6 Legal Tips for Your eCommerce Business
- eCommerce

6 Legal Tips for Your eCommerce Business

So, you are thinking about starting an online business. Or, perhaps you’ve already leaped and are now searching for insight into the realm of legal considerations. Building a successful internet business can be a lot of work, but it doesn’t have to be a legal nightmare once you have the right lawyer

Hypothetically, e-commerce business transactions should be clear-cut. You provide a product or service, and the client pays you for said service after it is received. Though rarely are things ever truly that simple, especially in the land of technology and law. 

1. Copyrights, Patents, and Trademarks; Oh My! 

Most people know that these terms relate to ownership but can’t be much more specific. They all indeed protect against someone stealing your work, but they’re not interchangeable. It is mission critical that you understand the difference between them! That way, you know which applies to you.

First is the copyright. This safeguards the work of authors. We’re not just talking books, but also music and art. This is why you can’t slap your name on the cover of an Agatha Christie novel and try to sell it as your own.

Next, the patent. This one is all about inventions. If you invent something brand new, the Patent Office wants to know about it. They want to make sure that invention is available to people long after you’re gone. So, in exchange for you giving up the secrets of that new invention, they’ll make sure no one else is allowed to make that invention but you – but only for a limited time.

Finally, the trademark. It relates specifically to businesses and, therefore, is probably the one you should focus on learning about. This protects your brand’s visual aspects. Whether it is a word or phrase, a symbol, or design, if it denotes that a product came from your business, no one else should be able to use it.

2. Taxes

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Let’s cut right to the chase – you’re going to want to talk to a professional about taxes. This is probably the most complicated part of your new business, and it changes continuously. 

The taxes you pay are going to be very heavily influenced by where your business is located. This varies not just by state, but by county and even city as well. These specifics determine not only how much you get taxed but on what items.

Understanding and keeping up to date on the rules that are specific to your situation isn’t the only reason to get yourself a tax professional. They’ll also help you get a tax ID and help you figure out sales tax. Some apps can also help out, but a seasoned professional is your safest bet.

3. Business Insurance

Several types of insurance may be relevant to your business. Talking to your insurance provider is a crucial step. It’s a smart idea for new companies to consider product and professional liability insurance, at least, though others are depending on your business.

Product liability insurance is for businesses that manufacture, distribute, or sell any physical products. You could potentially be held accountable for the safety of that product and, without insurance, that could be the end of your business.

Professional liability insurance is also known as Errors and Omissions insurance. It protects your business against claims of negligence, malpractice, or error. Don’t let one screwup take the whole ship down.

4. PCI Compliance

This one is huge. Unfortunately, being an online business means that you are at a higher risk of being a target for theft of customer’s data. We know that’s the absolute last thing you want. That’s where the PCI standards come in, or the Payment Card Industry data security standard.

Determining compliance requirements can be a bit tricky since there are different levels of compliance needed for different-sized businesses. As a merchant, you will land under one of four categories based on the number of debit or credit card transactions processed via your site in a given 12-month time frame. 

It’s worth the time to verify where your e-commerce site falls and confirm you comply. Failure to comply can cost you just as much and be just as much of a hassle as having users’ data stolen!

5. Inventory

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Inventory

This point is geared toward e-commerce sites with a substantial stock of physical products. Sure, it is easy, cheap, and convenient to store the custom picture frames you make in the garage. However, some laws may prevent you from doing that. 

If those fun picture frames are selling like hotcakes and you have a large enough supply, your business might be too big to run out of your home. You can check this fairly easily by taking a peek at your lease, deed, or zoning codes to confirm there are no restrictions on establishing the business you want to have out of a residence. 

6. Terms and Conditions

Yes, we know you know that no one likes to read the small print. That doesn’t mean that you don’t need a lawyer to draft a concise and clear set of Ts and Cs to cover your behind. 

There are some key things you want to decide before you decide what to include. First and foremost, understand the reason for writing the Ts and Cs. From there, clearly outline what you would like to and what you need to discuss with your legal team. 

For instance, the Consumer Contract Regulations has specific stipulations for what is included in e-commerce Terms and Conditions and what information needs to be made available to the buyer.

Also, don’t forget to ask for a section for Liability Limitations in there. This helps define exactly what the client can expect from your product or service and narrows the scope of any repercussions in the future. 

Moral of the Story, Know the Rules!

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Moral of the Story, Know the Rules!

 

It can all make your head spin, we know. Just remember why having an online business is so important to you and keep your eyes on the prize.

Do the appropriate due diligence and make sure you have the proper trademark or patent if necessary. You’ll be glad you did once your business is booming! Then, of course, don’t forget about the taxes associated with being an e-commerce business.

Insurance is a must for all other aspects of life, and online businesses are no different. And as fun, as it is to be able to sell your product from the comfort of your home, make sure that is something you are allowed to be doing. 

Establishing terms and conditions can take some serious time and think. But remember, they are there to cover your business and set clear expectations for the customer for what they will and will not be getting. 

With a little professional help and some elbow grease, you can take your business to the next level online. Go ahead, aim big!

6 Legal Tips for Your eCommerce Business

eCommerce Development

About Gabriel Nelson

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