Cliptomania, Research Paper Example

It is to our understanding that based on the findings of this case study, most people who have an interest in accessorizing, particularly pertaining to the fashionable element of earrings choose to get their ears pierced. Because of this factor, the fashion market has sought opportunities to drive their sales revenue in this sector of the industry. This marketing ploy in the fashion of earring accessories is a trending success to this very day. Both the consumers and the suppliers are satisfied because earrings are almost always in demand for those who have a taste for fashion. This opens up jobs for designers to continuously design new kinds of earrings. Unfortunately, not everybody who may have an interest in fashion may seek to get their ears pierced due to varying reasons as we found in the case study. (Brown, 2012)

The idea of clip on earrings, which could be clipped onto the ear without the person wearing them, having to get their ears punctured, had been around long before the launch of the limited liability corporation now known as Cliptomania. The only problem was that this specific market in the fashion industry was not nearly as exploited as the standardized earrings which required punctures in the ear lobe. (Brown, 2012)

The Santos family noticed that this specific market was not exploited enough, and that there were not enough options in accessories or designs for people who had an interest in the idea of clip on earrings. The Santos family then saw this as an opportunity to not only provides the demand of this area of fashion with the supply, but also to generate their own revenue and eventually starts their own small business. (Brown, 2012)

The Santos family launched their website, Cliptomania.com in 1999 and made sales through the Yahoo! Company. Although they initially wanted to launch the website themselves, they did not have any background in computer science. It all started in their home late that year when they made small sales for the holidays, launching their business with an initial total capital investment of $10,000. The Santo family was worried about internet fraud taking away from their sales, but fortunately Yahoo! Company had safeguards against such kinds of internet fraud. (Brown, 2012)

Yahoo! charges a fee for merchants to run their business through them, which would account for a cost of goods sold for the Santo family’s business. After making networking deals with the International Fashion Jewelry Accessories and Gifts, the Cliptomania business showed to be successful just a year after their launch. They started making international sales in countries throughout the world, but this can pose as a problem for a small business such as Cliptomania. (Brown, 2012)

When making international sales, a business may be subject to certain tax jurisdictions in those specific areas where the sale is being made. If the relevant taxes are not paid on these transactions, then it may cause trouble for both the seller and the buyer. It was unclear in the case study as to whether or not taxes were paid on such foreign transactions. (Brown, 2012)

It is our recommendation that Candy Santo, Cliptomania CEO, considers researching the relevant tax jurisdictions from foreign transactions. This may be done by researching the laws and regulations of foreign tax jurisdictions relevant to those countries, especially because these transactions are made online between two separate parties in differing location on the globe. The issue of taxes pertaining to inline sales transactions is an ongoing issue because it becomes confusing as to where the taxes apply. Cliptomania does not want to have any issues with their sales taxes or it may impair their business. Concluding, the Santo family may want to follow up with these concerns. (Brown, 2012)

References

Brown, D. H. (2012). Managing Information Technology . Prentice Hall: Upper Saddler River.