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Online Business Laws for E-Commerce Sites

Online Business Laws for E-Commerce Sites

One the most popular forms of online businesses is that of an e-commerce site. Regardless of whether you’re supplying niche products or specializing such as offering bookings for G license classes near me, you need to be sure that you’re fully aware of the restrictions and regulations in place when planning your business from a legal standpoint.


There will be some e-commerce platforms that operate solely in the US, while others may offer a global service. The way that taxes are displayed can vary depending on the demographic you’re marketing towards

Customers is the US will be used to seeing price that exclude taxes, however Australian customers will be used to seeing an all-inclusive price. There is no right or wrong way of displaying the prices, but you need to consider where your customers will be coming from, to ensure that they’re met with a pricing structure that they understand.

There are other factors that need to be looked at when running an e-commerce store in relation to taxes that are state-specific, so research is key. An example of these taxes are as follows:

  • Any plastic bottles sold within California will incur a $0.11 recycling fee in addition to any other relevant taxes.
  • Those looking to sell clothing within New York will be taxed within the state.

Although these are only slight differences, not being aware of these regulations could have ramifications later on, so research is vital before launching the business.

Payment Gateways

When customers are purchasing products online, clarity is key. The last thing customers want to experience is a misunderstanding, especially when it comes to how payments are processed.

As well as ensuring that the personal details of the customer are protected when placing an order, an e’-commerce store also needs to ensure that the payment gateway being used isn’t going to be intercepted by unsavory third-parties.

Fortunately, there are a series of payment gateways available, albeit with their rules and regulations in place.

  • PayPal
  • Square
  • WorldPay
  • FirstData
  • Stripe

On the surface, the providers offer a similar service, but business owners need to ensure that they’re only using the solution that benefits the business and its customers.

Understand the Difference Between Trademarks, Patents and Copyrights

Those starting a business for the first time will probably hear about trademarks, patents and copyrights and assume them to be one in the same, but there are some differences you need to be aware of.

  • Trademark: A trademark will be a word, phrase, symbol or design that represents and distinguishes the source of goods of one party from those of others.
  • Patent: A property right that relates to an invention. Patents are granted by the United States Patent and Trademark Office in exchange for public disclosure of the invention.
  • Copyright: Generally used to protect creative works such as art, writings, music, media and photography.

Although obtaining a patent, trademark or copyright may not be relevant to your business model, it’s certainly worthwhile double-checking before launching your e-commerce store.

Shipping Restrictions

Those who run an e-commerce store will often have to use a shipping provider, depending on where the goods are being sent to.

Just like payment gateways offer different solution, so do shipping companies. As such, you should carry out some research as to whether the shipping company you’re planning to use has any restrictions placed on the items you’re looking to sell. Some of the more conventional restrictions are as follows:

  • Aerosols
  • Animals
  • Ammunition
  • Alcoholic Beverages
  • Nail Polish
  • Perfume
  • Poison
  • Explosives
  • Cigarettes
  • Perishables

There can be instances where a shipping company will be able to shop restricted items, albeit with paperwork and an additional fee.

How Inventory Will Be Stored

When running an e-commerce store, there will be different ways of how you supply goods to your customers. Some may be choosing a dropship option, which is when a product is sold on behalf of another company, or you may be holding inventory.

If you plan to store inventory at home during the initial period, then you need to ensure that your lease allows for it.

How the Website Will Use Customer Information?

When launching a website, the owner needs to ensure that its safeguarded and using customer information in the right way. There may also be requirements to ensure that there is an age-verification in place to ensure that the right product is being sold to the right people.

It’s also important to ensure that the website complies with the Children Online Privacy Protection Act (COPPA.) There are several regulations to consider in relation dealing with young online users, but the most important is the restriction that a company from collecting personal data.

If your business has a young audience, then it’s vital that business owners brush up on the COPPA act before launching their website, otherwise they could find that there are ramifications.

Ensuring the Website is PCI DSS Compliant

Being PCI DSS compliant can be the most important aspect of any e-commerce store. PCI DSS is an abbreviation for Payment Card Industry Data Security Standard and is relevant to any company that stores or transmit credit card data to maintain an environment that’s secure.

Even companies that accept orders over the telephone need to ensure that they’re conforming to the guidelines put in place.

Again, those who are unsure of whether their business offers sufficient security protocols when processing information need to review their current structure as soon as possible.


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