Top Five Things Every E-Commerce Entrepreneur Needs To Know

Thinking of starting an online business or launching your own brand as an influencer? Before you dive into the deep end, make sure you are setting yourself up for success in the world of e-commerce. Below, e-commerce attorney Raees Mohamed explains: The Top-Five Things Every E-Commerce Entrepreneur Needs to Know.

1. Create Proper Terms of Service and Privacy Policy for Website

You can’t copy the Terms of Service or other policies from another site. That’s called copyright infringement, and is considered intellectual property theft. Nor is it smart to use a privacy policy template or terms of service template. You need your own terms and policies drafted that are specific to your company or brand. These help keep your business stay protected by creating a contract between your users and your company. Proper Terms of Service will address how disputes are addressed, intellectual property rights, and refunds or termination, among many other issues, all of which are extremely important.  

2. Own All Of Your Creative Works – In Writing  

Avoid intellectual property issues by ensuring that you own the creatives you post on social media and the content hosted on your website. This also goes for the content that third party vendors post on your behalf. If you hire a social media agency, you must ensure that what they post is content that you own, or your business could be at risk for copyright infringement disputes. If you hire a photographer or copywriters, you need to make sure you engage them in writing and properly assign the intellectual property to your company to maintain full control of your intellectual property rights on all social media platforms and to avoid intellectual property theft. Obtaining intellectual property protection is key to avoiding superfluous lawsuits. 

3. Address False & Defamatory Reviews 

If someone posted a fake false review about your business online, you can sue for defamation and you may be able to get the review taken down. Defamatory speech is always illegal, but don’t wait too long to take action in situations like these because there is a Statute of Limitations for defamation claims, and it can be as short as one-year for defamation. To learn about what the Statute of limitations is for you state, see our chart here.

4. Be Mindful of FTC Guidelines & Dot Com Disclosures When Marketing

Avoid FTC investigations and fines by ensuring all of your advertising efforts adhere to the FTC guidelines. This includes influencer marketing. If the influencer you hire forgets to disclose a material connection or sponsorship (ex. #ad, #sponsored #___partner, etc.), you AND the influencer can be hit with an FTC fine which is why you need to ensure you influencers are familiar with the FTC guidelines for influencers. If you are marketing supplements online, it is also important to adhere to the FDA regulations relating to all health claims being made in your marketing materials and labeling. For more information on supplement marketing, click here. It’s easy for marketing agencies to over-sell a product in order to drive web traffic to your page, but by running afoul FTC and FDA disclosures.  

5. Set Up The Proper Legal Entity For Your Online Business 

You shouldn’t do business as a sole proprietor, ever. There are multiple legal entity types to choose from so every e-commerce platform and campaign should be owned by an entity- not an individual. Whether that be an LLC or a corporation, it’s important to speak with an attorney well-versed in e-commerce law to help you decide which legal entity is the best fit for your online business. This will protect both you and your business if any legal issues should arise.

To learn more about e-commerce legalities for your online business, and other e-commerce hacks, check out our guide here.

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