Starting an eCommerce business is an exciting process for an entrepreneur. These days, consumers are more comfortable than ever making purchases online, and eCommerce platforms are now quite safe and secure for buyers.
But how do you protect yourself as an eCommerce entrepreneur? What measures can you take to keep your business and your customers safe?
There are quite a few potential dangers for eCommerce entrepreneurs, from intellectual property issues to cybersecurity to the stability of your revenue streams. In this article, I’ll discuss five ways you can protect yourself and your business as an eCommerce entrepreneur.
5 Best Ways to Protect Yourself as an eCommerce Entrepreneur
1. Use a Reputable eCommerce Platform
These days, there are plenty of eCommerce platforms to choose from, with a variety of different features. While your needs may vary as far as features go, it’s important to find an eCommerce provider that’s focused on security above all else.
Good eCommerce providers need to have advanced security measures in place that can protect business owners and their customers. A big part of this puzzle is making Transport Layer Security (TLS) available to secure sites with the HTTPS protocol.
In general, most of the major eCommerce platforms will have this and other security functions in place. If you choose a company like Shopify or BigCommerce, you can rest easy knowing that your safety is a priority for them. If you’re dead set on using a niche eCommerce provider, just make sure their security procedures are up to snuff before you buy-in.
2. Form a Limited Liability Company (LLC)
Forming an LLC is one of the best ways you can protect yourself as a business owner, whether your business is driven by eCommerce or not. A limited liability company’s business structure provides its owner(s) with personal asset protection. This means that if your business is sued, you are not held personally responsible for the lawsuit.
In case of a lawsuit, your creditors would only be able to pursue your business assets, while your personal assets like your house, car, and personal bank accounts would be protected. You can also get this type of “limited liability” protection from a corporation, but the LLC is much easier to form and maintain, so it’s a better option for most readers in my opinion.
3. Trademark Your Logo and Business Name
While forming an LLC does secure your business name for exclusive use within your state, it does not protect your name beyond that. Therefore, you should trademark your business name through the United States Patent and Trademark Office, which will ensure that no other business entities can steal your name for their own use.
Furthermore, you should also make sure to trademark your business logo. The last thing you want to do after having your perfect logo designed is to have someone else swoop in and use it. Therefore, you should definitely take steps to protect your logo as well.
4. Create Secure Passwords and Use Two-Factor Authentication
Part of me feels like saying “secure passwords are important” is a bit too obvious in this day and age. On the other hand, there’s a shockingly large amount of people who still use incredibly insecure passwords. After all, this CNN article from 2019 says that the most common password in the world was “123456.”
Considering that this article wasn’t written all that long ago, I feel like this may actually be a point worth revisiting. In short, your passwords should be at least eight characters long, and they should include at least one capital letter and one special character.
The more important part of this section is two-factor authentication. This means pairing your password with a fingerprint or retina scan, or a unique code that can be texted or otherwise messaged to your smartphone.
Two-factor authentication provides a backup plan if your password becomes compromised — to actually get into your account, any would-be hackers would need either you or your phone to be physically present.
Much like the TLS/HTPPS protocols discussed in the previous section, most major eCommerce platforms have two-factor authentication options already built into their platforms, but many users still don’t take advantage of them. For something as important as your online business, we strongly recommend doing so.
5. Diversify Your Revenue
One common mistake made by eCommerce entrepreneurs is to put all your eggs in one basket. Even with an online-only business model, diversifying revenue streams is a must for any business owner.
How can you do this with an eCommerce business?
One great option is to start selling your products through popular online retailers like Amazon, in addition to selling them on your own eCommerce website. The more places your products are available, the more potential customers will see them.
Another idea is to create additional product lines that complement your primary products. For instance, if you sell makeup, perhaps you could branch out into selling other beauty and cosmetic items. This not only provides your business with additional revenue streams, but it also could help drive up demand for your primary product as well.
In this article, I presented ideas to protect your personal assets, your intellectual property, your online security, and your revenue streams. This is because protecting yourself as an eCommerce entrepreneur is a multi-faceted issue that requires you to pay attention to several different areas of business ownership and development.
In addition, all of these factors are tied to each other in a way. If you lose your personal assets due to a lawsuit against your business, you may not be able to continue operating your company. If your intellectual property ends up being borrowed or stolen by other business entities, you could lose the trust of your customers.
Subpar online security could have wide-ranging effects on your business, as malicious hackers can turn an eCommerce entrepreneur’s life upside down in many ways. Finally, if you don’t protect your revenue by developing multiple streams, a decrease in demand for your product could cause your business to collapse.
I hope this article helped you focus on some ways you can protect your growing eCommerce business! Please do keep in mind that this is not legal or accounting advice and simply my personal preferences. If you have any questions, it’s always worth consulting an attorney.
About Aaron Franklin:
Frustrated by all the options and aggressive online sales tactics, Aaron Franklin created BestLLCServices.com to cut the clutter and bring clarity to entrepreneurs starting an LLC. Their focus is on reviewing and comparing the top LLC formation services while also crafting
free resources that help you start a business. They sincerely believe finding the right service and free information should be a simple process so you can get started with minimal friction.