Starting An Ecommerce Store: Your Logistics and Legalities
Welcome to part two of my guide to setting up your own ecommerce store. Last week, we looked at preparing your products and packaging for selling online, including getting your items photographed and preparing good product descriptions for them. This week we’re moving onto part two: your logistics and legalities. Now, I’m just going to throw in a disclaimer right away here: I’m not a lawyer, and this article is not a replacement for professional legal advice. Think of this more as a checklist of points to consider and research.
Part Two: Your Logistics and Legalities
We touched on some of the following points last week, when discussing things like managing your product inventory and choosing your packaging, but now it’s time to get into the nitty-gritty details of your business setup. Starting with…
05. Registering Your Business Name
I’m presuming by now you’ve chosen a name for your business, even if you haven’t yet gotten round to making it legal. And if you somehow managed to make it all the way through Part One without fixing on a name, then first of all, congratulations on your ultra-minimalist packaging! And secondly, dude. You’re overthinking this. Keep it short, easy to pronounce, and vaguely descriptive if possible. Done.
If that attitude seems a little glib (hey, these businesses are like our children, and we spend ages thinking up names for them!) it’s because I’ve seen good friends shy away from launching their own businesses, over silly little things like this. A name is important, sure, but launching your business under an “ok” name is definitely better than never launching it at all.
Literally drawing a blank? Then just get a sheet of paper, and run through Vistaprint’s list of name ideas. Write down everything you can think of, and let family and friends vote on the shortlist. You will still be done by the end of the day.
And now it’s time to make that name official! The procedure for this is going to be different for every country, except the very start, which involves all of us heading over to Google to find out what we need to do. For example, as a service provider here in Germany, the answer was “nothing” – I had to register with the tax office as a freelancer, and then later on as my income cleared a certain floor, I had to register for VAT, but on the name front, I don’t need to do anything, as I’m “trading” under my own name.
Although there would be nothing to stop another Emma Englishby setting up shop under the same business name, I’m taking my chances that luckily my name is unusual enough for that not to happen.
But you may need to take extra steps to protect your brand and business from infringement. I do not pretend to be an expert in the world of trademarks and corporate identities, but this article from Entrepreneur gives a good overview of the options available to you if you happen to be based in the US.
In general though I recommend that you start with your local chamber of commerce, and ask their advice. If you’re in Germany, that chamber of commerce is known as the IHK and they have kindly produced this helpful English language guide to starting a business in Berlin, which gives a good overview of the different ways you can set up your company and the advantages and disadvantages of each.
06. Registering a business address
One piece of information you’re definitely going to need when you register your business is an address. This can be a home address if you wish, but if you’re privacy conscious and opposed to sharing your home address all over the internet, then renting a P.O. box, or even an office or co-working space that will allow you to have mail delivered, would be your best bet.
I have had several clients in the past who have been surprised out to find out that this is not just a recommendation, but that they are actually obliged to share their address online. Here in Germany for example, all of us online retailers and service providers (basically, anyone with a website that does any kind of business) have to have a page called an Impressum, which lists, among other things, the full name and address of the website owner.
(And if you’re a store owner, there’s even more requirements about providing a very clear address for returns, and your Terms & Conditions for refunds, along with everything else – there’s even rules about how your checkout and cart pages should look!)
Even if you don't have such requirements in your country, there’s still several reasons why you may want to provide an address voluntarily. For starters, if you sell physical goods, customers are always reassured by the sight of a physical address on your website, so first-time visitors will automatically be more likely to purchase from you.
Another point is that several online marketing tools either require, or are enhanced by, having a publicly available business address. If you’re sending out email newsletters, most email providers require you to provide your contact information in the footer – and yes, that includes an address.
Or if you want to boost your local SEO – let’s say that like me, you want to make sure that English speaking clients in Berlin are able to find you – then it makes sense to tell Google your address, boosting your ranking for local search results. Of course, Google will add that address to Maps, meaning anyone could access it, so you can see now why you may not want to use your home address for this.
07. Buying a domain name
This is one of those things that I think everyone presumes is something technically demanding and difficult – until they try to do it, and realise it is as simple as purchasing almost any other product online.
