economic depression

UK Base Rate Tracker Mortgages Explained

UK Base rate tracker mortgages are the latest type of mortgage available and are proving to be a big hit amongst UK consumers. Tracker mortgages offer new choices to consumers and insulate borrowers from shock increases. So what is a UK base rate tracker mortgage? In very simple terms, it is a mortgage that tracks the Bank of England base rate at an agreed rate.

Definition
Base rate is defined as the lowest rate at which a UK bank will charge interest.

How It Works
Base rate is set by the Bank of England and is reviewed by the Monetary Policy Committee of the Bank of England every month.

The mortgage lender will charge an interest rate that is 1 or 2% higher than the base rate.

Let us say that the base rate is at 5% and your mortgage lender is charging you 1.5% above the base rate, you will be paying 6.5% interest on your mortgage.

The interest that you pay on your tracker mortgage is dependent on what the Bank of England’s Monetary Policy Committee decides, while the interest that you pay on your standard rate mortgage can go up or down, even if the base rate remains stable. In other words, UK base rate tracker mortgages are much more stable, and they also have lower interest rates in comparison to fixed rate mortgages.

Tracker Themes
A UK Lifetime tracker basically tracks the base rate for the whole life of the loan.

You can choose a tracker theme that runs for a set period at a pre-determined margin, which can be above or below the base rate, before moving to a lender’s standard variable rate.

The third type is a tracker where the difference between the base rate and the loan rate will be set at an agreed level.

There are few things you should consider when taking out a UK mortgage:
Moneylenders set a minimum and maximum amount of money that they will lend you. Some lenders can lend you 90% of your property value.

If you borrow more than a certain amount, the lender will charge you a fee that will be used to buy insurance.

Shop around for a mortgage to get the best rate.

How much you can borrow depends on how much you earn.

You might have to pay certain fees or interest penalty if you repay the loan before the term ends. This penalty decreases with time.

Whether you are going for a base rate tracker mortgage or any other types of mortgage, it always makes sense to shop around to get the best deal. Click here to compare UK tracker mortgage brokers

www.SavingsFriend.co.uk is a FREE independent and unbiased UK personal finance service helping you make informed decisions on loans, mortgages, credit cards, savings and more…

See our unbiased review of the best UK Base Rate Tracker Mortgages available today.

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Computer Backups

COMPUTERS AND HALLOWEEN, DO THEY MIX?

Computer backup is so important to your computer that to ignore it is to risk its damnation.

Computers require care and feeding. They require that you attend to their needs. If you don’t, then they will most surely be sent to Hell.

Halloween means Hell. What! What do you mean that Halloween means Hell?

Well, if your computer is given the option of trick or treat, which will it accept? Will it accept the trick or the treat? What do you think?

Halloween is the time that computers are subject to tricks or treats. Did you know that more computers fail on Halloween than any other day of the year? That’s right. It’s true (smile). Your computer is in danger! Protect it. Do your computer backups.

Back to the Hell thing. Hell you say? Yep. Well, what do you mean by Hell?

Computer hell is the place for computers without computer backup. The failure to perform hard drive backup means that you are playing Russian Roulette with your data. Data needs your protection. Failure to protect your data may cause your home or business records to be sent to Hell.

Hell in this instance is for the records and files that cannot be resurrected. Resurrected you say, what does that mean?

It means that without computer backup as a source of salvation then the files can safely enjoy eternal oblivion. Oblivion you say, what does that mean? That means they are eternally lost from computer resurrection.

Is there any mercy for my precious files, you ask?

Why yes there is. Would like to know what the mercy for your files is? Yes! Yes! You say.

OK boys and girls listen carefully. The salvation, mercy, resurrection and redemption of your files lies in regular and consistent and persistent computer backup.

If you backup your computer consistently and persistently your files will be resurrected and saved from accidental deletion, hard drive failure and those nasty things like fire, flood, theft, earthquake, hurricanes, tornados and the like!

Computer backup is the key to your data’s salvation!

Do your computer backups boys and girls.

Milk and cookies will be served in the pantry.

