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Founded in 2005, Etsy is an online marketplace that allows community members to broadcast their creativity and sell unique arts and crafts or vintage goods online. Now worth $23.85 billion with over 25 million users, Etsy is one of the largest and fastest-growing platforms available to consumers today. Here, we run you through five quick tips to consider before you open your own Etsy store.

1. Consider a Business Name

Deciding on a business name can be much harder than you think. So where is a good place to start? We recommend starting by asking yourself two questions:

  1. Has someone already trade marked my proposed business name?
  2. Will I be able to register the business name?

Note the differences between a trade mark and a business name. When you trade under a name that is different to your own, you must register your business name with the Australian Securities and Investments Commission (ASIC). To register your business name, you can search the Australian Business Register (ABR) and see whether the name you are wanting is available for use. The ABR will not approve your business name if an identical or very similar name is already registered. Hence, be sure to do your research before applying.

Likewise, it will be beneficial for you to do some preliminary research surrounding any business name ideas and be open to creating alternative business names.

A trade mark over your business name is an entirely different process. IP Australia is the body that governs intellectual property rights, including trade marks. You can check whether or not your proposed name is trade marked on IP Australia’s search system, ATMOSS. Your next step is to register your trade mark. A registered trade mark adds extra protection to your business name by preventing others from using and selling under your brand name. 

When applying a trade mark for your business name, it is best to engage a trade mark lawyer. Seeking specialist advice can help you avoid the costs of making errors in your trade mark application.

2. Consider Whether You Need an ABN

In Australia, you require an Australian Business Number (ABN) if you:

  • are an enterprise in Australia;
  • have an intention to make a profit; and
  • can demonstrate that you have a business structure in place.

Suppose you are only opening your Etsy store as a hobby to showcase your creative spark, as opposed to operating it as an online business. In that case, you will not require an ABN. However, if your store generates over $75,000 in revenue, you will need to acquire an ABN. 

Once you obtain an ABN, you will receive certain benefits including the ability to reclaim goods and services tax and using the PAYG tax system. 

Additionally, following government regulations, you will need to register your business for GST with the Australian Taxation Office. There may be other tax responsibilities of a small business that you should note.

3. Have Caution When Taking Images

All the images you see online receive protection under automatic copyright laws in Australia. This includes imagines you find on Google. Hence, if you want to use images to display the products you sell, you will need to get permission from the copyright owner. This is known as a copyright licence

Additionally, some websites provide images that are already in the public domain. As such, you can use these images without permission. If you are unsure whether you can use the image, it is best to check with the owner or the domain first. It is also important that the picture you are using accurately represents the product you are selling. If the buyer receives an item that is different to the picture, you may need to provide refunds to customers.

4. Consider Warranties & Guarantees

It is important to note that Etsy’s terms and conditions do not cover customers for any misrepresentations as to the quality, safety or legality of products. Likewise, Etsy also does not guarantee that there are no defects or they will correct errors. This rests entirely with the seller (i.e. you).

Under Australian Consumer Law, consumers who purchase from a business have protection under consumer guarantees. If you are running your Etsy store as a business, it is likely the consumer guarantees apply to your goods. Practically, your business should guarantee that your products (among other things):

  • are of acceptable quality;
  • are produced with due care and skill; and
  • match the advertised description.

If you are not operating your Etsy store as a business, you may be a private seller. Likewise, the Australian Consumer Law may not apply. If you are unsure, it is best to engage a lawyer. 

5. Consider Tax Responsibilities

In Etsy’s terms and conditions, sellers are responsible for paying any tax on the sales that they make. This means that if you need to pay tax, you should adjust the price of your products yourself to cover the cost of tax payments.

Key Takeaways

Turning your creative passion into a business can be a deeply rewarding experience. As an online marketplace, Etsy might be the ideal platform to open up your own Etsy store. However, there are some things to note, including:

  • choosing a unique business name;
  • applying for an ABN;
  • respecting copyright on images;
  • respecting Australian consumer laws; and
  • considering tax responsibilities.

For assistance with setting up your own Etsy Store or selling products online, contact LegalVision’s e-commerce lawyers on 1300 544 755 or fill out the form on this page.

Frequently Asked Questions

What is the difference between a business name and a trade mark?

A business name is one you register with ASIC, especially if you trade under a name that is different to your own. A trade mark is a form of protection you can apply to several elements of your business, like its name, logo or slogan. With a registered trade mark, you can prevent others from misusing your business name.

What warranties and guarantees do I need to note?

Under Australian Consumer Law, consumers who purchase from a business have protection under consumer guarantees. Practically, your business should guarantee that your products are of acceptable quality and match your advertised description. Also, there is a guarantee that you will produce your goods with due care and skill.

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