ask the experts
GREAT QUESTIONS, ANSWERED

Need Consumer Research
Q. I’m launching a new product line and would like to look at some consumer research beforehand. Given my limited budget, what are the best sources?

A. Start by going to your industry’s trade association, suggests David Frey, CEO of Marketing Best Practices Inc. (www.marketingbestpractices.com), a Houston-based marketing consulting company. Many industry-specific associations produce annual consumer research reports that they make available to member companies. Your suppliers also may prove to be good sources. “Call a few of your suppliers who provide direct goods, and ask them if they have any research,” Frey says. “Having consumer research allows you to tailor your marketing tactics to meet the needs and wants of your target customers.” For a directory of industry, trade and nonprofit associations worldwide, go to www.marketingsource.com.

Internet Sales Tax
Q. My husband and I sell ceramic and Mexican tile. Last year, we began selling over the Internet. We have added new customers in 16 states and Canada. We’re concerned, though, that a tax on Internet sales could prove to be a nightmare. With each sale, we’d have to determine the tax rate, send money to each state and keep up with all the forms and filing dates. Is it worth the hassle?

A. That depends on how much business your Web page generates now and in the future. With states and cities having lost revenue from sales taxes, an Internet tax seems inevitable—and sooner rather than later. The tax could be an enormous burden on small-business owners. Solutions in the works include a nationwide flat tax. Of course, getting all 50 states to agree on the rate is unlikely.

“While some state and local groups profess to believe they can create a simplified system of sales-tax administration that could be applied to the Internet, such claims seem dubious,” says Adam Thierer, director of telecommunications studies at the Cato Institute. Thierer thinks that any debate over Internet tax polices should be guided by several principles: no multiple or discriminatory taxation (the Internet should not be subject to unique or overlapping taxes) and no taxation without representation (companies should pay taxes only in those jurisdictions where they have a substantial physical presence).

Realize, however, that the outcome of the debate is far from certain. To prepare for your future in online sales, assess your online sales activity to determine how you would comply if you had to collect and remit sales taxes in every taxing jurisdiction (including localities) for sales made via the Internet.