This is a short follow up post to my article on Are Coupon Code Searches Costing Our Online Store Money?. I got a lot of good responses and just wanted to summarize some of the main points. Ultimately, I decided to make a small change to our store based on one particular reader’s input and I wanted to talk about the effect this change had after just 2 days of operation. Usually, two days of testing means absolutely nothing but in this case, it firmly cemented in my head what I needed to do.

From the comments, pretty much everyone agreed that as a customer, seeing a coupon code field and not actually having a coupon code carries a negative psychological effect on the whole shopping experience.

For one thing, most of you that responded stated that seeing an empty coupon field is an instant signal to go off and search online for a coupon code which usually means either putting off the purchase or leaving the ecommerce site altogether. The other camp of people never ever look for coupon codes, complete the purchase anyways but feel ripped off because they could have gotten a better deal with a coupon. Both of these cases are bad for business.

A Possible Solution

As discussed in my last article, I don’t really want to remove the coupon code field altogether because we do offer coupons to some of our biggest customers. Yet we don’t want the negative effects associated with offering coupons.

Mike King of Learn This offered up a possible solution which I liked.

I too don’t like the idea of online coupons actually. You’ve be way better off to simply offer a limited time sale price for an extra deal or bundle price for a sale instead of the coupons. I see what you mean for preferred customers, but then you should call it that so people don’t go searching for coupons. Change the field name to say, preferred customer code, and no one will go searching for a coupon.

Mike’s solution sounded like a good one so I gave it a try.

The Outcome

The outcome wasn’t exactly what I was expecting. Instead of people ignoring the field and checking out, we received several inquiries on how to become a preferred customer and how to get a preferred customer code. Some customers that we responded to either didn’t complete checkout and one customer even left a rather negative note after making a purchase. We were kind of shocked. Here’s the note below.

If you would like me to come back please put whatever promotional code for free shipping or 10% discount is out there for preferred customers. It is in the best interest of future business – obviously you have one. Thank you in advance

In any case, I have temporarily removed the coupon field altogether for now until I can come up with a better solution. I may just end up using cookies and a special link to implement my discounts.

Every couple of months, I take an in depth look at the search keywords that people use to arrive at our online store. In addition, I also use keyword tools to see whether people are doing searches for our business directly.

Photo By MissMessie

Much to my surprise, I found that some amount of searches were for the term “Bumblebee Linens coupons” or “hanky coupons bumblebee” etc… I guess it’s only natural that shoppers search for coupons.

But the truth is that we rarely give out coupons yet we prominently display a coupon code field during checkout. The fact that customers are looking for coupons makes me wonder whether they are prematurely exiting the checkout process in search for nonexistant discounts.

Why We Don’t Issue Coupons Very Often

There are different schools of thought when it comes to coupons. Some companies always have coupon codes outstanding as a way to entice customers to shop sooner rather than later. The problem is that if there are always coupons available, then customers generally won’t buy unless they have an active coupon code. The same theory holds true if your store runs regular sales promotions.

The other reason that we only issue coupons to our best customers is because we believe that issuing mass coupons kind of cheapens the feel of the store. Since we are in the wedding industry, we definitely don’t want people clipping coupons as a reason to come to our website. We want people to shop because we carry quality products and not because we offer the best bargains. In addition, our cheapest customers have also traditionally been the hardest to please.

How Do You React To A Coupon Code Field?

I don’t know about you, but whenever I see an empty coupon field while shopping online, I almost always take some time to do a quick coupon search. And unfortunately, it almost always results in me leaving the ecommerce site for a short period of time.

While searching for coupons, sometimes I find a better deal and never return. Sometimes, I find a coupon code only to discover that it doesn’t work. Sometimes, I waste so much time searching for the coupon that I get fed up and put off the purchase altogether.

The big kicker here is that the coupon code field actually entices a customer to leave your store during a crucial period in which you are trying to close a sale. Whenever a customer leaves your site for any reason, it’s very bad for business.

The Dilemma

Looking at our statistics, 7% of our customers do not successfully complete the checkout process starting from the page that contains the coupon code field. But to be honest, I’m not 100% positive how many customers actually leave our site to search for coupons during checkout. The only thing I really know is that there are people out there actively searching for coupons for our online wedding linens store and not finding them.

The other thing that is really annoying is that there are a whole bunch of coupon aggregator websites that pop up during a web search that carry bogus coupons. If you run an online store, try typing in followed by the word coupons and you’ll be shocked by how many bogus coupon code links pop up. It’s no wonder that people get fed up with the whole process.

For us, having the coupon field is useful in order to reward loyal customers but at the same time we don’t want customers leaving our site for any reason and certainly not during checkout. This presents us an interesting dilemma. How can we give out coupons and discounts without given out coupons?

Possible Solution

One of the solutions that my wife and I came up with was to give out a special ‘verbal’ code and have the customer call in to place their order. Of course, the downside to this solution is that we would have to take these orders over the phone. This is all fine and good but in general our desire is to reduce the overall number of customer calls. While this solution would be manageable in the near term, it’s definitely not a scalable solution.

A better solution would be to give out special URLs for the customer to click on to arrive at our site. Then based on a special tracking code, we would automatically issue the discount during checkout. While this solution is the best one we could come up with, it unfortunately requires me (or a real programmer) to do a bit of web coding to implement it.

