Dispelling rumors about WordPress, PayPal and Tea Trade

[peter]

Since even before Tea Trade went online we were under a rather public attack by a few members of the online tea community. These voices accused us of wanting to control the tea conversation (our response to that was that we wanted give the conversation a better place to happen).

It has come to my attention that the same person is publishing information about WordPress and PayPal which is potentially damaging, though more importantly, completely wrong.

The writer, in an article called, Tea Writers – Desperately seeking income, gave some interesting information about how difficult it is to make money as a blogger. Much of this is I wholly agree with. It is very hard to make money as a tea blogger. Professional blogging is a very tough business and very few people make real money at it. Blogging in a niche like tea is even harder.

Despite this, the writer mentions WordPress and PayPal in her post and gives information that is 100% wrong (and given our past experience with this person, I can’t help but think that she wrote it as another slight on Tea Trade.) My concerns about this is that it is rumor-mongering about two fundamental and core systems of Tea Trade, systems that we publicly announce we use. Jackie, Xavier, myself and all the others have confidence in these systems – and I’ve looked at them from a developer’s point of view, which has further raised my confidence in them. I’m posting this to ensure that members and visitors understand these are just rumors and that your confidence is warranted.

Anyhow, this is what she said regarding PayPal:

“Avoid PayPal. As of January 1, 2012, they will be requiring that you allow very sensitive information about yourself, such as your Social Security Number, be allowed to be e-mailed to you, thus putting you at risk of identity theft.“

Here’s the truth about PayPal and social security numbers. They collect them from sellers for various reasons to include fraud protection, seller and buyer protection, credit checks for various services and more. The reference made to 1 Jan 2011 is a reference to Internal Revenue Code Section 6050w. Basically, it mandates that PayPal and all other US payment providers report sellers to the IRS sellers who receive a gross over $20,000 AND over 200 payments annually.

Sellers who meet the threshold will be snail-mailed or emailed a tax form 1099-k. That form will report your tax ID number. If PayPal has your SSN on file as your tax ID number, then your SSN will be on that form. Is that bad news? Not really, because any 19-year-old, first-year business student will tell you that if you made $20,000 in sales this year and are still using your SSN as your tax ID number then you’ve got more to worry about than PayPal sending you an email. This would include fine-able and potentially jailable offenses such as operating without a business license and tax evasion among other things. 

Joking aside, if you have made $5,000 in sales and haven’t begun investigating setting yourself up as a legal business entity (which will provide you with an Employer Identification Number, an EIN to replace your SSN on business related tax-forms) then you need to get started. At a minimum, creating a Sole Proprietorship with a fictitious business name filing will get you what you need. For others, who want more protection a limited liability company (LLC) may be suitable.

$20,000 is a lot of money and some would argue that proper tax reporting is warranted at that level (certainly the IRS thinks so). Setting yourself up as a business well before you reach that level is just common sense. The comment made by the blogger was an uneducated and incomplete fact. If anyone has any questions about small business entity registration in the U.S., send me a private message, I will personally help you with your research and point you in the right direction (and for a reasonable fee, we’ll even offer a consultation on what business entity is right for you based on your operational wants and needs and even help you with the forms and filings!)  See, Tea Trade is a full-service operation for tea entrepreneurs!

Now, getting to WordPress. This is what our intrepid blogger had to say:

“A word of caution about WordPress
Pay close attention to the user agreement. If you have a free blog through WordPress.org, you cannot have affiliate program links and ads. If you go to WordPress.com and pay for your site, then you may be able to have ads. Again, read the user agreement carefully.“

I cannot speak for the services offered at WordPress.com (one of the blog hosting providers with whom we compete). I do occasionally login to my account there to spy on what they are up to and get inspiration for what kinds of services Tea Trade should be offering to bloggers (I do the same thing at Blogspot too). She is correct that WordPress.com hosted blogs cannot add affiliate advertising. However, WordPress.org is another story entirely.

WordPress.org is nothing but the place to obtain a downloadable copy of the WordPress software. It is, in fact, where I got this one from. WordPress is released as open source software under the General Public License. A copy of which is included with every download. Nowhere in the license does it say that the user cannot add affiliate advertisements to their blog. The license does not deal with content, its intent is to offer controls and guidelines on the re-distribution of the software package itself. Installations of WordPress downloaded from WP.org are sometimes referred to as self-hosted because the user installs them on their own webhost.

WordPress, Automatic, or the WordPress foundation has no say, or interest, in what you put on your blog. On a self-hosted installation of WP, the user can put in whatever content they want (including as many affiliate advertisements as they choose). 

Now, Tea Trade doesn’t offer self-hosted installs, because we are the host. We are an equivalent (on a programmatic level) of WordPress.com, or Blogspot, (only dedicated to tea, instead of being open to anything.). Since that is the case, we make the rules. That said, if you want to create affiliate contracts with a dozen different tea companies and setup rotating affiliate advertisements on your website or blog here, by all means, have at it. I’ll even provide you the resources, and technical support to get those ads in place if you have trouble! When people follow those ads, it is good for the blogger, and the vendor (and what is good for the blogger and vendor is generally good for Tea Trade too!)

Again, the comment made by the blogger was uneducated and uninformed.

In summary:

I’m not sure why the random rantings of a blogger set me off, maybe it is because of the rude and public comments that were made by this person to us in the past. One really shouldn’t take things like this personally. I put a lot of work every day into making Tea Trade happen. I don’t get paid for it. As Jackie is keen to remind, even after we process $1000 in sales for or sellers, we still only make $30 (we make no secret that we get 3% of each sale). This will all change later this year as we add more interesting services to sellers, shoppers, vendors and bloggers.

 Building Tea Trade is a hobby I love. It is very much a challenge and an adventure where one little mistake can bring the whole network down. Jackie loves it too and together we really are seeking out to change the world of tea. We started out blogging and decided we wanted more influence, so we created Tea Trade. Our goal is to have an effect on the industry and in the process, make more decent loose tea available to more people across the US.

Sorry for the rant, but sometimes, it is good to quell rumors before they spread, though when responding to rumors, one never knows if responding will help so make of all this what you will!

/endrant

[Anonymous]

Haha, good, solid rant. Though I might grammar/spellcheck a bit further. It turns out that the ‘anonymous’ writer you are talking about is a little nutty. Personally, I wouldn’t worry about what she says, but it is good to know about the paypal/wordpress stuff! Thanks Peter!

[Gingko]

Very good information Peter!

I rarely see complains about wordpress. In the past, I did see some articles blaming paypal. But none of them convinced me there was any other better, easier, safer alternative that provides comparable functions as paypal does. It’s easy to point out drawbacks but everything has some drawbacks. Until a better alternative emerges, I will keep using paypal and unwillingly pay its infamous transaction fee :-p

[Gingko]

Just remember this and would like to give some updates.
I think I got my first fraud payment through paypal – or am I lucky to get only the 1st till now? :-p

But it’s pretty much my own fault. I shipped a package before the e-check payment was cleared, while paypal strongly warns against it. Therefore I’m not covered by paypal’s seller protection. But overall paypal is not to be blamed and they do have sort of seller protection.

So like I said before, so far paypal is still the best means of paying and receiving payment for me. And hopefully this won’t happen again!

[Robert Godden]

I like reading blogs by nutters.

[Author]

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