Trick or treat for your computer backup?

Jack Back has been in the computer business since 1983 as an IT executive and working computer consultant company owner. He has helped many clients after a computer crash who had no computer backup. Now get your FREE 2 part guide on how to quickly and easily do computer backups and to save your irreplaceable computer data from loss, damage or destruction at the Computer Backup website.

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What is Affiliate Marketing?

Affiliate marketing is basically a way of making money by selling other people’s products in return for a cut of the sales price In a nutshell, you advertise the product and then send prospects to the merchant’s sales page. You then sit back and wait for the money.

Affiliate products can be of any type, and commissions vary from as low as 5% to as high as 75% of the sales price. The most popular products are those with no recurring costs, such as electronically deliverable ebooks and software. In such cases the usual commission is 50% of the sales price. This is good deal considering the advantages to the affiliate marketer.

First, you do not need to have a product of your own. You don’t need to spent time researching and writing an ebook, or developing a new piece of software. Secondly you have a massive range of products to sell. Clickbank specializes in electronically deliverable products, and you can take your pick from all of those in their database.

You also don’t even have to sell the product. You simply send prospects to the merchant’s sales page, although you will have best results if you carry out a degree of pre-selling, such as writing a review. Nor do you have to worry about collecting money or dealing with complaints. All of that is handled by the merchant. So what is the downside of affiliate marketing, and why is everybody not doing it.

There are, in fact, very few negatives since you can’t really lose. In order to run a successful affiliate marketing business, you will likely need a website. Most people who make a lot of money this way have their own website. There are a number of reasons for this, but the main one is that you can more easily pre-sell the product from your own web page. You get much better sales figures if you write a review, or in some way tell the visitor how good the product is and how it helped you.

Most affiliate marketers purchase the product they are selling in order to sound genuine when they are writing about it. Another benefit of having a website is that you can use a different web page for each product you are selling, and also to advertise the product. Pay per click advertising is a good way to let people know about the product, and if you design the advert properly, with a good choice of keywords and provide a URL that sends the visitor directly to the relevant page on your website, you can get a fairly high conversion rate of visitors to sales.

This is because the visitor will be highly focused on your product, having clicked on your advert. Since you pay for every click made, you should test different wordings in your advert to find out the best. Google Adwords, the best known PPC program, allows you provide two or three different forms of your adverts, and they will display each in turn so that you can analyze the results.

There are several ways in which you can advertise, including ezine advertising, writing articles about the subject that the product covers and optimizing the page that your product is on so that you get some organic traffic from the search engines. Some affiliate programs provide you with a free website just for the product. While this could be useful to a newcomer to internet marketing, keep in mind that everybody using the program will probably have the same website, so you should check that you can customize it before entering into an agreement.

You should also make sure that you can easily contact your merchant. You have to be sure that the merchant is reputable, and is not going to pass complaints on to you. You are not responsible for problems that arise with the product. There are several online companies that offer affiliate products from merchants that are registered with them, and these tend to be the safest to use.

Examples are Clickbank and Commission Junction, both of which have a number of different products or merchants to offer. When you deal with such companies, your commission is paid by them rather than the merchant and you have some degree of security. However, you will find that it is very rare for a merchant to default on a payment, and everything normally runs smoothly.

Affiliate marketing is an excellent way to enter the exciting world of internet marketing, and allows you learn about the business without the need for your own product or a lot of start-up capital. You can theoretically start with nothing, but keep an eye on any PPC costs: these can build up quickly unless you keep on top of your advertising.

And as to why does everybody not do it: everybody does, at least most people involved in internet marketing have at some time or another. Some are more successful that others, and those that fail, are generally those without a website.

This article was brought to you by http://www.CapitalistLife.com, your best resource for earning, keeping and enjoying wealth. Visit us to learn more about Affiliate Marketing.

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Medical Receivables Factoring Provides Cash Flow

It wasn’t too many years ago when the hot trend in the physician world was the purchase of medical practices by hospitals. The theory was that not only would the hospitals benefit by an influx of referrals, the physicians would not have the headache of managing their practice and therefore earn more and work less.