Testing, Testing, Testing

In the near term, we are going to do some A/B testing with and without the coupon code field to see if it has any effect. Every store is different and if it turns out that having the coupon code capability doesn’t affect shopping cart abandonment, we may as well just keep it.

The key takeaway here is that the only real way to determine the right thing to do is to perform detailed tests. This particular issue can easily be determined with a few months of simple testing with two near identical web pages.

How Do You React To Coupon Codes?

When you see a place to enter coupons, do you immediately go off and do a coupon search? What is your opinion on what to do with the coupon code box for our online store?

Update: I’ve posted a short follow up to this article. Click on this link to read about my experiment

When I first saw the title of Adam’s new book, I thought to myself…”Why would I possibly want to unautomate my finances?” If I’m getting by with the status quo, why would I ever need to change things up?

The truth is that there are a lot of us who are just coasting through our financial lives and living from paycheck to paycheck. And because we still manage to get by, we tend to ignore all of the little things that negatively affect our financial livelihood in the long term.

In his book, Adam provides concrete steps and tutorials on how to “unautomate your finances”. In other words, he teaches us how to re-sensitize our financial lives, to start saving and to stop getting by with excessive debt.

Who Is Adam Baker and Why Should I Listen To Him?

For all of you who don’t know Adam, he runs the popular blog Man Vs Debt. If you have never ever visited his blog before, I highly recommend that you go over and check it out. He’s an excellent writer and his blog posts are both inspiring and fun to read. If you do check out his blog, I would definitely start with one of my favorite articles of his Tyler Durden’s Guide To Personal Finance.

Now Adam’s story is pretty unique. He and his wife just “got by” for many years. They managed to pay their bills on time and never saved much money at all. But as time went on, their expenses kept piling on and they soon found it increasingly hard to juggle all of their payments. In a short period, they managed to accumulate a mound full of debt ($80,000 to be exact and that didn’t even include the mortgage on his house!).

However instead of continuing down the path to debt hell, Adam decided to make a drastic change to his lifestyle. He found that by simplifying his life and by consciously focusing on his finances, he could take control of his financial life. In just one short year, he has managed to eliminate a good chunk of his debt and now also has a fairly sizable nest egg as well! His story is truly inspiring and he shares the exact steps that he took to take charge of his finances in his book.

What Do I Think?

All I can say is that this book is Adam Baker at his best. Even though I’m not in debt and have a pretty good fix on my finances, I read his book cover to cover in a single sitting because I like his writing style. Even though he and I differ in our philosophies on credit cards and how to track financial data, his advice is fundamentally sound.

The type of individual most likely to benefit from his book is someone in debt. Someone who is living paycheck to paycheck and not saving any money. For people who already have a firm grasp on their finances, the book is less useful from a practical perspective but there are a few cool extras that he is throwing in. Here are some things the book comes with.

• A 27 minute interview with Leo Babauta (ZenHabits) (Leo also wrote the foreword)
• An audio interview with J.D. Roth of Getrichslowly.org
• 2-page printable PDF budgeting template
• Minimalist excel template of same budget

Where To Buy

If all of this sounds interesting to you, Adam is selling his book for $17 here. This is not an affiliate link. In fact, MyWifeQuitHerJob.com has no affiliation with ManVsDebt or Adam Baker in any way. Hope you enjoyed the review.

Adwords, like any tool, is a double edged sword. If used improperly, it can flush your money down the drain. But used correctly, it can be a very powerful driver of sales to your online store. The main problem however, is that most new users fall into the money wasting category.

One of the biggest mistakes that newbie Adwords users make is to misuse broad matching keywords with their campaigns. To illustrate my point, I’d like to tell you about some of the boneheaded mistakes that I made early on with our Adwords campaigns.

As I mentioned in some of my previous articles on How To Use Adwords The Right Way With Your Online Store and The Realities Of Using Adwords Effectively, finding the right keywords to use is an iterative process that requires patience and the right tools. And the only way to refine your campaigns properly is by refining your analytics tracking as well.

Broad Match Can Waste You Money

The funny thing about search is that there are always people out there that perform searches that you would never expect. For example, we sell linen napkins in our online store so early on in our Adwords campaign, we decided to use the keywords “linen napkins” (even though I’m using quotes here, assume that I’m using broad match) with our Adwords campaigns. Back when I was more naive, I used to think that this was good enough. But let’s take a look at some of the searches that resulted in clicks to our site.

• Vintage Linen Napkins
• Green Color Linen Napkins Cheap
• Shamrock Linen Napkins
• Irregular Linen Napkins
• Essance Linen Dinner Napkins
• Used Linen Napkins Wholesale

Looking at the list above, we don’t sell any of these things so we are basically throwing our money away for these search clicks! The proper way to refine these campaigns would have been to do the following…

• Add negative keywords. ie. Don’t match on “vintage”, “green”,”Irregular”,”Essance”,”Used”
• Add additional keywords or use exact match. ie. Match only on “white linen napkins” which is the only color we sell.