Sure, configuring it once you’ve bought it may be a little daunting, and that’s why people like us web designers exist! But that’s always something you can decide on at a later stage. The main thing to do is to head over to a well-known, widely trusted domain name provider like NameCheap (that’s just my personal recommendation, there are others) and register your domain – before someone else does!
This is one of those common misconceptions I’ve come across time and time again – just because you’ve registered your business name locally, does not mean it will be available as a domain name. Anyone can purchase just about any domain name if it has not already been purchased – if cocacola.com were available for example, there would be nothing stopping me from registering it myself (and then selling it on at a very large markup to Coca Cola!)
So what do you do if you’ve already missed the boat and yourstorename.com is already gone? Well, you’re left with either trying to reach out to the current owners of yourstorename.com, to see if they’d consider selling it on to you, but be warned – much like the ticket touting guys outside gigs that everyone loves to hate, there are totally people out there who make a business buying up desirable domain names, and selling them on at vastly inflated prices.
This leaves you with either buying the same name, but with a different extension: yourstorename.ie for example, or .co.uk; or trying out different spellings for your domain: your-store-name.com for example, or yourstorenamepluslocation.com.
Some of you may notice I haven’t mentioned hosting for your website yet, just the domain name. That’s actually intentional, as depending on how you decide to build your website, you may not need to purchase hosting at all. For example, if you’re building your store on Shopify, then your website and hosting are both managed with their system.
You will however, definitely need a domain name regardless of how you’re building your site (and now that you’ve completed step six and have actually chosen and registered your business name, this shouldn’t be a challenge!)
08. Figure out your tax & shipping rates
I know, I know – some of you are probably rolling your eyes at the obviousness of what I’m suggesting here. And yet I would say for every ten store owners I work with, about eight of them have not even considered this point by the time we start talking. Which means when I ask how we’ll be configuring their taxes and shipping on their website, the answer is a big old “dunno”.
Taxes, at the very least, are usually pretty easy to figure out – you should already be in touch with your local chamber of commerce at this stage, so you can go ahead and ask them if Google can’t give you a plain answer (or if you do not relish the idea of Google being your source for important, legally binding information like that!)
Shipping is what gets people every time – you’re going to want to reach out, not just to one courier company, but likely several, to get an idea of their rates and turnaround times, so you can make the best choice for your business. (That’s DHL in Germany, although I admit a personal vendetta against Hermes on account of them being too lazy to ring my doorbell when they have packages for me, and instead leaving them nowhere near my flat. But I digress.)
While you’re doing research on shipping options, don’t forget to ask them about their options for integrating with website platforms. I’m not saying this should be the only criteria that informs your decision for a particular courier company, but it is something to consider.
Calculating shipping manually for all your products is at best, pretty time consuming, and at worst, woefully inaccurate. So having the option to set up what we call “carrier calculated shipping” (i.e. where your website is integrated with a particular shipping provider, so that rates can be calculated automatically based on your customer’s order) is definitely an advantage.
Finally, don’t forget about how this ties in with your inventory management! Is a daily run to the post office going to part of your routine, or can you arrange to have items picked up from you? Or, if you’re renting storage space somewhere for your products, does the facility offer fulfillment (i.e. they’ll take care of packing and shipping your products for you!) as well?
Whatever you decide, make sure you’re clear on the costs of doing business, before you start doing business.
You might find that once you’ve added up the costs of inventory management, packaging, and shipping, (plus the taxes you’ll be required to pay eventually!) that your profit margins are nowhere near as high as they first appeared – or worse, that you’re actually making a loss.
I hope you’ve found this post helpful, and that you’re not feeling too overwhelmed with points to research and consider! Legalities and logistics are never the most exciting parts of a business to consider, but the sooner you deal with them, the better. Getting all of this out of the way early will not only give you a better understanding of how to run your business once you open the doors to your online store, but will also inform things like your product prices, how to build your website, and even your marketing activities.
That last point is something we’ll go into in more detail next week when I share the third and final post in this series: Branding and Beyond.