Unfortunately, this rosy scenario has not always worked out and, as a result, many doctors are terminating their contracts with the hospitals. This has forced the physicians to re-establish their practices. For most doctors, maintaining their customer base isn’t a problem, as most patients will follow them back into private practice. The main issue is practice management in general, and financing in particular.

Although the physician may have no trouble getting financing for capital expenditures, a more ongoing problem is how to pay expenses and overhead incurred during the 60 to 90 days it takes to get paid from third party payors. As doctors and other providers are getting financially squeezed because of pressures reduce costs, the need for funding becomes greater. Even the most efficiently run practices need short term working capital as their businesses grow, and as a result of this need, healthcare financing companies have sprung up to provide medical receivables funding.

Even though the largest asset of most providers is their accounts receivable, most banks won’t lend money on that asset. Loan officers often lack the specialized knowledge of the healthcare claim billing and collection process. Because there can be a significant difference between the expected amount to be paid versus the face amount of the billings, banks are leery of using it as collateral. In a medical factoring situation, the funding company purchases the outstanding receivables of the practice, thereby assuming an ownership position in the receivables. Because the ownership of the receivable has changed, the practice also passes along the credit risk to the funding source.

ADVANTAGES OF RECEIVABLES FUNDING

* There is no monthly debt service because the funding is not a loan.

* It is an off-balance sheet transaction since the client is selling an asset.

* The client can receive fresh cash weekly, thus providing a manageable flow of funds.

* Because the only asset that is encumbered is the receivables, the healthcare firm can pursue other types of financing concurrent to this program.

* Factor fees tend to be much less than paying a billing company.

* No personal guarantees are required. The factoring company is more interested in the credit of the payor.

THE FUNDING PROCESS

1. The provider completes a client application and submits it to the funding source along with a due diligence fee. The due diligence fee helps the funding source defray costs of researching and analyzing the practice’s billing methods and procedures and to verify that the net collectible billing is accurately reflected on the firm’s books.

2. The funding source sends out a Letter of Intent, which specifies what can be done for the healthcare provider.

3. After receipt of the signed Letter of Intent, the funding source draws up a Purchase and Sales Contract for the client. This contract specifies the fees to be charged and the advance rate to the provider.

4. The funding source performs final due diligence, and provides reports to the client’s management as to the integrity of the billing and collection system.

5. The factor advances 70%-80% of the net collectible receivables to the client’s bank account.

6. When the invoice is paid to the factor, the remaining amount (invoice total less the advance less the factor fee) is wired to the customer’s account.

The factoring of medical receivables is a relatively new industry, but is also rapidly growing. It can provide much-needed working capital to providers for meeting expenses, making investments and taking advantage of early payment discounts.

Kent Harlan has been a CPA since 1984 and has provided consulting, accounting and financial services to several industries. He is the owner of Ozarks Capital Funding, LLC, a Springfield, MO based company offering financing in the areas of accounts receivable factoring, equipment leasing, asset based lending, and healthcare provider financing. website: http://www.ocflink.com

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How To Start Making Money Online with Affiliate Programs?

Affiliate marketing is a revenue sharing program where an affiliate gets paid to promote a merchant’s product and or service. It is a cost efficient way of attaining huge profits for both the merchant and the affiliate. However, affiliate marketing is no easy task to make money online but if you understanding how to effectively run an affiliate program than you will have a better chance to make serious money. To run a profitable affiliate program you must follow these simple steps:

First, pick an Affiliate program.

Picking an affiliate program is not as easy to do as most people think because there are a lot of programs out there. I would start at clickbank, it is one of the biggest affiliate websites to find products or services to promote. Focus on only one affiliate product or service when you start off and pick an affiliate program that you are interested in so you will be able to develop your own personal touch to your website.

Second, know your Affiliate program.

After choosing your product or service you must now research it so you can know the best way to promote your affiliate program. You must first set yourself apart from everyone else selling the same products by being creative with your marketing efforts. One of the best ways to sell your product or service is to purchase your merchant’s product so you have first hand experience using the product. Knowing your product will give you an advantage over everyone else using the same old advertising ads that the merchant gives out.