Using Google Analytics The Right Way

Believe it or not, Google Analytics does not provide you with the exact search query information by default. Instead, it just shows you the number of people that clicked on your campaigns based on your campaign keywords only! Just to be clear, all of the above search queries would have been categorized under the keyword “Linen Napkins” by default which basically tells you squat.

The right way to use Google Analytics is to create your own filters to allow you to see the actual search query that was used to land on your webpage. But to do that, you need a tiny bit of technical know how which I will teach you.

Anatomy Of A Search Referral URL

Before we begin, it’s important to understand what a referral URL looks like coming from a search engine. Below is an example from a Google search.

http://www.google.com/search?hl=en&client=firefox-a&hs=8aw&rls=org.mozilla:en-US:official&q=getting+good+grades&start=40&sa=N


As you can see, there is a lot of information embedded in the URL and we want to be able to extract the search query information in our analytics reports so we can correlate our adwords campaigns to actual searches.

The field that is the most important in the example URL above is the &q=getting+good+grades. The &q field indicates the actual query that was used was “getting good grades” and is the information that we want to extract out.

Create A Google Analytics Filter

What is an Analytics filter? Filters are applied to the information coming into your account to manipulate the final data in order to provide accurate reports. In this case, we want to filter out the search query so we can correlate it with our Adwords campaign keywords. Please note that the way the following example is written will only work for Google searches. I did it this way to make the explanations simpler.

Here’s a step by step on how to do this

1. On your analytics home page, create a new profile and name it “Adwords Queries” or whatever you want
2. Click on the “edit” button next to your newly created profile
3. Scroll down and click on the “Add New Filter” button
4. Name your filter “Adwords Query” and fill out the rest of the information exactly as specified below.
   Filter Type:Advanced
   FieldA->ExtractA = Referral &q=([^&]*)
   FieldB->ExtractB = Campaign Medium (ppc|cpc)
   Output To->Constructor = Custom Field 1 $A1
   Hit “Save Changes”
5. Create another filter, name it “Campaign Term To Query” and fill out the rest of the information as specified below
   Filter Type:Advanced
   FieldA->ExtractA = Custom Field1 (.*)
   FieldB->ExtractB = Campaign Term (.*)
   Output To->Constructor = Campaign Term $B1 ($A1)
   Hit “Save Changes”
6. On the Profile Settings Screen, reorder the filters such that the “Adwords Queries” filter is applied before the “Campaign Term To Query” filter
7. You are done!

OK…What The Heck Did We Just Do?

Essentially, the first filter is used to extract out the interesting portions of the referral URL string. For example, let’s break down the following line.

FieldA->ExtractA = Referral &q=([^&]*)

It’s cryptic, but basically it’s parsing the string looking for an &q= symbol. Then it’s grabbing everything that comes after it until the next & symbol (ie. the search query) and shoving it into a variable called $A1. $A1 is used to denote that we want the 1st parenthesized value in field A.

FieldB of this filter merely limits the pattern match to CPC and PPC campaigns only and creates a new custom field.
FieldB->ExtractB = Campaign Medium (ppc|cpc)
Output To->Constructor = Custom Field 1 $A1

The second filter doesn’t do much. It merely correlates the search query with your google adwords keyword so that it shows up in your analytics report as shown below.

cloth napkins (blue+gingham+cloth+napkins)

Voila!

I apologize if this post was a bit technical but sometimes you have to tap into a tiny bit of code in order to get what you want. Once you have these reports going in analytics, you should have no problems refining your adwords campaigns! Be sure to use negative keywords in your campaigns as soon as you discover a false search.

Many personal finance and “get out of debt” blogs often advise their readers to avoid the use of credit cards at all costs. For some people, it’s all too tempting to buy more than you need and waste money on frivolous items when all you have to do is hand over a piece of plastic. By paying for everything in cash, you force yourself to correlate the cost of the items that you buy with actual dollar values which in theory helps curb your spending.

Photo By Andres Rueda

While these mind games work for the average individual, when it comes to running a small business, credit cards are an absolute must. My personal opinion is that if you lack the self control to watch your spending, then you have no business becoming an entrepreneur either. When running a small business, it’s important to watch what you spend closely and carefully to control your burn rate. But even more important, it’s crucial that you be able to completely separate and track all business transactions apart from your personal purchases. Keeping your business purchases on a separate credit card serves three main purposes.

• Come tax time, it’s extremely easy to extract out your business expenses on your Schedule C or other business tax forms.
• If you ever get audited, you have a much better case if you can show that you keep your business and personal expenses completely separate.
• It makes bookkeeping easier because your credit card company automatically tallies up and in most cases categorizes your expenses for you.

Using credit cards for as many purchases as possible allows you to streamline your bookkeeping. Plus, there are many rewards and money saving benefits to using credit cards for your business as well. Having done a fair amount of research on credit cards over the past decade, here’s a list of the best credit cards for small businesses that I could find in terms of cash rewards and savings with no annual fees.

Note: If you spend an abnormally high amount on business travel, then there are probably other cards that can save you more money on plane fare. For the purposes of this analysis, I focused on cards that provide you with cash back or savings off of your purchases rather than perks. Cash is king for any small business and you want to conserve as much of it as possible.

