Before setting up an eBay store, there are some details you should first iron out. It is prudent to understand the legal requirements for establishing your eBay store, as well as good business practice for protecting your brand and your liability.

1. Trademarking

It is important that you choose a name that another business has not already registered as a trademark. Do a thorough search of the trademarks register, as well as general searches to see whether businesses are operating under the name that you are interested in. You don’t want to start your store only to find that someone has trademarked the name, and you are infringing.

It is also a good idea for you to consider trademarking your shop name. This is particularly important if you are hoping to grow your store and establish it in the marketplace, which is hopefully your plan!

2. Business Structure

Setting up an eBay store is no different to setting up any new business. You need to think about the structure of your business. Will you be operating as a sole trader or a company? Are you partnering with someone else and want to establish a partnership, or are you setting up a company with multiple shareholders? You may also need to consider what structure would be best for asset protection and limiting your liabilities.

3. Distribution Agreement or Manufacturing Agreement

How are you supplied the goods that your eBay store will sell? If you are establishing a relationship with another business to sell and distribute their goods, or if you are having products manufactured by another business, you will need an agreement that outlines the terms and conditions of the arrangement.

4. eBay Rules

On top of the legal requirements for setting up a business, eBay requires store owners to comply with their rules. You should carefully read eBay’s policies and requirements so as to know what obligations you have as a store owner to eBay and your customers.

5. Bidding Process

Similarly, remember that a bidding process is a legal contract. Usually, if there is at least one bid on your item, eBay will not allow you to withdraw the listing except under specific circumstances. To avoid breaching any contract in the course of your business, you should become familiar with both the bidder, and the store owner’s rights.

6. ABN and Tax

If you are running your eBay store as a business, rather than just a hobby, you will need to include your income on your tax return. To do this, you will need to get an Australian Business Number (ABN) for your business.

Conclusion

Get your eBay store off to a strong start by ensuring you understand your obligations. A lawyer can draft up a Distribution Agreement or Manufacturing Agreement that protects your liability, and clearly outlines your rights and obligations. It is also sensible to seek advice about the best business structure for your goals in running your eBay store.

Questions? Get in touch on 1300 544 755.

Dhanu Eliezer

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