quote below

8. If the currency exchange rate increases who is responsible for the difference between the time of the sale and when the VAT is submitted?

Digital River - With RegNow, we collect and store conversion exchange rates on a daily basis. VAT collected will be based on these rates for USD transactions and exact amounts for GBP and EURO transactions removing the removing the risk of a fluctuating currency. Our vendors can choose to transact in a native currency or in USD. Either way, our system protects these clients from one currency moving in the wrong way when taxes are remitted to the government.
SWREG - Our problem.
eSellerate - eSellerate bears full responsibility and risk associated with any currency exchange and fluctuations. End users and our customers will never be accountable for this.
ShareIt - We assume that responsibility. As we collect payments in local currencies and deposit them in local currency accounts in real-time, we reduce the risk of fluctuation to a minimum. Authors have two option to set their prices in either local currencies, either pre-set the local currencies values (e.g. to strile a certain marketing price) or one fixed price in one currency in order to have no currency risk at all. Currency conversion is then doen on the fly when the user orders.
Emetrix - see detailed quote below

QUOTES FROM REGISTRATION SERVICES
Digital River - Digital River and its properties are committed to compliance with the EU Directives stating VAT must be charged according to the laws set forth by Council Directive 2002/38/EC - Amedning 77/388/EEC. We would not knowingly allow our clients to be party to a transaction that breaks these laws. As the company which faciliates the transactions, we bear this burden to collect, remit and report the VAT amounts due the appropriate EU member countries. Our objective is and remains to be compliant with the rules and regulations set forth by the EU, now and in the future. --- www.digitalriver.com

SWREG - "Keep to the law to avoid being prosecuted. I just went to a very high level government meeting and they are looking for targets of different sizes to prove they can prosecute serial offenders "pour encourager les autres". By selling in to an EU country, even when a remote sale, you must abide by the laws in those countries you are selling in to. It is not you paying the tax, it is the customer who is expecting to pay it. Many get it back anyway. We have been charging VAT now for over a month and the overall impression we get is that sales reamain constant. EU customers expect to be charged VAT so it is not a major issue to them as much as it may seem to you. Why not let your registration service worry about the administration while you worry about your coding?". --- www.swreg.com

eSellerate - There is some debate as to the best direction commerce and other internet providers should be taking regarding the recent VAT directives, the lack of authority of EU members over non-EU business, businesses obligations under these directives, etc. Our position is simple: we participate in a global economy and have customers located in every corner of the world and will behave accordingly by following the legitimate and lawful positions, directives and regulations that impact our business, and more importantly, the business of our customers. --- www.esellerate.net

ShareIt - It is important to be able to cater to local needs of customers, which includes proper tax collection and remittance. share-it! has been a global e-commerce provider for seven years with presences around the world, gaining a unique level of experience dealing with global e-commerce. That is reflected in the options and the service offerings that are available to our customers today. --- www.shareit.com

Emetrix - As a small business without a physical presence in the EU, we felt it would be prudent to carefully to evaluate the EU directive and its practical implications as we define our business policy. We have been studying this since the original release of information in early 2002 but by no means claim to be VAT experts. Having a customer base from all over the world, we must carefully evaluate how the choice to collect or not collect VAT impacts our customers' businesses, and make a responsible decision based on our customers' needs, applicable laws, and general industry practices. At the present time, we are not collecting VAT, but continue to talk to our accounting and legal advisors about the issue. We have also solicited feedback from many of our customers to determine their opinions. As we continue our research, we will be better able to make a decision that is not only wise for our business, but also in the best interests of our customers. Since we are not presently collecting VAT, it is not possible to comment about specific VAT implementations. However, should we decide in the future to begin collecting VAT, we will make details of our implementation readily available on our website. --- www.emetrix.com

WHAT YOUR E-COMMERCE PROVIDER IS NOT TELLING YOU
You may be liable for the collection of VAT not your ecommerce provider. The nature of your ecommerce agreement with your registration service may dictate who is legally liable should the EU wish to pursue VAT collection. The key to responsibility is whether or not, your registration service is a reseller (like Emetrix), taking brief possession in the course of the sale. If they are a reseller, VAT collection is the ecommerce service's responsibility.
Some registration services are simply agents processing transactions, which would meant that legally they would *not* be legally responsible for VAT. Share-It has an unusual arrangement, which I don't quite understand, according to Gerrit Schumann, Share-It! can be both agent or a reseller. The default agreement is based on the agent model (where the developer is liable), but reseller agreements are also available (where Share-It is liable).