CostCo Business American Express Card

By far the best credit card that I’ve found is the Costco American Express card. This card is the perfect card for small business owners because it provides rewards for some of the most common expenses that entrepreneurs incur. Here’s a list of benefits for this card.

• 4% cash back off your first $6500 worth of gas at any Costco or domestic gas station
• 3% cash back off of eating out and dining at restaurants
• 2% cash back off all travel purchases which include plane tickets, lodging, cruises, tour operators etc…
• 1% cash back off of everything else
• 90-day coverage from date of purchase against theft and accidental damage up to $1,000 per occurrence
• Extends the terms of the original manufacturer’s warranty up to one additional year on eligible purchases with warranties of five years or less that are eligible in the U.S.

The main disadvantage is that you have to be a Costco member in order to apply for this card. But if you have a family like I do, chances are that you have a Costco membership already so it’s a no brainer. The other thing you need in order to apply for this card is proof that you have a business. This proof can come in the form of an LLC filing, proof of incorporation or a DBA. In addition, to establish your credit limit, you will need to submit your prior years business tax return. The Costco business American Express card is the card that my wife and I use for almost everything and there is no limit to the amount of rewards you can accumulate.

Chase Ink Plus Unlimited Rewards Card

Not every establishment takes American Express, so it’s important to also carry a Visa or Mastercard as well. My wife and I have found that the Chase Ink Plus card offers excellent cash back rewards. The main benefits are as follows

• 3% cashback on gas stations, restaurants, office supply stores, hardware and home improvement stores
• 1% cashback on everything else
• Unlimited cash back rewards
• Unlimited cards for employees and the ability to set individual spending limits per card

The benefits aren’t quite as good as the Costco Amex card but since it’s a Visa/Mastercard, you’re likely to be using it quite a bit at smaller establishments. Once again, you’ll need to provide proof of your business along with your application. In addition, you’ll have to send your business income tax return to establish your credit limit.

Honorable Mentions

The following credit cards received an honorable mention:

• Citibank Dividend Rewards Card – Offers 5% off of gas, groceries, drug stores, and utilities for 6 months. Then it becomes 2%. There’s a 1% cash back for everything else
• Chase Freedom Card – 3% cash back on gas, home improvement and department stores
• American Express Blue Card – 1% cash back off supermarkets, drug stores and gas for the first $6500. After $6500, it becomes 5% cash back. You get 1.25% off other purchases

What Credit Cards Do You Use?

If any of you use credit cards that provide greater rewards than the cards mentioned above, let me know. I excluded Discover cards from consideration because so few places accept it.

Ever since my wife and I bought our new home, we’ve been using a variety of contractors to help change a few things around the house. For example, we had new tile and carpets put in, changed the layout of the house a little bit and had the outside of the house painted as well. While everything we remodeled turned out okay, overall our experiences were a mixed bag and it had nothing to do with the quality of the work that was done.

Photo By Atomicshark

In fact, every one of my contractors did a fantastic job at whatever was assigned to them, yet I would probably not recommend at least 2 of the 3 contractors to friends or use them ever again. Why? It’s because it takes more than a good job to leave a lasting good impression on a customer. Sometimes even a small slip up can ruin the entire customer experience. In any case, I’d like to describe what these 2 contractors did and let you be the judge.

The Carpet Installer

Our initial experience with our carpet guys were extremely positive. From the get go, they were cordial, responsive and they offered very competitive pricing. When my wife and I finally decided to go with them, we setup an appointment and their crew arrived on schedule and finished exactly when they said they would.

As for the installation itself, I thought they did a good job. All of the carpet seams were barely visible and the carpet was perfectly flat and cushiony against our feet. So where did things go wrong?

The Doors
Things started to go south when I discovered that a few of our doors would no longer open and shut because the height of the carpet was scraping against the bottom of the door. The carpet company I used had quoted me a total amount that was supposed to cover carpet installation of the entire house, satisfaction guaranteed. However, when I asked them to take a bit off of the bottom of the door so my doors would work again, they hesitated.

Even though they had the tools in the back of their truck, they claimed that they had to charge me a good amount extra for the door trimming because they had to send an entirely different crew to do the job. It’s one thing if they were some large conglomerate company with set rules and regulations, but the carpet company we used was relatively small and something like this could have easily been approved by the owner. But, instead, they refused to do it and let me with non-functioning doors.

Transitional Pieces
The second thing that left a bad taste in my mouth was that these guys ran out of the transitional coverings used to bridge different floors together and wanted to charge me extra for it. Usually, when you are crossing over from carpet to tile or carpet to laminate flooring, there’s a thin strip of metal used to cover up the transition. The metal itself is dirt cheap and the installation is extremely easy.

They installed these coverings on 90% of the transitions but left out a few because they ran out of metal. When I asked them to come back later to install the missing pieces, they gave me this excuse that there’s a limit to the amount of metal they are willing to install. Even when I offered to go to Home Depot myself to pick some up (It costs like 7 bucks), they refused to install it.

Whoopee! They Saved 7 Bucks And Some Labor
If they offered to trim the door and install the metal transitions, I would have been ecstatic with their work. In fact, I probably would have gone out of my way to recommend these guys to others. But instead, 10 minutes of work with a hand saw and 7 dollars for extra metal cost them my referral business and made me never want to use them again. Was it worth it?

