What are the requirements to create an online store? and why you should consider these requirements before setting up your Ecommerce website in the Caribbean. What legal and not necessarily legal steps do I have to follow to be able to sell products online? And so among other questions that we will answer in this article.
If this is one of the questions that hangs over your head, it is because you are in the process of creating an ecommerce or because you are considering bringing your existing physical store to the online world.
In this post I am going to explain the 3 essential requirements that every entrepreneur must take into account before setting up an online store
Requirements to consider before setting up your Ecommerce website in the Caribbean
Probably, and more in the face of the state, this is the most important requirement that you must meet.
Your store has to be in accordance with the Laws that exist at the moment and you need to adapt to them if in the period of your commercial activity the laws change.
Right now the legal requirements for an online store and naming them broadly would be the following:
Decide your legal form
Perhaps the most logical point of all, but in order to have an online store as well as to be able to create any company or small business, you must be registered with the Treasury and Social Security.
You have to decide any of the possible options such as being autonomous or creating a society, a cooperative, etc., depending on your needs.
This requirement is better to consult with a tax advisor, he can advise you on the best option depending on your situation.
GDPR data protection
The Data Protection Law and the most recent of them, the RGPD or General Data Protection Regulation that entered into force in May 2018 at the European level, obliges all companies and the self-employed to comply with it.
This law obliges all businesses, regardless of size, to have greater privacy and protection of customer data, as well as transparency on the part of companies when processing such data.
In order to know what steps you have to follow and what points you have to fulfill, the best option is to hire an expert lawyer in RGPD and follow the list of regulatory compliance that the AEPD has on its website.
Purchase conditions and guarantees
As an online seller you have the obligation by law to inform your customers of certain information about the sale.
These data must be unequivocally reported on your website and are:
- Payment and shipping term: If the delivery period is not indicated on the website, it must be delivered within a maximum period of 30 days from the day the contract was made.
- Card purchase: If the customer makes the payment by card, since it is not a face-to-face process, the customer can claim the payment and it must be returned by the company immediately. If it is shown that the customer is really the one who made the payment, he will have the legal obligation to compensate the company if it is the case.
Perhaps the profit margin is not one of the first points that comes to mind when you are making your list of things necessary to sell online. But it is.
Sometimes we get overwhelmed with the whole legal issue, but before doing anything, we should take into account what our profit margin will be in our online store and study its feasibility.
Actually an ecommerce does not have the same expenses as a physical store, but this does not mean that it does not have any expenses.
The Gross Profit will be all the income that the company will give us for each product that we sell. But this benefit is not going to be our final benefit. This will be influenced by external costs, which we will see in the next point.
Costs to consider in an Ecommerce Website
Selling products online with a traditional e-commerce model (in which the stock of products is stored and handled by your company) always has associated a series of costs of which we highlight:
- Commissions on payment gateways: PayPal 3.4%, virtual POS 0.8% approx, etc.
- Advertising expenses
- Shipping and returns
- Storage expenses
- Expenses in order preparation time
- Customer Support
Although it is true that there are other e-commerce models such as dropshipping, in which the costs of storage, logistics and order preparation would be eliminated.
Taking into account all these expenses that are associated with the online store, you must calculate a good profit margin so that your e-commerce can be profitable.
Therefore, and roughly, you should make an estimate of your profit margins to see if your online store is profitable in the long term.
- If the product has an average price between $50 and $100, the profit margin must be at least 40%
- If your product has a high price, greater than $500, the profit margin must be at least 15-20%.
Logistics as a key point of online sales
And the last requirement that you must take into account to create an online store and no less important than the rest, is logistics.
Finding your perfect courier agency
You should look for a good courier agency. This must adapt to your products, in addition to having good delivery times and offering you competitive rates.
One of the best methods to make cheap shipments is the Genei shipping comparator, although depending on your type of products other companies may be better.
First national and later international
One of the keys to growing an ecommerce is to focus first on domestic shipments. They are cheaper and the benefit will be somewhat greater.
That is why we recommend that you focus only on shipments within the country, where it is easier to communicate with both the logistics company and the client in the event of any problem.
Later when the online store goes from strength to strength, you can start expanding borders.
These 3 requirements are necessary things to sell products online, and I hope this little guide helps you to succeed with that ecommerce idea that is already settling in your head to stay.