Top 5 Things To Get Right When Selling Online
Or you could be quickly out of business ...
POSTED BY JONATHAN VOWLES ON 28/02/2017 @ 8:00AM
In 2016, £1 out of every £4 spent on non-food items was spent online; e-commerce is big and its getting bigger! This means that it is vitally important for every business to understand how to do it ...
If you're selling online you've got to get it right or you'll be quickly out of business!
copyright: neirfy / 123rf stock photo (licensee)
But when you're selling online, you've got to do it right. There are many traps you can fall into and you don't want to get caught out by doing something wrong.
Here's our useful guide to selling online:
Mobile is where it is going
If you haven't sorted your website, so it works properly on every size device then you are already losing business. You should have done this years ago when Google changed their algorithms.
If a week is a long time in politics then it is an even longer time online! If you are not cutting edge with your technology and design then stop shooting yourself in the foot and update. In fact, you probably need to update your website every year anyway.
Shopify, E-Bay, Amazon, your own website, Facebook, Twitter, etc, they all need to integrate and present a coherent picture of your business. It also means that your Facebook and other advertising will drive traffic to the right place. That integration will drive sales, and if it is all integrated then you will have a single stock list to control, making it easier to automatically sell 24/7.
Get the VAT right
Most businesses understand the basics of VAT as you charge it when you sell stuff. But if you are selling stuff online then you need to understand about European VAT and about VAT MOSS. MOSS stands for 'Mini One Stop Shop' and is a special way of working out the VAT you charge and pay over to the VAT man when you sell online into Europe.
Why do online sellers need a special VAT scheme? Because if you sell stuff online then you potentially need to register for VAT in every European country you do business with! And forget about having to meet a sales threshold before you are liable to register, there isn't one; if you make as much as a £1 sale (or 1 Euro) then you have to account for foreign VAT! All this might change after Brexit, but as that is still years away, you will need to deal with this now.
Either you can fix your online sales so that you never sell anything to anyone outside the UK, which limits your business considerably or you have to deal with European VAT rules. And, of course, as with any tax legislation, there are criteria that apply to the VAT MOSS scheme.
One of the things to check out is the online sales platform that you use. Some online platforms do all this for you! It all comes down to whether the platform is acting as the principal in the sale or the agent. For this, you need to look at the small print of your relationship with the online platform.
Distance selling regulations
Do you understand them? Some people have never heard of them! The distance selling regulations apply to online shopping, telephone shopping and mail-order shopping, i.e. anyone who sells at a distance rather than face-to-face.
The rules can be summarised as: give pre-contract information, give confirmation of the pre-contract information, tell them about their right to cancel, make any refunds within 30 days and make sure you deliver the goods within 30 days. That doesn't seem like bad news, but it can be. For example, by law, you have to give a cooling off period, unless of course, you don't! Or, you have to pay for return delivery of cancelled or returned goods, unless, of course, you don't! But there are rules that say when you do or don't have to do these things.
Cybersecurity and data protection
Every business needs to be on top of this, if you use computers in your business, then cybersecurity and data protection need to be top of the things to get right. But if you are an e-commerce business then it is right up there on your worry-about-it-list for two simple reasons.
Firstly, getting it wrong leads you to penalties under the data protection rules. You can be fined up to 100% of your turnover - not profit - but turnover! That is a whoppingly big way to be put out of business quickly if you get it wrong.
Secondly, if you don't have strong cybersecurity then the criminals can put you out of business. Don't think they are targeting you? Well, think again! Smaller businesses are easier to target as they have fewer defences and big business have the systems to know they are getting thousands of attacks every day.
So selling online can be a complete minefield. Would you like more information about getting it right? Call me on 01234 752 566 and ask for our Beginners Guide about the Distance Selling Regulations or request further information about VAT MOSS.
Maybe you'd like to set up a meeting to see how JVCA can help you to get your e-commerce right? Click here to send me an email enquiry and I'll be in touch soon.
Until next time ...
If you're looking for a new accountant to help grow your business, do visit www.jvca.co.uk and discover how Jonathan Vowles Chartered Accountants can help you!
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.