The Painters

I had a similar experience with my painters though it wasn’t nearly as bad. Like the carpet guys we used, our painters were extremely cordial, responsive and punctual. They quoted us a number to complete the entire job satisfaction guaranteed and they actually finished slightly ahead of schedule.

I was happy with the overall quality of the paint job as well. They used Kelly Moore paint and they did multiple coats to make sure the color was solid.

To understand where things went wrong, I have to first describe a little bit about my house. Our new house is a colonial style house with shutters adorning both sides of every window. As part of the paint job, we wanted to paint these shutters black in order to contrast with the color of the windows and the rest of the house.

For most of the day, I wasn’t paying attention to the painters at all. I was content just sitting inside assuming that they knew what they were doing. But when my wife and I stepped outside for a bit to go for a walk, I noticed that they were cutting a few corners with the paint job.

Instead of taking off the shutters, painting the house underneath and reinstalling the shutters, they decided to save time by painting around the shutters. Now aesthetically speaking, most people probably wouldn’t even have noticed as the shutters would have covered the unpainted portion of the house anyways. But it bothered me immensely. In fact, if you looked closely at the shutters, you could see remnants of the old color paint underneath.

Cutting Corners

When I told the painters that I wanted them to paint under the shutters, they hesitated and tried to talk me out of it claiming that no one would ever be able to see the difference. I eventually convinced them to do the work correctly but the damage had already been done. Their laziness had left a bad taste in my mouth. It also made me wonder whether that had cut any other corners in painting my house.

Why were these guys risking the reputation of their company to save only a little bit of time? Removing the shutters and painting underneath took an extra 30 minutes and a negligible amount of paint. If they didn’t try to cut corners, I would have been happy with their job. But now, they will not get my recommendation even though they did everything I asked.

Moral of the Story

Don’t pinch pennies and don’t cut corners with your business! Your business reputation is priceless. Even seemingly inconsequential things can ruin a customer relationship. I hope these two companies eventually learn their lesson. Referrals are the lifeline of any business!

The other day, I was having a conversation with a friend who works at a popular search engine company, and he was telling me about some of the idiotic ways people use their web browser. Did you know that the majority of people type in their search query straight into the URL box at the top of the browser? Did you also know that a good number of people don’t use search at all and instead just append a .com to whatever they are looking for?

Photo by Dana-2

It’s funny because as he was telling me these things, he was expecting me to look surprised and shocked but instead, I just stood there and smiled. After running our online store for the past several years, stories like this don’t faze me at all anymore. I’m well aware that there are a ton of people out there who don’t know how to use a computer very well and they all happen to shop at our store. This particular customer called to place her order over the phone because she was having problems pulling our website up.

Customer: Hello? Yes, I’d like to place an order over the phone please.

Me:Sure no problem. What can I get for you?

Customer:I’d like to order some personalized handkerchiefs please.

Me: Actually ma’am, would you mind placing your personalized order online? We’ve found that it is easy to make dictation mistakes over the phone and we want to make sure that your personalization is done correctly as you intended.

Customer:Actually, I’ve shopped at your store before and I would love to place an order online except your website is down.

**Pause**

Me:Really?(Frantically trying to access our page) Actually, everything seems to be up on my end. (I then went ahead and VPNed into work to see if my work machines could access the site. Nothing was wrong). Would you mind trying again?

Customer: Nope, it’s still down.


This got me a bit worried so I decided to take this opportunity to have her do a little bit of debugging for me.


Me:Ma’am, would you mind trying to access a different site for me just to make sure that your connection is working? I apologize. I just want to make sure that there is nothing technically wrong with our servers.

Customer: Sure I don’t mind at all. The last webpage I was looking at is still working. Seems connected.

Me:Can you hit F5 for me?

Customer:Webpage is still up.

Me: That’s really odd. I can access our page perfectly. In any case, let me take down your order.

Customer:You know what? All of a sudden, I can’t access any webpage anymore. What happened?!? Can you help me?

Me: Uhh….Is your computer still connected to the network cable?

Customer: I use wireless so there is no cable. Hmm, I wonder where Linksys went? It was there this morning.

Me:I’m sorry?

Customer: Linksys is what I connect to every single day. But it’s no longer here.

Me: Ma’am, you might want to go ahead and reboot your wireless access point. In any case, I’ve put your order through and you are all set.

Customer: My what?

Me: Your wireless access point. You know, the box that allows your computer to connect to the internet?

Customer: I don’t own one of those… Do I need one?

Me: Yes you do. But in the meantime, you can just connect your computer directly to your modem or however you get your internet service.

Customer: I’ve never done that before. I don’t think I have one of those.

Me: The modem is usually sent to you by your internet service provider. You pay a monthly fee which allows you to have internet access. Then, you need a wireless access point so you can connect wirelessly.

Customer: You must be mistaken because I’ve been using the internet free for the past year.

Me: I’m afraid not ma’am. (I didn’t have the heart to tell her that she’d been stealing access this entire time)

I’ll spare you the details of the rest of our conversation, but this poor lady was in shock. Not only did she come to the realization that she could no longer access the web, but she wasn’t willing to pay the money for access either.

