Many people talk about the benefits of online retail. While there are a lot of advantages to online commerce, there are also many commercial benefits to making an online store a physical reality. When people can experience a shop in the flesh, they can become more invested in the brand. This article discusses the five things retailers need to know when taking their store online to offline.

Premises

Online retailers need to find the right business premises for their store. The location will need to suit both the brand and the needs of the business.

When they have found their ideal location, they will need to verify that local planning laws zone it as commercial. Every local council zones areas within their municipality according to permissible uses. For example, an area could be exclusively residential, commercial or permit a mixed use.

If the premises can support retail purposes, the proprietor needs to apply to the local council for development consent. The council will provide information on this process, either online or in person.

If the business owner wishes to make alterations to the premises or do construction work, they will also need to apply for building consent. This process is typically more complicated and takes more time. For example, the council will require plans before they give approval. Once work is complete, the premises will require local government inspection and approval.

The proprietor also needs to decide if they will lease or purchase the premises. Either option will require them to enter into a formal legal document. The leasing legislations of respective states require that the parties complete certain preliminary tasks before they can execute the lease. For example, in NSW a lessor must prepare a draft retail lease before their agent advertises the premises for lease. The agent must also provide a prospective lessee with a Retail Tenancy Guide.  Further, the legislation provides minimum standards for the retail tenancy relationship.

Equipment

Every store requires a certain amount of equipment. The nature and quantity of it required will depend on the type of store. Once a proprietor has ascertained what equipment they need, they will also have to acquire it on the most commercially beneficial terms possible.

A proprietor usually has two options for purchasing equipment. The first option is to purchase the equipment outright. Alternatively, they could enter into an asset financing arrangement. If leasing equipment is the preferred option, a business owner must read their contract closely. They need to know what it requires of them and what rights it gives them.

Licences and Permits

Most businesses require a licence or permit of some kind. Of course, this also applies to online businesses. For example, an online wine retailer still needs a liquor licence. However, when taking an online store offline, a business’ existing licences and permits may be no longer be suitable. Similarly, the business will likely require additional ones.

If an online business already has a licence or permit, the proprietor should verify that it applies in the physical retail environment. For example, bottle stores need a different kind of liquor licence to online retailers. Similarly, the proprietor needs to check if they need any other kind of additional permit or licence. For example, if an online cupcake retailer sets up a physical store and would like to have tables on the footpath, they need a local government permit to do so.

Trading Hours

A physical store might also be affected by state or territory legislation governing trading hours. Whether restrictions apply, and what they are, will depend on where the online retailer locates their store. For example, both the Australian Capital Territory and Northern Territory governments have fully deregulated retail trading hours.

The nature and size of the store will also affect whether restrictions apply because the legislation often exempts particular kinds of stores from restricted trading hours. Online retailers should also be aware that other legislation or another contract might limit their trading hours. For example, licensed premises are subject to restrictions on allowable trading hours.

Employment Matters

Doubtless, an online retailer with existing employees has a knowledge of their legal obligations as an employer. Nonetheless, these might vary and increase as the business moves online to offline.

Every retail store must comply with all appropriate standards concerning occupational health and safety. Similarly, employees must be able to work free from discrimination and harassment.

It is advisable for online retailers to consider what kinds of employment relationships their physical business requires. For example, would casual or permanent staff be more suitable?

If your store comprises a part of the national workplace relations system, you need to be aware of the National Employment Standards (NES). Also, be sure to remember that the NES affects casual staff differently to ongoing staff.

As an employer, you will need to pay your employees their correct entitlements, including penalty rates if appropriate. Also, you must make all necessary superannuation contributions and withhold the appropriate amounts of income tax.

***

LegalVision has provided many businesses with tailored online legal advice.  If you are considering transitioning your store from online to offline and have any further questions, call LegalVision today on 1300 544 755 or fill out the form on this page.

Carole Hemingway

Next Steps

If you would like further information on any of the topics mentioned in this article, please get in touch using the form on this page.