Third, promote your Affiliate program.

So after you pick your product and research it so you can rewrite your ad for the product to set yourself apart from everyone else than you are ready to promote it. There are a lot of ways to advertise your products like writing a review to submit to article websites. You can find ways to promote your product by searching on the Internet like Internet Marketing and or Affiliate Marketing. Knowing your product will give you an advantage over everyone else using the same old advertising ads that the merchant gives out.

In conclusion, if you want to be a successful affiliate marketer you must follow these three basic ways to start an effective affiliate program. Making money online threw Affiliate marketing is no easy task and you may make money or lose money but you can earn big bucks if you know how to market products effectively. To effectively run a profitable affiliate program you must first pick an affiliate program, than know your product, and finally promote your affiliate program. Knowing your product will give you an advantage over everyone else using the same old advertising ads that the merchant gives out.

Steven Smith
http://www.makingmoney4real.com

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Retirement Plans - Does Conventional Wisdom Work?

Both Wall Street and Corporate America are very fond of retirement plans like 401K and SIMPLE and SEP. Have you ever asked yourself why? Being somewhat cynical, I have: and the answer I came up with was disturbing at best.

For financial institutions, the retirement plan permits them to charge much higher fees then they ever could collect under the old fashioned defined benefit plans. For corporations, retirement plans allow the employer to shift investment risk and funding cost to employees. Presto, two problems solved: Revenue generation and risk transfer.

As a professional and small business person, preparing for your own future, does the conventional wisdom of retirement plans really work for you?

Before we answer that question, let’s first talk about the 5 great risks of retirement plans: Savings Risk, Investment Risk, Longevity Risk, Government Rule Change Risk and Tax Risk.

Savings Risk is the risk that you will not be able to save enough in your retirement plan to provide an adequate retirement.

Investment Risk is the risk that even if you do save enough, you will choose the wrong investments and lose all or part of what you have saved.

Longevity Risk is the risk that even if you save enough and wisely invest, you will outlive your retirement plan value and be destitute in your final years.

You are in a partnership with the government and you are the minority partner. The government can change how much you can contribute, the tax treatment (now and in the future) and just about anything else any time they want. This is Government Rule Change Risk. Example: at one time there was a penalty for accumulating too much money in retirement plans: 15% excise tax on amounts over $750,000. By the way, that penalty has been suspended (not eliminated).

Tax risk is the risk that when you go to use the money you have saved, you may be in a higher tax bracket. Taking into account the situation in regards to Medicare, Medicaid, Social Security, not to mention the war in Iraq there are a few questions to ask yourself. Will taxes go up, down or stay about the same in the next 20 years? Will my retirement assets be positioned to take advantage of the tax situation at that time?

This is the part of the article that most experts would begin to tell you how to overcome each of the above risks. The problem with applying conventional wisdom to such issue is that it doesn’t always work. This goes back to my point of why corporations and financial institutions want you to buy into retirement plans – they have their own agenda. That agenda doesn’t necessarily work for your benefit.

You can use techniques to offset the individual risks, but sometimes, that very effort creates other risks and problems. Let’s use longevity risk as our example. You can offset longevity risk by using what’s called an immediate annuity. An insurance company agrees to take your retirement account value and promises to pay you an income for the rest of your life – no matter how long you live. Sounds good because you’ve offset the risk, but there is a cost. First, you lose control of that money. Once it’s in the hands of the insurance company, you can’t change the payment structure – even in the case of an emergency like illness. If you die after receiving a couple years of payments – your heirs loose all the money. Of course, you can set up the annuity to pay you for your life and include payments for a certain period or guarantee payments to a spouse, but you get much less income in those scenarios. PLUS, you pay a big fee to the insurance company when you purchase this product.

As business owners and professionals we must think about retirement planning as more than just accumulating money in a retirement plan. While we accumulate, we should be thinking about how that money will distribute to us when we need it and how it will be conserved as we reach the end of our lives.