I also discovered that when I told her to hit “F5″ to refresh her browser, she had typed in ‘F’ and then ‘5′. The only reason that she thought that her internet was still working was because she hit the ‘back’ button on her browser and was looking at a cached webpage.

If you want a few more laughs, I found this tech support video online the other day. It’s pretty funny if you have a free moment.

Many would be entrepreneurs don’t start their own venture because they are afraid of failure. And quite frankly, they have every right to be afraid. After all, we are constantly bombarded by vague sayings like “9 out of every 10 startups fail” or “chalk up your first startup as a learning experience”, or my favorite, “most relationships and marriages can’t survive a startup”. After you hear enough of these cliches, you soon start believing them.

Photo by Jeffrey Beall

The problem is that these ideals are further reinforced by the various entrepreneurship blogs out there that are telling everyone to fail early and fail hard because that is how you learn. Everywhere we turn, we are constantly reminded that statistically speaking, there is an extremely high probability that your first startup is going to die so it’s better to get that first failure out of the way.

Seriously folks…If I went into a startup believing that it was going to fail, then why the heck would I risk the money and heartache in the first place? Would I really want to spend all of my time on a business, potentially destroy my social life and personal relationships just so I can gain a new learning experience? No way! If I’m going to do something, then it’s going to have a high probability of success.

Failure Is Misinterpreted

The main problem is that the term “failure” is way overused and rarely defined. To me, the term failure in an entrepreneurial context is far different than that of failure in a more traditional sense.

For example, outside of entrepreneurship, failure simply means to give up or to be unsuccessful. Sally opened a flower shop, didn’t make enough money and decided to close up her shop. Game over. She failed.

Rick challenged Gary to a game of 1-on-1 basketball and lost. Rick failed to beat Gary.

In any case, you get the picture. Failure in a traditional context is just that…you are unsuccessful at something you have tried to do. But something magical happens when we talk about “failure” coupled with entrepreneurship. Failure becomes a good thing and you know why? It’s because failure has a different definition altogether in the world of entrepreneurship.

Failure Means To Experiment

Failure is just a way we entrepreneurs gather data. When my wife and I were trying to decide what to sell, we tried selling many different things on Ebay and Craigslist. I went through this phase where I was buying computers on Craigslist, stripping them down and selling each part piece by piece on Ebay. This little experiment netted me very little money for the effort I was expending so in fact it was a “failure”. It just wasn’t worth my time so I stopped doing it.

When my wife first wanted to sell embroidered goods, she tested out over 30 designs, but very few of them ever sold. So you could say that roughly 90% of her designs failed.

When my wife and I made our first inventory purchase for our online wedding linens store, 50% of the items we bought never sold and are still gathering dust on our shelves. Our first purchase was a failure because we bought too many items that were undesirable to our customer base.

Even though my first venture was a 100% failure, my wife’s designs failed at a 90% rate and 50% of our inventory was unsellable, these didn’t feel like real failures to me. It’s because as an entrepreneur, I considered every failed experiment a success because it brought me that much closer to finding out the right thing to do. By finding out what didn’t work, my wife and I could stop wasting time going down the wrong path.

Failure Means To Adapt

When an entrepreneur fails, it’s not the end of the business but merely a detour. When one path is blocked, entrepreneurs adapt and find new ways of doing things.

My wife and I hit so many roadblocks with our online store that I’ve since lost count. But looking back, probably our biggest failure was that we targeted the wrong set of customers and the wrong target market when we first launched. This was a big deal because we tailored our entire website towards these customers who didn’t want to buy from us.

Without going into to much detail, we initially targeted our linen products towards embroiderists looking for materials for crafting projects. Because we wanted to do as little manual work as possible, we tried selling our goods with no value added to the end consumer. In a nutshell, we simply repackaged the goods from our vendors and tried to sell them directly just like every other store.

Turns out that most embroiderists prefer to purchase their embroidery materials from one stop shops. Sure, we had the largest selection of handkerchiefs but we couldn’t compete because we didn’t sell anything else. In addition, the margins for embroidery supplies was not very high either.

In any case, when we found out that targeting embroiderists wasn’t working, we did a 180 and positioned ourselves in the wedding market which worked out much better for us.

Failure Means To Bounce Back

Nothing ever goes according to plan. You can’t predict the future nor can you anticipate all of the little things that will happen. The most important thing that defines failure is the ability to bounce back.

The marketing plan for our online store was a textbook example of failure. We kept trying every method to get traffic to our store, and when one method stopped working, we simply went onto the next. Looking back, there were many dark days when we both wondered whether we were wasting our time, but gradually, our business eventually picked up. While it is difficult to quantify exactly which marketing tactic was the most effective, I can say that collectively, all of our marketing efforts did make a difference.

Especially with web based businesses, websites need time to sink in and to be indexed by the search engines. Sometimes, all it takes is perseverance and faith.

Think Like An Entrepreneur

When failure is cast in a different light, it doesn’t seem so bad right? Instead of listening to the statistics or falling for the negative hype, go in with right attitude and you’ll eventually discover what works.

