{"id":799,"date":"2021-08-10T16:46:07","date_gmt":"2021-08-10T21:46:07","guid":{"rendered":"https:\/\/adamrichardlaw.com\/?p=799"},"modified":"2021-08-10T16:50:55","modified_gmt":"2021-08-10T21:50:55","slug":"how-to-start-an-e-commerce-business","status":"publish","type":"post","link":"https:\/\/adamrichardlaw.com\/how-to-start-an-e-commerce-business\/","title":{"rendered":"How to Start an E-Commerce Business"},"content":{"rendered":"\n<p>If you have ever considered starting an e-commerce business, now is a great time to move from ideation to action. Online retail sales exploded to an all-time high amid COVID-19 lockdowns, travel bans, and brick-and-mortar closures, and this was not just a temporary bump. E-commerce was already experiencing strong year-over-year growth prior to 2020. The accelerated shift to online purchases is part of a broader trend. For many shoppers, purchasing both essential and nonessential items online is the new normal.<\/p>\n\n\n\n<p>Not surprisingly, as online retail has become more popular, it is becoming more competitive. The growth of e-commerce has also created a more demanding legal and regulatory environment. While anyone can set up an e-commerce website, running a successful e-commerce business is more complicated. In addition to delivering an excellent customer experience, online retail entrepreneurs must pay special attention to legal issues regarding taxes, privacy, terms of service, and digital marketing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Getting Started with an Online Retail Store<\/strong><\/h2>\n\n\n\n<p>Starting an e-commerce business is not wholly different from starting a brick-and-mortar business. Whether your store is online or has a physical location, you will need to address the following basic issues before you are ready to get up and running:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Choose&nbsp;an entity type<\/strong>.&nbsp;Every business must have a&nbsp;<a href=\"https:\/\/www.sba.gov\/business-guide\/launch-your-business\/choose-business-structure\">business structure<\/a>, such as a sole proprietorship, partnership, limited liability company (LLC), or corporation. Different structures&nbsp;provide&nbsp;different mixes of legal protections, benefits, and drawbacks.&nbsp;<\/li><li><strong>Get tax&nbsp;identification numbers.<\/strong>&nbsp;Following the creation of your entity, you will need to obtain a federal&nbsp;Taxpayer Identification&nbsp;Number (TIN). This is&nbsp;necessary for all entity types&nbsp;unless your business is a sole proprietorship, in which case your personal Social Security number may serve as the TIN (although this is not advisable).&nbsp;You may also need to obtain a state tax&nbsp;identification&nbsp;number. This&nbsp;number&nbsp;is used&nbsp;when paying taxes, hiring employees, opening a bank account, and applying for licenses and permits.&nbsp;<\/li><li><strong>Open a business bank account.<\/strong>&nbsp;Having a dedicated bank account for business transactions is legally required if you own a limited liability company or a corporation. Even if it&nbsp;is not required for your specific business, however,&nbsp;it is advisable&nbsp;to avoid&nbsp;commingling&nbsp;your personal and business funds in a personal bank account.&nbsp;<\/li><li><strong>Obtain business insurance.<\/strong>&nbsp;You insure what&nbsp;is most important to you\u2014your home, your vehicle, your health, and your business\u2014to minimize risks. Online stores have different insurance needs than traditional retail stores. Choose from a range of e-commerce insurance coverage options&nbsp;that make sense for your company<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Specific Considerations for E-commerce Stores<\/strong><\/h2>\n\n\n\n<p>Despite some overlap in how they are organized and operated, there are some significant differences between online and in-person stores. These differences require special attention to avoid legal issues that can threaten your business\u2019s success.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Comply with&nbsp;state tax laws.<\/strong>&nbsp;A 2018 ruling by the US Supreme Court<a href=\"applewebdata:\/\/8F556FA6-F21E-444B-83A8-1BFB0366462C#_ftn1\"><sup>[1]<\/sup><\/a>&nbsp;established that individual states can require&nbsp;e-commerce businesses to collect and pay sales tax. Generally, an online retailer must&nbsp;collect state sales taxes&nbsp;if they have an \u201ceconomic nexus\u201d in that state. And if your business has remote employees&nbsp;who&nbsp;work in a state other than where the business physically operates, you may have to withhold state income taxes for those workers and obey local labor laws.