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Selling your products on an online marketplace can be a good source of added revenue and can be as intensive as you want it to be. However, as your selling becomes more frequent and you regularly sell goods for your business, your legal obligations as a trader increase. These vary depending on your situation, but a good way to limit your liability and ensure you are meeting these obligations is to set out your sales terms in a terms and conditions document. This article will go through how selling on an online marketplace works and at what point you should consider having a terms and conditions for your sales.

Selling on an Online Marketplace

Online marketplaces provide a platform where you can sell your goods or services to customers, and they can take a lot of hassle out of this process. Depending on the provider, they will handle online security and payment processes. This can allow you to focus on getting your products to your customers and out into the world. Many businesses will sell on an online marketplace to draw repeat customers to their own online store or website.

You will likely create an account on an online marketplace and create a page to list your goods or services. Customers already using the site can find your store in their searches, or the marketplace may promote your goods to its users. You will likely pay a fee for the services you get from this platform, and you must follow their marketplace terms and conditions. Some marketplaces only allow certain kinds of products on their site, so if you want to target a niche market, this can be useful for your business.

For example, Etsy is an online marketplace for vintage and handmade goods, where you can create a store selling those products. Etsy draws the kinds of customers who buy these goods, so you may not need to do the extra work of finding consumers interested in your niche products.

Purpose of Terms and Conditions

For businesses, terms and conditions set out information about any sales agreements they enter into with customers. It gives your customers important information about the product they are buying, conditions for the sale of that product, and details of what happens if something goes wrong. It covers your liability if something goes wrong and makes it clear to the customer what you expect from them.

For example, if a customer does not fulfil their end or breaches the contract, your terms and conditions would outline that you expect some form of compensation for any loss or damage you experience.

Terms and conditions are known as a “standard form contract”. This means that customers accept these conditions when they purchase these goods from you, without a chance to negotiate them. They can either take it or leave it.

Your terms and conditions document should be clear and easy to read, with visible sub-headings. Terms and conditions will likely include clauses covering:

  • parties to the sale;
  • the sale terms;
  • your pricing and payment;
  • legal disclaimers;
  • delivery matters and costs;
  • liability and risk;
  • returns;
  • dispute resolution and complaints;
  • intellectual property rights;
  • warranties;
  • a privacy policy;
  • applicable law; and
  • your ability to change them as necessary.

Do I Need My Own Terms and Conditions If I Sell on a Marketplace?

If you are a business selling on an online marketplace on top of sales from your own store or website, you will likely already have established terms and conditions. When you agree to sell on such a platform, you agree to the marketplace terms and conditions they set, so ensure your sales terms do not undermine these policies.

If you only sell products occasionally on an online marketplace, and these are private sales, you likely will not need a formal terms and conditions document. However, if your business regularly sells on an online marketplace for a profit, it would be a good idea to have a section on your web page detailing the terms and conditions of your sales. You legally need to tell your customers certain information, especially if you are ‘in trade’ as a professional seller. The online marketplace will also likely imply marketplace terms and conditions that apply to your sales, such as when a bidding customer forms a contract with you. 

You may not necessarily set this out in a formal document, but you should let your customers know how you handle:

  • returns and exchanges;
  • shipping and its related fees;
  • your available payment options; and
  • their complaints.

You should also make sure they have your contact details, such as an email address.

Key Takeaways

If you only occasionally sell on an online marketplace, you likely will not need terms and conditions outlining your sales terms and limiting your liability. However, if you regularly sell goods for your business, it is a good idea to have terms and conditions to protect you if something goes wrong. If you would like more information or help with your terms and conditions when selling online, contact LegalVision’s eCommerce lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

What is an online marketplace?

An online marketplace is a platform where its users can engage in sales transactions. The platform provides a place to list your products and may provide various payment methods as well.

What are terms and conditions?

Your business’ terms and conditions set out the terms of any standard sales agreements with your customers. This a set document, which customers agree to when they buy your products.

Do I need terms and conditions?

If you regularly sell goods and services for a profit, it would be a good idea to have sales terms and conditions. They can limit your liability if something goes wrong and informs your customers about the things they need to know regarding your transaction.

What clauses do terms and conditions have?

The exact clauses of your terms and conditions will depend on what you need. This document should detail things like product pricing and payment, as well as any necessary legal disclaimers.

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