SO WHAT ARE THE VAT RATES ANYWAY?
End-user Resides/Percent Charged:
Austria 20 0 %
Belgium 21.0 %
Denmark 25.0 %
F inland 22.0 %
France 19.6 %
Germany 16.0 %
Greece 18.0 %
Ireland 21.0
Italy 20.0
Luxembourg 15.0
Netherlands 19.0
Portugal 19.0
Spain 16.0
Sweden 25.0

Keep in mind if your business is located in an EU country you can charge the rate of the country you are selling *from* which is often lower than the rate where the end-user resides. As I understand it US companies do not have that luxury, they must abide by the simplified rules which means charging a different rate for each region based on where the end-user resides.

QUOTES FROM DEVELOPERS REGARDING VAT
"I have enough problems with U.S. taxes, but at least I have a vote on how they are implemented via my elected representatives. Under no circumstances will I act as Tax Collector for the European Welfare State, where no such representation exists, let alone any U.S. law mandating that I do so. I have my own merchant account so my way of handling VAT is simply to ignore it." --- Kent Briggs - Briggs Software www.briggsoft.com

"The EU's new VAT regulations are grossly unfair to US businesses, while favoring EU businesses. Businesses outside the EU must collect taxes for the EU, while businesses within the EU don't have to collect taxes for the US. In addition, small businesses within the EU are with sales below a threshold are exempt from VAT collection, while small business outside the EU are not! Finally, these VAT regulations place an undo burden on small US businesses. "

"Our accountant has estimated it will cost us nearly $1,000 (U.S.) to collect this VAT, account for it, and convert and wire the money (which would actually amount to less than $100.00) to the EU! The US Supreme Court has already ruled on just this type of commerce interference in the Quill vs North Dakota case. Their ruling explains why US businesses do not have to collect sales taxes on sales made to other states unless their company has a physical business presence in that state." --- Gary Elfring - Elfring Fonts www.elfring.com

"IMO, the EU has jumped the gun with the new Directive. It is an unenforceable piece of legislation that in many ways goes against the principles regarding taxation set out in the OECD's Ottawa Taxation Framework, particulary those parts of the framework that refer to "tax neutrality".

"There are also serious questions that need to be asked in the US about the nature of the authority that the EU effectively claims to have over US citizens and companies. In my view the Directive challenges a number of US Supreme Court judgements and indeed the authority of the US Constitution itself (particularly the 14th Amendment). This is a serious issue that goes beyond matters of taxation, it should not be ignored."
Allen Woods --- JIT Software www.jit-software.com

TEABAG CAMPAIGN - FOR US DEVELOPERS
This is a post from Gary Elfring http://www.elfring.com and reprinted with his permission. Tired of the EU VAT nonsense? Why not take a few seconds to email your 2 senators and your congressman about the issue. If every senator and congressman gets just 1 well reasoned email on this topic out of the blue, they will pay attention. Don't know who your senators or congressman are?

Just go to: http://www.house.gov/ or http://www.senate.gov/ you can send email directly from there after looking them up.

Here's a sample letter , which you can modify a bit and reuse:
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My firm makes software products that are sold worldwide, mainly on the internet. As you are probably aware, the European Union (EU) introduced new rules on July 1, 2003 that attempt to force US businesses to collect EU VAT on all sales to the EU. The US Supreme Court ruled on this type of commerce interference long ago in the Quill vs North Dakota case. Their ruling explains why US businesses do not have to collect sales taxes on sales made to other states unless their company has a physical business presence in that state. So if my business does not have to collect other states sales taxes, why do I have to collect the EU's VAT?