&nbsp;<\/li><li><strong>Navigate&nbsp;privacy law issues.<\/strong>&nbsp;E-commerce stores have access to large amounts of customer information. They not only track customers\u2019 online activity and collect large amounts of user data but also store sensitive financial information such as credit card numbers and addresses. California has taken the lead in protecting consumers online with the California Consumer Privacy Act (CCPA). Colorado and Virginia have followed suit, and more states are expected to adopt similar statutes. These new state-level privacy laws&nbsp;require that online sellers have a&nbsp;privacy policy&nbsp;in place, among other&nbsp;consumer protections. For buyers in other states, sellers may consider enacting voluntary privacy policies.&nbsp;<\/li><li><strong>Create&nbsp;terms of service.&nbsp;<\/strong>A terms of service agreement<strong>&nbsp;<\/strong>is a contract between you and your website users. Although not legally required,&nbsp;it&nbsp;can give you greater control over your website, set clear expectations for users, and protect you in the event of a legal dispute.&nbsp;An&nbsp;e-commerce terms of service agreement typically includes language&nbsp;addressing&nbsp;account terms, prohibited uses and actions, payments, refunds and returns, limitation of liability, and dispute resolution.&nbsp;<\/li><li><strong>Safeguard intellectual property.<\/strong>&nbsp;It&nbsp;is essential for&nbsp;e-commerce businesses to take stock of their intellectual&nbsp;property&nbsp;and protect&nbsp;it&nbsp;from unauthorized use by other parties. Your unique business name, domain name, logo, and product names can be registered as trademarks. Use copyrights to protect your creative content, such as written material, graphics, and video. Other&nbsp;important&nbsp;practices include closely guarding trade secrets and using nondisclosure agreements.&nbsp;<\/li><li><strong>Prevent&nbsp;spam.<\/strong>&nbsp;Nobody likes receiving&nbsp;unwanted marketing emails. Under the&nbsp;Controlling the Assault of Non-Solicited Pornography And Marketing&nbsp;(CAN-SPAM) Act, senders of commercial messages must&nbsp;meet&nbsp;certain requirements. Emails must also contain an unsubscribe link that senders are required to honor within ten business days. Failure to&nbsp;comply with CAN-SPAM&nbsp;can result in significant fines.&nbsp;<\/li><\/ul>\n\n\n\n<p>These considerations require strategic planning and continued monitoring. Skipping or overlooking a step could result in fines or unanticipated consequences.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Next Steps<\/strong><\/h2>\n\n\n\n<p>If you are ready to start your e-commerce business and would like guidance to ensure that you legally comply with the relevant regulations and protect your rights, schedule a meeting with a member of our team. We will help you develop a comprehensive strategy to protect you and your business.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><a href=\"applewebdata:\/\/8F556FA6-F21E-444B-83A8-1BFB0366462C#_ftnref1\"><sup>[1]<\/sup><\/a>&nbsp;<em>See South Dakota v. Wayfair, Inc.,<\/em>&nbsp;585 U.S. __ (2018).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you have ever considered starting an e-commerce business, now is a great time to move from ideation to action. Online retail sales exploded to an all-time high amid COVID-19 lockdowns, travel bans, and brick-and-mortar closures, and this was not just a temporary bump. E-commerce was already experiencing strong year-over-year growth prior to 2020. The [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[24],"tags":[19,16,18,20,21,23,22],"class_list":["post-799","post","type-post","status-publish","format-standard","hentry","category-small-business","tag-black-business","tag-e-commerce","tag-entrepreneur","tag-how-to-start-a-business","tag-how-to-start-e-commerce-business","tag-online-business","tag-online-store","post-wrapper","thrv_wrapper"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/posts\/799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/comments?post=799"}],"version-history":[{"count":3,"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/posts\/799\/revisions"}],"predecessor-version":[{"id":804,"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/posts\/799\/revisions\/804"}],"wp:attachment":[{"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/media?parent=799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/categories?post=799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adamrichardlaw.com\/wp-json\/wp\/v2\/tags?post=799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}