- If a retirement plan builds wealth while we are working, but that is eroded by risks before retirement – is it really wealth?

- If taxes eat a large chunk of our retirement plan just when we need to use it – can we really count it as wealth?

- If we can’t pass on the money in our plan without paying multiple levels of tax – are we really building wealth?

The take away wisdom: The only way to make progress towards your goal of a comfortable retirement is to focus on how all the pieces work together to efficiently build wealth, allow you to spend it and pass it on. The “Micro-Economic” management of risks and benefits, when it comes to planning for retirement, just won’t get you any further ahead. If you take away only one idea from this article let it be that the better the phases accumulation, distribution and conservation integrate and coordinate together towards your goals, the better off you will be now and in the future.

Action Plan: I recommend that professionals and business owners thoroughly review their choices when it comes to retirement planning. Everything you have in your financial model can (and should) be used for your retirement. A comfortable retirement is about more than just starting a retirement plan or buying a hot investment. Retirement planning starts with coordinating and integrating the phases of your life while using the efficiency of money to build the most wealth you can (while controlling risk).

Joan Gilles is a Financial Coach. She helps business owners and professionals get really clear about what it is they want financially. Then, she gives them a model and tools to get it. Because. you deserve to have everything you desire. What makes her different is she does her work without taking money out of a business or personal pocket. She can be reached at 651/578-2961 or jmgilles@pressenter.com

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5 Tips to Reduce Depression

While war and poor economic conditions begin to affect people all over the world, more and more people suffer with depression. The more we focus on news events and the business climate, the more we are depressed. Whatever the reason you feel is the cause of your depression, the following five simple tips guarantee you reduce it significantly.

1. Do not read newspapers.

Newspapers publish negative stories most of the time. Even in peaceful periods, newspapers will find the worst in humanity and place negative stories on display in order to promote sales and subscribers. Stories focused on War, rebellion, death, destruction, doom and despair abound in the newspapers.

You will not miss any news. Friends, family, and your local air raid siren will keep you informed if your attention is needed. Only pay attention to the things you can control in your life.

Stop reading the newspaper and reduce the negative input to your brain.

2. Turn off your television.

Watching and listening about the horrible economy and the losses associated with War will add to depression. In fact, you guarantee the feeling of helplessness. Helplessness allows depression to nurture. If you really need to watch or listen to these kinds of news stories, promise yourself you will bury yourself in the documentaries that are sure to follow in the next 5 or 10 years. A way you can eliminate most of the negative input to your brain is by setting it aside for a date somewhere in the future. I guarantee in the future, you will not find it very interesting.

When visitors come to your home, make sure you turn off your television and keep it off. News television broadcasters are fighting for your guests’ attention as they promote despair, war, death, and destruction with many headline news interruptions. Those little banners that run across the bottom of the screen achieve your attention and they take hold of your consciousness. Television will diminish your positive spirit.

3. Say good things about others

My Mother always says, “if you can’t say anything nice about others, don’t say anything at all.” However, when you find yourself in a conversation and a relative says, “Remember Uncle Phil?” ” He was an alcoholic” Respond with ” yes, Uncle Phil was an alcoholic and he was the most charitable person, I have ever met.”

Connect your friend’s negative statement about Phil with a positive one. Set yourself up to find the positive in anyone’s statement and you will keep negative thoughts and depression from overtaking your life.

Og Mandino, a great motivator once said, “treat everyone you meet as if they were going to be dead by midnight.” “Your life will never be the same again.”

4. Get physical exercise

Adults forget about exercise when suffering from depression. Make sure you are exercising daily and sending more oxygen to your brain cells. The result of exercise will improve your health as well as your attitude.

5. Breathe deep and relax.

Practice the following breathing exercise to relax your body and mind.

Breathe deeply and relax. For 2 or 3 minutes each hour, take a short mental vacation.

You can engage in this exercise while you are standing in the checkout line at the supermarket or when listening to others while talking on a telephone. You can complete the exercise at home or at work.

