Because...The pandemic has revealed the huge potential of е-commerce.
Starting an e-shop is an exciting adventure because it also involves certain risks.The web can be a wild place to trade, and a number of companies have found that simple mistakes can turn into significant business threats in a short period of time.
From choosing a domain to starting the first sales, there are a number of pitfalls in creating your e-shop. Let's call them - "risks of ignorance of the law."
The risks must be identified in time so that they don’t turn into fines, sanctions and even loss of business.
1. What will I sell?
First I need to know - is it allowed to sell my goods online?
If yes, the next question is - are there specific requirements, licenses, restrictions on their sale or advertising?
So, what are the requirements and can I handle them?
I want to sell nutritional supplements online. It seems simple enough, right?. In fact, it is much more complicated. Because, these products can only be sold online through а registered e-drugstore, e-pharmacy or as a trader with a licensed warehouse for storage of such products. If we have already paid several thousand levs to build an e-shop and learn about these requirements later, it may turn out that our business model requires a much larger budget and additional resources for management.
2. The choice of a domain is associated with legal risks
Here are the most important:
The domain must not reproduce or imitate existing trademarks, geographical indications or other objects of Intellectual property(IP);
Domain registration does not provide its owner with the same level of protection as a trademark (rights to commercial activity with trade goods and services under this trademark; prohibition of third parties to use it; right to license the trademark, etc.). The domain of your e-shop should not be similar to an earlier brand for the same goods.
3. Creating a website for your e-shop
The Internet offers ready-made and developed platforms that any novice trader can buy and use under license for their online store. If you want to entrust the development of your e-shop entirely to a web developer, you need:
- to enter into a solid agreement with the contractor, which will settle all major issues, such as penalties, responsibilities, guarantees and maintenance, rights and obligations;
- to select and integrate an appropriate payment method for the e-shop;
- to assign a mobile version of the e-shop;
- the necessary security mechanisms are integrated.
4. Register your e-shop with the NRA
The changes in Ordinance H-18 have created new obligations for every online trader, such as:
- a registration regime;
- an obligation to declare certain information to the NRA before the start of the e-shop;
- a requirement to store the information created through the software of the e-shop and to provide it to the revenue administration upon request within the terms specified by law.
5. The obligatory legal texts in your e-shop
Many merchants rely on ready-made GT&C and PP downloaded from questionable sources on the Internet, but this does not guarantee the necessary security of their e-shop, as:
- GT&C and PP must reflect the specifics and characteristics of the respective business model;
- there is a risk of infringement of Intellectual Property Rights;
- the downloaded GT&C and PP may not contain all the elements required by law.
It is recommended that the general conditions be prepared by a professional who will carefully inform himself with all commercial processes - registration, ordering, delivery, installation, warranties, complaints, etc., in order to assess their legality.
6. The requirements of the GDPR
Every merchant who sells through an e-shop has the quality of a Personal Data Administrator, as he collects information about his customers in order to fulfill orders and as such has the following obligations:
- to provide an appropriate cookie toolbar to give the online user the choice to accept only certain types of cookies;
- to create internal processes ensuring data protection;
- to implement mechanisms for exercising consumers' rights in relation to their personal data.
Before starting your e-shop, it is necessary to prepare documents, as well as all mandatory external and internal processes, in connection with the processing of personal data (register of personal data processing activities, procedure for processing requests of data subjects, procedure in case of а breach of security of personal data, etc.).
7. The content on the site
Be aware of the existence of copyrighted content on the site. The choice of content (visuals, text, product photos, etc.) is key to the success of your e-shop. Many merchants make the fundamental mistake of choosing photos, videos, texts and product descriptions, downloaded from the Internet, that are of foreign intellectual property.
8. Advertising and marketing campaigns must comply with the law
A good marketing strategy is fundamental to a successful business, but certain actions of online marketers can end in sanctions due to illegality:
- Google's AdWords cataloging service may be the subject of litigation in addition to being a source of revenue. The use of foreign brands as keywords in order to attract customers runs the risk of infringing Intellectual Property Rights because it creates the wrong impression of the origin or affiliation of the advertised goods/services with the trademark owner. In this way, the most basic function of the brand is affected - the function of indicating the origin of the respective goods and services.
- Marketing automation, if it is not subject to the rules and restrictions set by law, risks being classified and sanctioned as a violation.
9. Be informed about the requirements of consumer law
Customer loyalty is directly proportional to the quality and attitude that the online merchant offers. As an online merchant, you should be aware that:
- each consumer has guaranteed rights such as the right of withdrawal and the legal guarantee (which is different from the commercial guarantee);
- if the consumer decides to exercise his rights under the CPA, he must also comply with the order determined by law. Otherwise, you will have the right to object;
- the practices of each online trader are subject to strict legal regulation.
Any non-compliant online trader risks severe fines or sanctions from regulatory authorities.
If you'd like to know whether your site meets all legal requirements, do not hesitate to contact us via the contact form, here:
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