Setting up an online shop can be appealing. You can be your own boss, you can work in the comfort of your own home, and you can have flexible hours. However, there are some things you need to think through before launching your online shop.

1. Sales platforms

What system are you going to use to sell these products? One straight forward way of selling your products online is to use an existing marketplace such as eBay, Etsy or Gumtree. Using an existing marketplace allows you to sell your products without investing money into creating your website. You need to understand the rules and requirements of that marketplace, including their marketplace Terms and Conditions.

2. Payment methods

How will you be paid? There are many online payment options available. One of the most popular is credit card payment because of its ease and convenience. Debit cards use the same technology so if you have a credit card processing facility, you can usually accept debit cards as well. If you choose to accept credit or debit cards, you must take steps to ensure that card details are well-protected as payment details are sensitive information.

Some customers may not be comfortable with leaving card details on your website. In that case, you may wish to offer a direct deposit option. Upon request, you can provide customers with the relevant bank account details and instruct them to clearly describe their transaction so you can differentiate between different payments.

Your Sales Terms and Conditions need to set out your rights if a payment fails.  If possible, it is wise not to dispatch any goods until you have received confirmation that full payment has been made.

3. Minimum recommended resale price

Are your prices better than in store?  Is your supplier imposing a minimum recommended resale price on you, and threatening to cease supply if you do not comply?  This is not permissible under Australian law. A recommended resale price is a guide only, it cannot be enforced by the supplier.  It is against the law for the supplier to refuse to supply to you, for failing to sell at the recommended resale price.

4. Shipping

What carrier do you want to use? You should research the different carriers available to you. You can give your customers an option of which they want to use.  You need a reliable delivery service, as you need to deliver the product to complete the contract.

Do you want to offer free shipping? You may also consider offering free shipping for customers who make a purchase order over a certain amount. It can make your business more competitive but you should only do this if you can afford it. Alternatively, you might wish to offer flat rate shipping.

5. Customer service and refunds

How will you handle customer service?  You need to handle customer complaints as required by the consumer guarantees in the Australian Consumer Law.  You can also offer additional services and refunds if you want, for example a refund for change of mind. This is not required by the Australian Consumer Law.

Conclusion

With the internet becoming increasingly accessible, setting up an online business could be your dream. After you’ve considered all the practical aspects of setting up an online business, speak to a business lawyer about the legal aspects to make sure that your Sales Terms and Conditions protect your rights and limit your liability.

Ursula Hogben

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