Take three deep breathes and relax. As you inhale, concentrate on calm and peaceful thoughts. You may think about relaxing by a mountain, by the ocean or comfortably in your favorite room at home.

As you exhale, concentrate on pushing any tension out of your lungs.

Focus on positive images in your life. Focus on laughter, love, excitement, and hope.

Keep breathing in and out in this pattern until you feel better. If you practice the exercise often, you will notice wonderful changes in your outlook and in other aspects of your life.

Reduce your depression now! Enjoy your family, your friends, and your life.

–Wayne F. Perkins

Wayne F. Perkins is the Stress Annihilator and author of “How to Achieve All of Your Goals All of the Time,” and other self-help audio CD programs. Wayne speaks to Sales Teams and Executive Teams to assist them in annihilating stress and achieving their objectives. http://www.stressannihilation.com “Annihilate Stress and Propagate Hope.”

Call Wayne Perkins and book for your next staff meeting: 602-647-4280

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The Role And Need Of Umbilical Cord Blood Banks

An umbilical cord blood bank renders as the storage facility to the donors, who are eager to preserve cord blood stem cells. Cord blood banking refers to an innovative program that stores and recruits umbilical cord blood cells to combat severe ailments in patients. Since studies have supplied significant information about the human body’s inability to recover from disorders like Non-Hodgkin’s disease, major spinal cord damages, immunity disorders, blood cell disorders, new parents are rushing to these banks to utilize their children’s umbilical cord cells. These cord cells can be harvested when an authentic and efficient bank is used to store them. Therefore, adequate facts and details about the functioning of the bank should be the focus of the donor’s attention before he selects a cord blood bank.

Private And Public Cord Blood Banks

The place where cord blood stem cells after collection are couriered have been founded for both general and private use. Private banks allow umbilical cord blood stem cells to be stored for transplanting requirements of donors and their families only. This means, a donor is entitled to the sole right to receive deposited samples for his own transplant needs and those of his family members. Stem cells donated to a public bank have lesser chances to be used by donors themselves, as the usage of stem cells is open to all and sundry.

Most of the private and public banks were founded during the 1990s. Public banks regulate stringent rules for the donors to use their storage facility. Furthermore, the donors are screened along with their blood samples to be eligible for umbilical cord blood banking. An expectant parent is required to contact a public bank 34 weeks prior to delivery. People interested in donating their samples in a cord blood bank can browse through the internet and locate the nearest private or public cord blood bank. In public banks, donors should be aware of the fact that post donation and testing, the samples are stripped of all donor identifying information, making the donor’s family incapable of retrieving the donated samples in case of their own transplant needs.

In comparison a private umbilical cord blood bank is a setup that caters solely to donor’s needs. Parents who opt to save cord blood cell samples in a private bank are supposed to pay an approximate fee of $1,500 to $2,000 to preserve their rights of usage, in addition to an annual maintenance fee of around $100. Other charges by an umbilical cord blood bank include fees for cord blood collection kit, courier services for the blood cord samples to be transferred to the bank and initial processing measures. Some banks allow even a saving of around $500 paying an upfront amount during banking. If the high costs deter you, it must be noted that the parents or the guardians can choose to donate or sell their stored stem cells to a needy family a few years down the line, if they are sure of their child’s and other siblings’ health.

There is also another option given by non-profit cord blood banks, of free programs through which one can store umbilical cord blood stem cell samples. However, taking notes on the efficiency of cell processing and frequency of usage in transplants by an umbilical cord blood bank is highly important before you give your precious life saving stem cell samples to them.

Private cord blood banks store umbilical cord blood stem cells for a fee. These stem cells can be used for the transplanting requirements of donors and their families only. However, public cord blood banks offering cord blood banking services use the donated stem cells for use of the general public. To know more about the need and benefits of umbilical cord blood bank and benefits of cord blood stem cells in treatment of various diseases visit Cord blood banking.

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Porter’s Five Forces Analysis

If you’ve ever listened to Warren Buffett talk about investing, you’ve heard him mention the idea of a company’s moat. The moat is a simple way of describing a company’s competitive advantages. Company’s with a strong competitive advantage have large moats, and therefore higher profit margins. And investors should always be concerned with profit margins.