The EU's new VAT regulations are grossly unfair to US small businesses, while favoring EU businesses. Businesses outside the EU must collect taxes for the EU, while businesses within the EU do not have to collect taxes for the US. In addition, small businesses within the EU are with sales below a threshold are exempt from VAT collection, while small business outside the EU with similar sales are not! These VAT regulations place an undue burden on small US businesses. Our accountant has estimated it will cost us nearly $1,000 (U.S.) to collect this VAT, account for it, and convert and wire the money (which would actually amount to less than $100.00) to the EU!

Finally, the EU VAT is just the tip of the iceberg. If my firm has to collect taxes for the EU, then why not collect them for every country in the world? This accounting nightmare will just lead my firm, and many, many others to abandon all sales to other countries. How is it that the EU can force my business to collect their taxes? What is the U.S. going to do about this? Why don't EU business at least have to collect US state sales taxes? Any help would be appreciated.

VAT REGULATIONS:
http://www.hmce.gov.uk/bus/evr/comms-dir.htm

Use these 5 powerful buying stimulators in your ads, web pages and other sales messages to get more sales. They produce immediate results without increasing your costs.

1. Convert Benefits Into Feelings
People usually buy a product or service because they expect to feel a certain way after the purchase. Keep this in mind as you develop your ads, web pages and other sales tools.

Use vivid word pictures to dramatize the pleasant feeling your customer will experience when enjoying the benefit produced by your product or service. The following portion of a business opportunity ad I saw recently illustrates this concept:

"No boss. No schedule. No debt. Money to buy what you want and lots of time to have fun."

2. Dramatize The Feeling Of Loss
After telling your prospect what they will gain from buying your product or service, tell them what they will lose if they do not buy it. Most people fear loss more then they desire gain.

Strengthen your selling appeals by reminding prospects of what they will lose if they do not buy from you. For example, the above business opportunity ad becomes more powerful by adding the following:

"Or... continue building wealth for your boss while you struggle month after month just to pay your bills."

3. Reduce Product Choices
Promote only 1 product or service each time you advertise. Most people have difficulty selecting one product to buy when their decision forces them to delay or reject buying something else they also want. When prospects cannot make an easy choice they often make no decision at all -- and you lose the sale.

Tip: Combine several products or services into one package for one price. Eliminate the difficult decision of selecting and rejecting items by not including an option to buy any items separately. You will get more sales because your prospect's buying decision is limited to a simple "yes" or "no".

4. Increase The Buying Options
Offering choices of WHAT to buy reduces your sales. But offering choices of HOW to buy increases your sales. Offer many different ways for customers to buy from you. The same method is not convenient for everybody. Prospective customers are more likely to act immediately when their favorite way of ordering is available.

For example, many online marketers only accept orders online. They could easily increase the number of sales they get by including options to order by phone, fax and postal mail.

5. Simplify The Buying Procedure
You get more sales when you make it easier for customers to buy from you. Look for ways to make your buying procedure easier and faster.

For example, many online marketers use a shopping cart to process their orders -- even when they offer only 1 or 2 items. Don't force your customers to endure the complicated process of a shopping cart just to order 1 item. Some will abandon the process ...each one a sale you lost needlessly.

Use a simple online order form instead of a shopping cart when you offer only 1 or 2 items. It generates more sales.

Each of these buying stimulators will increase your sales. Start using them now in your ads, web pages and other sales messages. They will produce immediate results without increasing your costs.

About the Author:
Bob Leduc spent 20 years helping businesses like yours find new customers and increase sales. He just released a New Edition of his manual, How To Build Your Small Business Fast With Simple Postcards ...and launched *BizTips from Bob*, a newsletter to help small businesses grow and prosper. You'll find his low-cost marketing methods at: http://BobLeduc.com or call: 702-658-1707 After 10 AM Pacific Time/Las Vegas, NV