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Due to COVID-19, many small businesses have shifted their operations to online channels to source new revenue. If you do it right, adding e-commerce into your business model can be a smart decision. This is especially if you can keep down costs while doing so.

However, creating an online presence is often not just as simple as setting up a website. The process will vary depending on just how much you want to do online. This article will explain how you can implement an e-commerce solution for your small business, and what legal aspects you need to consider when you do so.

What Are You Doing Online?

The first thing you need to consider is what you are doing online with your business and what you want to achieve with establishing an online presence. This presence can range from setting up a Facebook page for your business to creating your own functioning website where customers pay for orders. The key is to tailor your e-commerce solution to your needs and technical experience. What business activities you carry out online will determine what legal considerations you need to take into account. Such e-commerce activities could include:

  • providing a place where customers can see your products;
  • allowing customers to choose which products they want with a shopping cart function;
  • processing customer payments online; and
  • facilitating shipping products to customers.

For example, if you just want to market your business and bring more customers to your physical store, setting up an Instagram account may be enough. But if you want to process customer orders online, you may need a more involved online presence.

Establishing Your Online Presence

Once you have figured out what you want to do online, you need to look into how you will do so. If you want to process customer orders and sell your products online without customers needing to come into your store, you have three options:

  • creating your own bespoke website;
  • operating for a third party marketplace, like TradeMe or Amazon; or
  • using a customisable e-commerce solution, like Shopify or Big Cartel.

If you have the technical knowledge, setting up your own website may be a good choice. Customisable e-commerce platforms can make going online with your business more efficient and accessible. Just be aware that both online marketplaces and e-commerce platforms will have their own terms and conditions that you will need to comply with. 

Regardless of which way you decide to establish your business’s online presence, these are all things to consider when you shift your business online:

  • ensure that the payment processing system you use is secure;
  • check that sensitive customer data is encrypted;
  • invest in your SEO;
  • discern the best way to direct traffic to your site; 
  • double-check website security;
  • keep your website or web-page up to date; and
  • consider how you will use social media.

Important Legal Documents

Whether setting up your own website or using an e-commerce platform for your online store, you should include three essential legal documents in your plan. These are:

Terms and Conditions

Your terms and conditions are essentially the terms of the contract you set up with your customers whenever they enter into a transaction with your business. To make sure they accept the terms of your agreement, as a part of the transaction process, make it a step to scroll through your terms and conditions and tick a box with “I Agree” at the end.

Website Terms of Use

Your website terms of use policy applies to anyone that visits your website, which regulates how they can use your website. For example, you would outline your policy around appropriate commenting on listings on your website.

Privacy Policy

You will already have privacy requirements for your physical business. By the nature of the kind of transactions customers will enter into online, you will deal with a lot more of their personal information, so you need to take appropriate steps to protect it. Customers have a right to know how you are handling their personal data.

Regulations and Operating Online

You still have to follow the same laws online as you do with your physical business, but the way you do so will sometimes be different. There are also laws that are specific to operating online that you need to know. These include:

  • email marketing laws: if you want to use email for marketing purposes, it is good practice to make sure customers agree to this, usually with an opt-in button at the end of their purchase;
  • consumer protection laws: you still have to uphold your consumer guarantees and fair trading obligations. Online, this means that your products have to match the pictures you give and you do not mislead customers; and
  • overseas laws: if you sell to international customers, look into other countries’ laws that could apply to you. Some overseas areas, like the EU, have data regulation laws that apply to overseas business and how they interact with customers.

Key Takeaways

Setting up an e-commerce channel for your business can be a smart decision if you do it right. Just make sure you develop a good plan for operating online. This includes complying with legal obligations to your customers and complying with any other laws that relate to conducting business online. If you would like more information or assistance with implementing an e-commerce solution for your business, contact LegalVision’s New Zealand e-commerce and online business lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is e-commerce?

E-commerce (short for electric commerce) refers to the kind of business where people buy and sell things online. If you are a small business, this could mean selling your products online or starting a small online consulting business.

Which e-commerce solution is best for small businesses?

Do your research on the available e-commerce solutions and platforms to see which one would suit your small business. Whichever one you choose, read through its terms of use and make sure it uses a secure payment method.

How do I start an e-commerce business?

Many core aspects of setting up an e-commerce business are similar to setting up a physical one. You still need a solid business model, and a product or service to sell. But, instead of finding physical premises to operate from, you find a web domain or e-commerce platform.

What does SEO stand for?

SEO stands for “Search Engine Optimisation.” This refers to the practice of drawing and increasing traffic to your website or webpage through organic search engine results. This is crucial for anyone online business, so make sure to invest time in making it work for you.

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