7 Legal Tips When Building an eCommerce Business

Many entrepreneurs opt to open eCommerce businesses, particularly if they’re working alone or with a very small team. Typically, eCommerce businesses are easier and less expensive to open than a brick and mortar retail location. While you will get a pass on some of the hard work, you won’t get a pass on your legal obligations. Before you assume things will be a breeze, make sure you’ve considered everything.

1. Displaying or Calculating Tax Properly
Tax is calculated and displayed at different points of a sale in different countries. American shoppers are used to finding out what the tax will be just before they’re about to pay. Australian and UK customers are used to tax being added to the purchase price of the item, and won’t take kindly to finding out they owe more than they anticipated at checkout. Be clear about how and when you charge tax, and most importantly, collect the necessary tax on everything.

2. Knowing What You Can and Can’t Ship
Nail polishes, aerosol sprays, chemicals, or anything flammable may be restricted from shipping. So can perishable goods, like food. There’s always a way to work around these restrictions, but you need to speak with your shipping company to determine how to circumvent those restrictions. Always be honest about what you’re shipping, or the company might take actions against you for fraudulently using their services.

3. Dealing with Underage Shoppers
COPPA, the Children’s Online Privacy Act, legally prevents websites from collecting personal information from children under the age of 13. You need to enact safeguards, like collecting birthdates and making visitors comply with the terms of service, to prevent liability in the event that someone under 13 attempts to submit personal information to you. These safeguards are even more important if your website retails nicotine products or alcohol, which are age restricted items.

4. Where You Can Operate Your Business
Many eCommerce businesses are run from home. In certain circumstances, that’s perfectly fine. If you’re storing a lot of inventory in your home, that might be a problem. Zoning laws and regulations may prevent you from keeping your stock at your house – you might require a commercial building or an office space for your goods in order to remain compliant.

5. Do You Need Licensing or Permits?
Licensing and permits can get confusing. They’re very contingent on what you sell and how you’re selling it. If you’re ever unsure about whether or not you’ll need licensing or permits, it helps to contact a lawyer. You might want to maintain a relationship with that lawyer if you’re going to expand or change a business that needs licenses or permits in order to keep yourself in ideal standing throughout every part of the process.

6. Protecting What’s Yours
Proprietary products need patents. Logos and other intellectual property need copyrights or trademarks. Anything unique to you that allows you to conduct business or achieve brand recognition needs to be officially and legally recognized as yours. Make sure you’re protecting all the things that make you different – if you don’t, competitors can take your ideas and you’ll have a difficult time defending yourself.

7. Keeping Data Safe
Data breeches often affect eCommerce businesses. Hackers or malicious programs can intercept customer information, including credit card numbers, and jeopardize the safety of the people who shop with the affected online retailer. Don’t put yourself in jeopardy. Make sure you’re constantly evolving to meet new security threats, and don’t cut corners when it comes to website safety.

Legal mistakes are some of the most difficult mistakes to rebound from. Make sure every “i” is dotted and every “t” is crossed before you launch your eCommerce business.

Lucy Taylor is an avid blogger who enjoys sharing her tips and suggestions with her online readers. Working as a legal expert at LY Lawyers, Lucy often helps people dealing with legal problems, addictions and crime.


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