I read another thread in this forum, part of which discusses about a good neighborhood and how important it is to increase PageRank and drive traffic. But how to keep yourself from bad neighborhoods? How to keep a "bad neighbor" from linking to your website?

You can't really. Though why would some one want to do that to you? Even if you do get a bad link it won't weigh you down. I'm guessing you need multiple back links from a bad rep site for you to feel the impact.

Check out the following link for helping determine some bad neighborhood options - http://www.bad-neighborhood.com/text-link-tool.htm

That being said, the INBOUND links usually don't affect you, it's where YOU link to that can affect things. Just like you probably wouldn't visit the coffee shop if it had a biker bar on each side of it, the same is true of your website. Many of the problems with bad neighborhoods come from people sharing the same IP number as you. Low budget hosts don't care where they get their money from, as long as they get their money. This can mean that a church website resides on the same IP number as XXXPorn and BuyViagra website. This is bad for you.

So INBOUND doesn't matter so much as OUTBOUND, who YOU associate yourself with and who you recommend to your visitors.

The real problem would arise once you begin adding links to some low quality websites. The incoming links are OK in most cases even if your website is linked to from a lot of such resources as link farms but if you are for example talking about an issue and then decide to add links to some other websites, try being very careful about who you'd link yo.

Thanks so much guys for the information. I know that outbound links do affect our website reputation, but I am not aware about the IP things. So, do you mean to say that only dedicated server and VPS users who can make sure that they get "clean" IP for their websites?

For the most part, yes. In a shared hosting environment you're relying on the other people on the same server not to mess things up for everyone else. This is one of the big risks with shared web hosting, and especially hosts that overcrowd their servers with thousands of users. While the server may perform OK, you're taking a huge chance that 3,000 people are playing nice. I'd personally never run an eCommerce business on a shared hosting platform, but then again, I wouldn't do it as I want the reliability also. In the past I've paid $1500-$2700 per month for storefront rent. Why a person who only does business online insists on spending less than $10/month for "rent" is beyond me!

Great point Conor. Everything is relative - how important is your store's worth to you?

Well, people gotta start somewhere, and $10 is adorably average, but there are many steps before you get into the eCommerce stuff, so your point nevertheless stands.

One of the steps people overlook is that if they're starting a business, they SHOULD (i use must, but many people use should) have a business plan. With a business plan you can outline the success of your business and make strives toward it. Anyone who tries to "launch" a business and has a monthly budget of $100 or less really should not be launching a business.

I personally believe that $1,000 or more should be allocated within the first few days to launch a business. Now if you're planning the "build it and they will come" method, then sure, get FREE hosting for that matter, you're not taking business seriously.

I know a lot of people won't like that I put it in plain text like that, but the fact of the matter is, if you're in business, $10/month hosting will not cut it and your budget should be a lot higher by the time you take into account your business licences, software, hosting, credit card processing, telephone, internet connection, and everythign else that comes with it. To operate in any other capacity, in my opinion, is a hobby.

eCommerce is business and needs to be treated and approached as such.