This year marks the first year that my wife and I are hiring an accountant to do our taxes for us and I’m pretty nervous about our decision. Even though I absolutely hate doing them, I’ve filed my own taxes for well over a decade now and I’ve done so because I prefer keeping my financial data private. I also like the feeling of control I get from being able to see how all of the numbers are calculated. That’s not to say that I don’t trust my accountant but while we’ve had an accountant for quite some time now, we’ve only used him as an advisor and never for any actual work.

Photo by Nick See

I’m especially nervous because by having someone else file our taxes for us, we are essentially turning over all of our sensitive financial data to a stranger and paying him to file a crucial document that could have a big effect on our finances. So yes, my wife and I are making this decision with a few reservations.

Since I’m a bit apprehensive about the whole thing, I thought I’d document some of my thought processes about our decision to use an accountant over Turbo Tax. I’m also going to conduct an experiment to see whether having an accountant really makes a difference in terms of tax savings. BTW, I’m sure some of my readers have their own accountants do their taxes for them with no issues. For those of you who do, please feel free to chime in at anytime.

Why Do We Need An Accountant?

With the birth of our second child, our business, this blog and the book that I’m working on, my wife and I have very little time to spare. Every free moment that we have, we would prefer to be hanging out and relaxing as a family rather than crunching numbers. It typically takes us a good solid weekend to put our taxes together so ideally, we’d rather not be devoting our brain power towards something we hate doing. Plus, we aren’t experts on taxation by any means.

Filing our taxes in the past has been relatively straightforward. We use Turbo Tax, and in theory Turbo Tax should calculate the numbers the same way that any accountant would. But deep down, I wonder whether a human accountant could find us more deductions than a computer program. For those of you with accountants, does your accountant find deductions that Turbo Tax can’t? I’m curious to find out.

What Does An Accountant Buy You Exactly?

Our accountant charges $200 an hour. This year, filing our taxes will cost us approximately $500 which includes our LLC. Compare that to the $75 that we usually spend on Turbo Tax and we’re blowing an extra $425. So what does this extra $425 buy us?

The accountant will prepare and file all of our taxes for us. All we have to do is provide him with all of the necessary data. Everything sounds pretty straightforward except for one thing. The accountant typically does not audit the data we provide and we are the ones responsible for any writeoffs we make with our business. While he will alert us of any red flags, by default he will not challenge or check up on our business deductions and will only do so if we ask. Needless to say, at $200/hr his time can really add up if we just hand him a bunch of receipts. That being said, it is nice to be able to ask an actual human questions regarding any borderline deductions that we might be taking which could trigger an audit.

I was also under the impression that our accountant was responsible for filing our taxes correctly. In other words, our accountant would be on the hook if we ever got audited. While this is true to a certain extent, it turns out that we are ultimately responsible for providing the correct numbers for the tax calculations.

In the event of an audit, the accountant is responsible for only the calculations and not the actual baseline data. For example, even if our accountant advises us to take a borderline tax deduction, we are still responsible for proving that the deduction is legit despite his advice. In addition, in the event of an audit, it costs extra money for the accountant to respond if he is not at fault.

The good thing about having an accountant is that in theory, he is supposed to file your taxes optimally based on your numbers and your current tax situation. He may be aware of obscure tax rules that could save you money and you don’t have to lift a finger. If you trust your accountant, everything should be taken care of correctly with no worrying on your part.

What About Turbo Tax?

Good ole Turbo Tax is super cheap. It costs us $75 only because we buy the home business deluxe version. The base version I believe is free for the federal filing. In theory, Turbo Tax should be aware of all of the latest deductions and ask you the right questions so you can take advantage of all of the tax breaks much like an actual accountant would.

While Turbo Tax is supposed to act like a virtual accountant, I personally find myself always erring on the side of extreme conservativism when it comes to taking deductions with Turbo Tax. Sometimes the descriptions are obscure and not well explained so I’d rather not take the risk. The thing I hate about Turbo Tax is that I’m always afraid that I’m leaving money on the table by not taking deductions that I’m entitled to because I don’t understand the deduction thoroughly.

That being said, one of the things that I like about Turbo Tax is that they offer this program called Audit Defense. For an extra $40, an accountant or an account representative will take care of dealing with the IRS for you in the event of an audit. One of my friends was audited last year and “Audit Defense” took care of everything. In the end, they discovered that he made a typo on his filing that was easily correctable and he didn’t have to pay anything extra. There was no hassle at all because Audit Defense took care of everything.

The other thing that I like about Turbo Tax is that you get to keep an electronic version of all of the worksheets that can easily be imported into Turbo Tax the following year. You can also try different scenarios to see what effects certain deductions and filing options have on your bottom line. In other words, you have complete visibility over your taxes and it’s dirt cheap. Ultimately, Turbo Tax is great for control freaks like myself who like to do everything themselves.

The Experiment

Since I’m a skeptic, I’m going to be conducting an experiment with our accountant. Even though we are going to pay him $500 to file our taxes, I’m going to go ahead and prepare my tax return with Turbo Tax and compare the two to see if there’s a difference.

If the accountant can save me more than $425, then it’s a no brainer to use him again. For my wife and I, it’s less about the money as it is about time savings so if he is on par or a little better than Turbo Tax, we’ll be satisfied. In any case, I’ll post the results of my accountant vs Turbo Tax results come tax time once I’ve completed the filing.

