Question

1. Research starting an online business selling goods. What are at least 5 things you need to make sure you understand before selling your first item online to be compliant with regulations? Explain each one of these and why they are important; including examples/scenarios.

Answer 1

1. Age restrictions.

Anytime you launch a website, it’s absolutely required that it comply with the Children’s Online Privacy Protection Act (COPPA) — no exceptions.

This act includes quite a few regulations, but the one that will likely apply to your site is the inability to collect any personal information from a child under the age of 13.

If you’re planning on selling a product or service tailored specifically to a young audience, you’ll need to abide by COPPA regulations.

As far as age verification requirements for ecommerce stores selling age-restricted items, you should look into your country’s specific codes.

For instance, sites selling items like vapes or alcohol need to have age verification tools before checkout in order to be legally sold.

Every country is different as far as their demands on how to run a business, and things get especially tricky when it comes to age restrictions on products.

Do your research and stay on top of legislation to ensure your business is on the up-and-up.

2. PCI compliance.

PCI compliance is a necessary protection for online sellers, and nearly all SaaS ecommerce platforms have it baked in to some degree.

Online businesses tend to be prime targets for data theft, which is why ecommerce providers take it so seriously — and why you should too.

Educating your business on PCI compliance is the first step to making sure you’re protected.

Being PCI compliant doesn’t just mean providing a secure, encrypted checkout experience — you’ll also need to avoid storing any purchasing information on paper or via recording (e.g., if someone were to give you their card number over the phone).

3. What you didn’t know you needed to know.

There are also individual platform requirements that you may need to be aware of before starting your business.

For instance, when you download Facebook Messenger (which you can now use to transfer payments!), you are agreeing to have Facebook listen to you and serve ads based on what you say.

Being transparent with your business and your customers will eliminate the chance of any upsetting legal conflicts or lost business.

Trust is something that is earned with your customers, so take the initiative to be well informed and protect your brand by building an online store that meets all legal requirements.

4. Trademarks, patents, and copyrights.

There tends to be some common misconceptions about what these words actually mean, with must-know laws and regulations around each one.

You’ll want to be sure to have a clear understanding of each to prevent any unwanted legal complications.

The United States Patent and Trademark Office defines them as the following:

• Trademark: A word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others.
• Patent: A limited duration property right relating to an invention, granted by the United States Patent and Trademark Office in exchange for public disclosure of the invention.
• Copyright: Protects works of authorship, such as writings, music, and works of art that have been tangibly expressed.

Depending on what product you plan to sell, you may or may not want to apply for one of these.

Doing so isn’t strictly necessary, but you should at least check to make sure you’re not infringing on other patents or trademarks with your products or business.

For instance, if you want to sell t-shirts with Star Wars characters on them, you’re going to run into trouble.

Simply make sure to research with the appropriate copyright, patent, and trademark organization. They’ll help you start off on the right foot.

5. Shipping restrictions.

Earlier we talked about how your product will impact shipping costs and options, but at this stage in your small business, it’s time to address shipping restrictions.

Spoiler alert: Not all shippers restrict the same items, so you should have options — just do a little research to see if there’s a provider that will take on your product.

Most shipping companies clearly note their restricted items. Typically, restrictions are placed on items like:

• Aerosols
• Air bags
• Alcoholic beverages
• Ammunition
• Animals
• Cigarettes
• Dry ice
• Explosives
• Fresh fruits and vegetables
• Hazardous materials
• Nail polish
• Perfumes
• Perishables
• Poison

Also note that some providers may allow you to ship usually restricted items but will require some extra paperwork and fees. You’ll want to take this into consideration as you evaluate providers.

For information on shipping internationally, check out the Federal Trade Commission’s Electronic Commerce: Selling Internationally guide, which will help answer questions about taxes, duties, and customs laws.