This article looks at a methodology called the Porter’s Five Forces Analysis. In his book Competitive Strategy, Harvard professor Michael Porter describes five forces affecting the profitability of companies. These are the five forces he noted:

1. Intensity of rivalry amongst existing competitors

2. Threat of entry by new competitors

3. Pressure from substitute products

4. Bargaining power of buyers (customers)

5. Bargaining power of suppliers

These five forces, taken together, give us insight into a company’s competitive position, and its profitability.

Rivals

Rivals are competitors within an industry. Rivalry in the industry can be weak, with few competitors that don’t compete very aggressively. Or it can be intense, with many competitors fighting in a cut-throat environment.

Factors affecting the intensity of rivalry are:

• Number of firms – more firms will lead to increased competition.

• Fixed costs – with high fixed costs as a percentage of total cost, companies must sell more products to cover those costs, increasing market competition.

• Product differentiation – Products that are relatively the same will compete based on price. Brand identification can reduce rivalry.

New Entrants

One of the defining characteristics of competitive advantage is the industry’s barrier to entry. Industries with high barriers to entry are usually too expensive for new firms to enter. Industries with low barriers to entry, are relatively cheap for new firms to enter.

The threat of new entrants rises as the barrier to entry is reduced in a marketplace. As more firms enter a market, you will see rivalry increase, and profitability will fall (theoretically) to the point where there is no incentive for new firms to enter the industry.

Here are some common barriers to entry:

• Patents – patented technology can be a huge barrier preventing other firms from joining the market.

• High cost of entry – the more it will cost to get started in an industry, the higher the barrier to entry.

• Brand loyalty – when brand loyalty is strong within an industry, it can be difficult and expensive to enter the market with a new product.

Substitute Products

This is probably the most overlooked, and therefore most damaging, element of strategic decision making. It’s imperative that business owners (us) not only look at what the company’s direct competitors are doing, but what other types of products people could buy instead.

When switching costs (the costs a customer incurs to switch to a new product) are low the threat of substitutes is high. As is the case when dealing with new entrants, companies may aggressively price their products to keep people from switching. When the threat of substitutes is high, profit margins will tend to be low.

Buyer Power

There are two types of buyer power. The first is related to the customer’s price sensitivity. If each brand of a product is similar to all the others, then the buyer will base the purchase decision mainly on price. This will increase the competitive rivalry, resulting in lower prices, and lower profitability.

The other type of buyer power relates to negotiating power. Larger buyers tend to have more leverage with the firm, and can negotiate lower prices. When there are many small buyers of a product, all other things remaining equal, the company supplying the product will have higher prices and higher margins. Conversely, if a company sells to a few large buyers, those buyers will have significant leverage to negotiate better pricing.

Some factors affecting buyer power are:

• Size of buyer – larger buyers will have more power over suppliers.

• Number of buyers – when there are a small number of buyers, they will tend to have more power over suppliers. The Department of Defense is an example of a single buyer with a lot of power over suppliers.

• Purchase quantity – When a customer purchases a large quantity of a suppliers output, it will exercise more power over the supplier.

Supplier Power

Buyer power looks at the relative power a company’s customers has over it. When multiple suppliers are producing a commoditized product, the company will make its purchase decision based mainly on price, which tends to lower costs. On the other hand, if a single supplier is producing something the company has to have, the company will have little leverage to negotiate a better price.

Size plays a factor here as well. If the company is much larger than its suppliers, and purchases in large quantities, then the supplier will have very little power to negotiate. Using Wal-Mart as an example, we find that suppliers have no power because Wal-Mart purchases in such large quantities.

A few factors that determine supplier power include:

• Supplier concentration – The fewer the number of suppliers for a given product, the more power they will have over the company.

• Switching costs – suppliers become more powerful as the cost to change to another supplier increases.

• Uniqueness of product – suppliers that produce products specifically for a company will have more power than commodity suppliers.

