|Moving my online retail operation|
| 6:33 pm on Oct 17, 2008 (gmt 0)|
I just moved my online retail operation to the town where my parents live in far northern California, about 1.5 hours south of the Oregon border. It's great being able to be around them, but the area is notorious for very slow moving people. When I was in Santa Barbara, California, USPS Priority Mail almost always reached my customers within 1-2 days. It was awesome. Up here, it takes 3-5. Kind of a drag. I'm thinking I'll move the operation somewhere more suited for it as soon as I outgrow the warehouse I'm in, probably within 1-3 years. I do still want to live where I am now to be around my folks, so I'd like the business's new location to be a direct flight away. Los Angeles, Portland, Reno, and Salt Lake City all fit the bill in that way. Salt Lake City sounds especially enticing because it's the furthest east and most of my suppliers are in Ohio or on the east coast, plus it seems like a major hub. How is Utah for business laws and taxes?
I'm open to any and all suggestions.
| 6:55 pm on Oct 17, 2008 (gmt 0)|
Your considering moving the operation and commuting to save on shipping time?
Insane idea. The rabbit sprints gets there a day sooner and dies of a coronary and ends up loosing several months. The hare comes in second, is happy, and gains several years.
| 7:38 pm on Oct 17, 2008 (gmt 0)|
Tonearm, I think you have the right idea. Locating to an area where you can have quicker shipping to your customers at the same or lower price means happier customers and more repeat business. One of the big obstacles e-commerce has to over come is the lack of "instant gratification" that comes from ordering from a brick & mortar store.
For example, in addition to displaying real-time stock levels, we also tell customers what day they can expect the product to arrive if they order today.
I believe the "logistical" center of the United States is Missouri or Kentucky - you can ship ground from there and the package will reach either coast in 3 days or less.
| 8:03 pm on Oct 17, 2008 (gmt 0)|
From KY it's 4 days to the west coast and 3 or less to everywhere else. We have a FedEx Ground hub in Northern KY and UPS Air in Louisville. Both Amazon and Zappos have distributions centers in KY.
| 2:32 pm on Oct 18, 2008 (gmt 0)|
|but the area is notorious for very slow moving people. |
Ahh country livin' is the life for me . . . :-) It's most likely not because of the slow moving natives, it is probably more likely the way the parcels are routed out of your area.
We're 45 miles north of the border. In our town we have the "central" larger post office right in town. We live closer to another of the smaller towns that has a post office no larger than a coffee shop and two employees. Both PO's route their parcels to the same LARGER town PO about 20 miles south.
We get faster shipment, better service, and don't stand in lines nearly as long from the smaller post office. First name basis. Priority hits the east coast in 3-4 days. We absolutely positively never rely on pickup service.
Overall I agree with you - rural areas move to a different pace, but it's why we live here. It takes some getting used to, but there's no reason not to get the fastest means of shipping possible. You just need to get to know the way it works; maybe there's a different PO or node you can seek out in your area.
We should get together and compare notes sometime!
| 6:28 pm on Oct 18, 2008 (gmt 0)|
No direct flights to SB? I was just there, love that place!
| 11:37 am on Oct 19, 2008 (gmt 0)|
Consider the rust belt. It's cheap and we're close to a lot of major American cities. I live in a small "city" in upstate NY and my priority mail gets to CA in two days. It goes from my city to Rochester, two hours away, where it gets on the plane. It takes longer to get down south than it does across the country. It can often be next day to a contiguous state.
Downside is there are a lot of taxes. Upside of that is that there are a lot of social services.
| 7:51 pm on Oct 20, 2008 (gmt 0)|
Thanks a lot for everyone's reply. I'm hoping to set up my operation in a logistically optimal area and not have to go there very often. I like my country home and wouldn't move somewhere for business. In fact, I think that's like 50% of the reason I got into this business. It would be nice to have my operation a direct flight away though, for when I do need to go there. I suppose it's not essential though.
How infrequently do you think I could get away with visiting the operation? It's straightforward online retail. I can imagine pretty much never showing up if I can hire a good manager, but has anyone tried that?
How do CA, NV, UT, KY, and MI compare as far as business laws and taxes?
| 8:38 pm on Oct 20, 2008 (gmt 0)|
If you want a nice quality of life for ecommerce come on up to Vermont. We pay higher than average taxes but the perks more than make up for it - you just missed peak foliage. Ski season is coming quick though. :)
| 8:41 pm on Oct 20, 2008 (gmt 0)|
I can comment on KY taxes and laws.
KY taxes undepreciated assests such as equipment. However inventory classified as "in-transit" is excluded from this tax. This is extremely important if you carry a large amount of inventory at the end of the year.
S Corps in KY were taxed as pass-through entities (i.e. owners pay taxes on all profit at the personal level. This is the same as federal.) KY changed this two years ago and started collecting payments from businesses. Then they changed it again last year to only collect a small amount from businesses. We are now mostly pass through again. If you live in KY it doesn't matter, you pay tax either way. If you live outside the state then you probably pay in your home state and this would be important to you.
Generally KY likes distribution centers and has provided incentives / tax breaks in the past to attract them.