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Friday, July 4, 2014

Is Magento Enterprise a better choice than Magento Community?

By Marta Gromadzka

Magento Community Edition is free open source shopping cart highly praised by majority of its users, therefore the launch of Magento Enterprise Edition was seen by many as an unnecessary move: if we already have an open access to a free platform why launch a platform with similar features and ask for $15,550 annually? Can Magento Enterprise Edition be really worth this kind of money? Magento Enterprise Edition does have several features, which can be extremely useful for some businesses. Let’s take a quick look at some of them:

Better for online stores with lots of products

Free open source shopping cart
Fast checkouts raise conversion capacity
If you sell 100 products through your online store, you will not see any difference between Magento Community and Enterprise Edition. But raise the number to 10,000 or 100,000 and the difference is noticeable. 

Magento Enterprise Edition can speed up a website by as much as 3,000%, if we are talking about big online stores with extensive product catalogs. Full re-indexing is sped up by 83% in Magento Enterprise. The result is improved adding of new products and changing prices – in Magento Community this process could take 12 minutes before the product was visible to customers; in Magento Enterprise it literally takes seconds to upgrade your offer.

Powerful backup system

Problems with backup system in Magento Community are known to anyone, who ever made a change to the site and wanted to roll back to the previous version. Unless the user made a backup of the database before the change was made, there is no way to go back to the previous version. In Magento Enterprise the problem simply does not exist. You can go to the previous version of the product page or content page whenever you want, it’s easy and quick.

Faster checkout procedure

Have you noticed an increased number of shopping cart abandonments? Maybe it is high time to check the Magento Enterprise Edition. It promises much faster checkout than Magento Community and it is one of those features, which can have a significant impact on the number of clients, who order from your online store. Faster checkout for mobile platforms is one more reason to consider Magento Enterprise Edition.

Customer segmentation

Advanced marketing techniques, such as customer segmentation integrated into Magento Enterprise, are one of the main reasons, why customers choose Enterprise over Community Edition. What is consumer segmentation and how it can be used for marketing? Customer segmentation allows you to divide customers into different groups, based on their order history, location etc. You can use this type of data to create customized deals and coupons, for example coupons for customers, who order from you for the first time or up-selling offers based on the content of the shopping cart. In hands of a knowledgeable expert this kind of tool can be a real game changer for your online store and provides you with an opportunity to better address the individual needs of your customers. 

In conclusion, Magento Enterprise is not for everyone, but it doesn’t want to be – this edition offers features and functionalities, which will be most useful to big online retailers and large companies wanting to sell more. Do you want to give Magento Enterprise a go? Hire a Magento development company to have more functional online store.

About the author: Marta Gromadzka is a writer and editor with a wide variety of experience, including writing for websites internationally and editing books on many different subjects and in a variety of formats. Magecom Magento development company Google+ page

Thursday, July 3, 2014

Consumer finance report shows seniors are carrying more debt

By Frank McCourt

Senior debt
Retirement money is often a fraction of pre-retirement income
Statistics related to senior citizens have remained static for quite some time.  Four out of five senior citizens own their own homes, elderly drivers still make up around 10% of the motorists on our roadways and 4 out of 5 elderly people will battle some form of chronic illness.  While these facts and statistics remain the same, there is one outlier that is emerging.  Debt.

In a study put out by the Consumer Finance Protection Bureau, indebtedness has been steadily climbing for older Americans.  What is the main culprit? Mortgage debt.  The study shows that the average amount owed by older home owners and retirees almost topples $80,000.

The elderly have also been shown to consistently fall behind on housing costs almost three times as much as those in other demographics.  Falling behind on your mortgage, no matter what age demographic you are in, will consistently result in the same consequence, the risk of foreclosure.  The percentage of elderly who took out a home equity loan has grown by almost 20% in the last 30 years.

To avoid this risk of foreclosure, there are several steps you can take to safeguard against this happening to you or someone you know. The first is a matter of taking out a home equity loan.  While initially appealing,  a home equity loan is essentially taking out a secondary mortgage.  Taxing a mortgage with another 15 to 20 years is an entirely different ball game when you are in your late 60’s.  If you are senior or know of one that is in need of home renovations, you should steer them away from taking out a secondary mortgage and instead explore options like eldercare.gov which provides seniors with financial services for home renovations.

Next, make sure you heavily weigh the repercussions of diving into that second home.  The notion of retiring and immediately looking into purchasing a condo or a time share is quickly becoming antiquated.  Not only do these pose unique insurance risks but the trend in real estate in your area and the area of intended purchase may be vastly different, setting you up for a host of different problems later down the road.