It’s important to analyze these five forces and their affect on companies we want to invest in. The Porter Five Forces Analysis will give you a good explanation for the profitability of an industry, and the firms within it. If you want to know why a company is able, or unable, to make a decent profit, this is the first analysis you should do.

About The Author

Chris Mallon is the editor and publisher of the Undervalued Weekly, a free personal finance and investment newsletter, published once a week. To sign up for the Undervalued Weekly, send e-mail to underval@hot-response.com, or sign-up through the website at www.dynamicinvestors.net/index7.html; chrismallon@dynamicinvestors.net

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What’s The Best Product To Sell Online?

I wish I had a dime for every time I’ve been asked, “Tim, what’s the best product to sell online?” I also wish I had a nickel for every blank stare I received when I answered: “That’s simple: information.” I’d have enough money to finance another startup or two.

As more and more entrepreneurs move to the Internet seeking their fortunes, “What’s the best product to sell online,” has become the number one business question of the decade.

The next question is always: “Why information?” Again, the answer is simple: because no other type of product is easier to create, faster to bring to market, easier to distribute, and potentially more profitable.

Many info products net as much as 75% to 95% profit on the initial sale after all costs have been deducted. And residual sales to established customers can offer 100% profit.

Informational products come in many forms. An info product can be a digital book (e-book” is the accepted term), a digital report or white paper, a piece of software, a website, a newsletter, etc. Any product that is informational or informative in nature can be considered an info product.

Here’s why information is the best product to sell online:

Fast to create, fast to market

Forget a product development cycle that is years in the making. Forget an intense design and costly manufacturing process. I have literally created info products in as little as two hours and had them generating revenue shortly thereafter. If you have an appealing topic and a computer, you have all the tools you need to create an info product.

No inventory to stock

Forget filling your garage with boxes of cheap watches and cases of mega vitamins that you will never sell. When you sell information there is no inventory to stock. Your product is digital (I like to call it electronic air) and requires no space in your garage, just a little space on your computer. One of my most successful info products is a 30kb e-book that requires almost no space at all.

Low startup costs

When you sell information you can literally create a product for next to nothing. If your product is an e-book the only investment required will be in the time it takes to put words to digital paper. If you become an affiliate marketer of someone else’s info product your investment can be zero.

You can automate the sales and delivery process.

Thanks to internet technology you can sell info products 24 hours a day, 7 days a week, and never lift a finger. In fact, you don’t even have to be awake or at home to make money with an info product. I know many successful info entrepreneurs who are getting rich despite the fact that they work as little as an hour a day.

They check the website and their email, then go play golf or hang with the kids for the rest of the day. You can completely automate the sales and delivery process so your website does everything for you.

An automated website can give a potential customer your sales pitch, take the order and process the payment, deliver the product by email, and even follow up in a few days to make sure the customer is satisfied and offer to sell them additional products.

You can offer immediate access or delivery

Online consumers are an inpatient lot. They want things NOW! These are people who stand in front of the microwave impatiently tapping their foot and frowning at their watch. Selling information is the best way to give your customers immediate satisfaction. As mentioned earlier, an automated website can process the order and payment, then immediately email the download link for the product to your customer.

There’s no shipping and handling

One of the things I never liked about selling hard goods was the manual process of taking the order, running the credit card, placing the order with a dropshipper or filling the order of my stock. I hated finding a box and packing peanuts and printing the label and taping it all up and lugging it to the post office. Every minute I spent filling orders was time that I was not being compensated for, therefore, my profit grew less and less with every minute spent on shipping and handling. Informational products require no shipping and handling. Most are delivered by email. In the time it takes you to click your mouse, you can deliver an info product.

What if you don’t have your own info product to sell?

This is one of the most appealing aspects of selling information. If you don’t have an info product, creating or finding one is much easier than you think.

We’ll discuss that process in detail in the next article.

Tim Knox
Entrepreneur, Author, Speaker, Radio Host
Check Out Tim’s New Radio Show! =>http://www.timknoxshow.com
Preorder Tim’s New Book =>Everything I Know About Business I Learned From My Mama http://www.timknox.com/amazon/

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