How many of you use an accountant vs filing taxes yourself? Has your accountant saved you money that you otherwise wouldn’t have been able to save?

It has been a while since I’ve done a competitive analysis of the various shipping carriers so I thought I’d do a quick update. With the United States Postal Service jacking up their rates every 4-6 months, what used to be the most economical shipping method is now priced inline or even more expensive than some of the more reliable carriers like UPS or FedEx.

Photo By Atibens

Because there are so many different shipping variables and options to choose from, it’s difficult to make an apples to apples comparison without locking down some of the basic parameters. For the purposes of this article, I am going to assume the following.

• A 14in X 12in X 3in package is being shipped cross country from California to a residence on the east coast. Incidentally, this is the same size as a USPS Medium Priority Mail Flat Rate Box.
• Out of the box pricing for all shipping carriers which means that lower negotiated rates based on volume are not taken into account.
• Labels are being printed online which means all associated USPS internet discounts apply.

At the end, I’ll also discuss the trade offs between price, shipping time and reliability and give my take on the best shipping strategy.

If You Are Shipping Something 2 Lbs Or Heavier With A 5 Day Delivery Window…

FedEx Ground or UPS Ground will almost always be cheaper than USPS Priority Mail. Between FedEx and UPS, FedEx will be cheaper than UPS out of the box because they provide you with an instant 15% off all shipments just for creating an online account.

The only exception to the above rule is that USPS offers 3 flat rate box shipping options, small, medium and large. If you can manage to shove merchandise that is heavier than 2lbs into a small flat rate box (unlikely), you can save about 4 dollars.

However more realistically, you will need a medium flat rate box to ship something weighing 2lbs or more. The break even point between FedEx or UPS Ground and a Priority Mail flat rate medium box is about 4 lbs. The break even point for a large Priority Mail flat rate box is about 7 lbs. So if your item is heavier than 4lbs, use a USPS flat rate medium box. If you need a large flat rate Priority Mail box, make sure it’s heavier than 7 lbs. Otherwise, FedEx or UPS Ground will always be cheaper.

If You Are Shipping Items Under 2 Pounds…

USPS will always be cheaper than FedEx or UPS hands down. However as the weight creeps closer to 2 pounds, USPS pretty much reaches pricing parity with UPS and FedEx Ground. USPS really shines when your package weighs less than 13 oz and can be mailed via First Class mail. If you don’t care about reliability, USPS is by far the cheapest shipping option for light items.

If You Need Next Day Service…

USPS Express is once again the cheapest solution by far and it is guaranteed. The only problem with USPS Express mail is that sometimes the delivery window is 2 days and you won’t know unless you check online. USPS also doesn’t offer a morning delivery time so if your client needs something at the beginning of the business day, they are out of luck.

I’ve also discovered that USPS Express Mail is less reliable than FedEx or UPS Next Day Service. While they “guarantee” their delivery times, what this really means is that they’ll refund your money if the package is delivered late. This has happened to me several times already and a shipping refund doesn’t make up for having an angry customer.

If You Need a 2-3 Day Delivery Window…

It is unclear which delivery service is better if you need 2-3 day delivery because USPS doesn’t guarantee their delivery times for Priority or First Class Mail. So while USPS Priority Mail cites a 2-3 day typical delivery time, it could be slower or faster depending on various unknown factors. In my experience, I’ve had some Priority Mail packages delivered within a single day and I’ve seen delivery times as long as 1.5 weeks. While the latter tends to be an anomaly, overall the delivery speed is somewhat random.

FedEx and UPS however, always guarantee their delivery times but are significantly more expensive. In some cases, FedEx and UPS will cost you will over 2X the cost of USPS.

My Take On The 3 Carriers

While USPS is the cheapest shipping carrier in most cases, their reliability is easily the worst among the 3 carriers. Our online store primarily uses USPS because most of our orders are under 2 pounds. But we routinely get packages delayed or lost in the mail. This past few months alone, we have had 3 customers email us wondering where the hell their order was. Given our volumes, 3 customers is probably statistically insignificant but having to deal with any unhappy customers is a pain in the neck.

While we don’t check on the status of all of our orders, I can tell you from experience that the quoted delivery times from USPS for both First Class and Priority Mail are completely hit or miss. If you are sending a package to some podunk, middle of no where town, it’s more likely to get delayed. Meanwhile, I’ve yet to ever have a FedEx or UPS package delayed or lost.

In the end, it comes down to reliability vs cost. For light items, USPS is the cheapest if that is your goal. For heavier items >2lbs in which delivery time is not a factor, FedEx or UPS Ground is the cheapest.

It’s the 2-3 day delivery window where you have to weigh the trade offs. Do you value reliability? Is actual transit time a concern? If you need a package to be delivered on time, use FedEx or UPS. If you are trying to save money, use USPS.

Our online store offers a mix of both. By default, we use USPS shipping to keep the shipping costs low (our items are typically under 2 lbs). However, if a customer has a tight deadline, we use FedEx. Speaking from experience, the savings of using USPS is not worth the hassle of pissing off a customer if there’s a deadline. But it’s tough decision to make because customers are typically turned off by high shipping costs. Of course, the other option is always to raise your prices and lose money on shipping. You have to make the call.