Refinancing can also be an option many of the elderly consider when they start to think of different ways to supplement their monthly retirement benefits.  While this can occasionally be a good idea, it is important to look out for the many pitfalls that can arise when refinancing.  The home equity and modification market is ripe with scams and to the untrained eye an appealing deal that at first glance seems lucrative could be a bit deceptive.  To avoid this, read reviews, inquire with the Better Business Bureau and ask around and see what worked for others.

While home mortgages make up the bulk of these debts, seniors are also taking on more credit card debt than they have in previous decades.  To get some sense of how these debts have grown, the average debt for Americans over the age of 75 in 1989 was unmeasurable.  Compare that to the current numbers that place senior’s measurable credit card debt at around $6,000 and you can begin to see an escalating trend.  Seniors struggling with rising credit card debt should be urged to seek out lower interests rates to evade increasing debts, late fees and other financial repercussions .

At the end of the day many financial experts recommend safely managing your retirement to avoid many of the dangers that can come when funds are spread too thin and poor financial decisions are made.  Bob Curtis, president of PIEtech states the following:

“Everyone approaching or in retirement should have a meaningful retirement goal plan.  It doesn't need to be a complicated, comprehensive plan, but requires more than a calculator. There's just no way to provide competent advice without having a holistic picture of an investor's goal and resources."

About the author: Frank McCourt writes about finance in the modern world, he also reads old literature from the not-so modern world.   In his free time he writes for Senior Care Franchise.

Image: US-PD

Wednesday, July 2, 2014

Benefits and disadvantages of employee stock options and share ownership

When employee stock options are a good idea
Employee stock options usually cost less than market price
Issuing shares to employees of corporations can be achieved through a number of methods including stock options, employee stock ownership plans (ESOPs) or employee stock purchasing plans (ESPP).

Each form of share offering has unique advantages and disadvantages, several of which they have in common. When companies offer employees shares, the net benefit or disadvantage to that corporation is often carefully weighed before taking the decision to carry out such an  endeavor.


Tax deductibility

A number of corporate benefits arise out of employee stock ownership plans. Specifically, tax benefits  including either tax deferral or tax exemption. For example, according to the National Center for Employee Ownership (NCEO), a large C-corporation that sells 30 percent of its shares to employees can defer tax on gains from the reinvested proceeds; and in the case of smaller S-corporations, 30 percent of total corporate income is tax exempt from federal taxation. 

Conserves cash

Additional advantages exist to offering employees shares of a corporation through stock option programs. For example, according to the Congressional Budget Office (CBO), stock options help minimize compensation costs. Moreover, when stock options are valued using an accounting method known as intrinsic valuation, the stock options do not have to be recorded as an expense, thereby keeping earnings numbers higher.

Improves performance

Offering stock to employees can also assist in retaining quality employees, and developing corporate pride per the Edward Lowe Foundation. Furthermore, when employees are also substantially vested owners of a corporation, their performance becomes more closely linked to the share price of a corporation. For instance, if stock options have a purchase price above current market prices, then in order to make a profit from those stock options, the price will have to rise in the future and possibly affect work output, quality and production in a positive way.


Stock dilution

In addition to the cost of establishing an employee share ownership program, stock dilution can cause equity capitalization to drop. Moreover, if an issuance of stock to a stock options plan  is too large, the diluted earnings per share for the company can become substantially lower. This can negatively impact cash-flow per the Menke Group. This in turn can compound managerial incentive issues, cash flow and financing costs.

Managerial complications

Another substantial disadvantage of issuing shares to employees is the price can drop and potentially create managerial issues per Inc. Magazine. Moreover, since one of the reasons for offering stock ownership choices to employees is to boost morale and improve corporate culture, employees of that company also become more exposed to market or economic events that could have a negative affect on motivation and production. A similar affect may occur if the stock options are not viewed as substantial or if the performance expectations for both the corporation and employees is unrealistic.

Limited availability

Depending on the particular plan used by a corporation, offering shares to employees can be limited to full-time employees only per the NCEO. Furthermore, ESOPs are not available to partnerships and many professional businesses according to the NCEO. Unless a corporation is in the practice of only hiring full-time employees, or has a structure that allows ESOPs, a benefits gap may reduce the effectiveness of the stock offering to increase production and ownership related objectives.

Image: Dave Dugdale, CC BY-SA 2.0
"Analyzing Financial Data"

Tuesday, July 1, 2014

Newsletter: Quantification of environmental friendliness