E-commerce – Part 1

In today's business world, e-commerce has become an essential and crucial pillar. This has become even more evident since the current sanitary crisis.

E-commerce may seem to be a simple activity but nothing could be further from the truth.

This way of doing business must take into account several practical elements and aspects as well as the rigorous legislation to which every "online" activity is subject to.

1. What is meant by e-commerce?

The term e-commerce refers to a distance contract with a consumer with a payment obligation.

This agreement is regulated in the Economic Law Code- Wetboek Economisch Recht - Code de Droit Economique (hereinafter "WER-CDE").

According to the WER-CDE, there is a distance contract if it has the following characteristics :

• it is an agreement concluded between an enterprise and a consumer;
• within the framework of an organised system for distance sales or services without the simultaneous physical presence of the enterprise and the consumer; and
• which, up to and including the moment at which the contract is concluded, makes exclusive use of one or more means of distance communication, namely e-commerce via a webshop, telephone sales, mail order sales, etc.

When a consumer buys a product through your webshop, he pays in advance and can in principle no longer reverse his purchase, except based on the right of withdrawal.

However, the consumer is not bound by his purchase if you, as an enterprise, do not comply with the relevant legislation. We refer to a future article on this subject.

It is therefore very important that, when you offer products or services from a distance (e.g. online) to consumers, you make sure to carefully comply with all legal provisions.

We will now discuss a number of practical aspects that you should take into account if you want to start up a webshop.

In a next article, we will provide  you with an overview of all the obligations you must comply with when starting up and organising a webshop.

2. E-commerce in practice

2.1 Draw up a good business plan

Your product and the market in which you will offer that product for sale are essential to the success of your business.

That is why it is important to conduct market research to find out wether it is opportune to start up a webshop and what your target clients are and where your competition is. This way, you can find out if your business needs effectively an e-commerce and what you need to do to meet the demand of your target group and find out how your competitors operate.

You can already find below some advantages of e-commerce and useful hints.

Some advantages ...

• it has no opening hours;
• it is a way of advertising, albeit online, which makes it possible to develop a customer base extending beyond your geographical location;
• customers can use your webshop for webrooming in advance and then make their purchases in your physical shop in a very targeted way;
• selling on webshops is more efficient;
• it is possible to highlight or underline certain aspects or niche activities of your commerce;
• it is possible to offer a wider range of products.

Some useful hints ...

• organise your online activity as one set with the existing offline activity so that both activities reinforce each other;
• expand your online activity in such a way that it is also suitable for a kind of webrooming, where customers can first explore your offer before making a purchase in your physical store;
• evaluate the costs that you will incur in organising your webshop and the delivery and return of the goods;
• think about your value proposition online and offline, possibly offer a selection of your products or services or underline a specialisation or niche;
• acknowledge that a webshop requires a lot of hours of work to keep it up to date and competitive;
• remain realistic about the objectives: for example, the positive response of 2 to 3% of your webshop’s visitors is already a great result.

2.2 Choose a customised e-commerce page and/or platform

If you already have a website, you can ask your website builder to create a special e-commerce page or module.

If you do not yet have a website, it is important to choose an e-commerce platform that best suits the products or services you offer and the way you do your business or a platform  that can be adapted to your specific needs. These include i.e. Shopify, Prestashop, Magento, Odoo, Lightspeed, Wix, WooCommerce, and even Proximus ... etc.

In addition, it is also possible to opt for online galleries or marketplaces where you can offer your products, such as Etsy, Belgunique, iTunes, Steam, Hoomed, Sphere, ...etc.

Don't forget to carefully check which are the best functionalities for invoicing, payments and returns.

Finally, you may consider to combine a special e-commerce page on your website and a page on an e-commerce platform. This allows you to enlarge your offer or diversify the range of your products or services.

Please keep in mind that you will need to spend enough time to keep your webshop up to date at all times, both in terms of offer and prices.

2.3 Ensure that your webshop is user-friendly

In addition to the legally required information, it is important that customers find a clear and user-friendly ordering procedure in your webshop.

Visitors to your webshop expect to:

• quickly find all the necessary information and an answer to any question they may have regarding the products and services offered;
• be able to follow a clear step-by-step plan and a smoothly running ordering and payment procedure;
• see immediately when a product or services is not available or when errors occurred by filling in data;
• be informed at the end of the ordering process that the order is final and therefore "can no longer be reversed";
• have the possibility to order online and to pick up the order in the physical store.

Customers who encounter difficulties in their ordering process will soon go to another website with the same offer.

Even after the sale is concluded, customers should be assured that all their problems and questions are being dealt with in a quick and efficient manner.

A well-functioning webshop with a clear and user-friendly order procedure and a well-functioning return and after-sales service is the basis for long-term customer relationships.

2.4 Offer a good and efficient payment system

In e-commerce, it is important that customers pay in advance with their debit or credit card.

That is why it is important to integrate a good and performant payment system.

For this purpose, payment systems such as Mollie, Stripe, Ingenico, Icepay, Paypal, ... can be chosen.

2.5 Organise an efficient marketing

The importance of the visibility and attractiveness of the website cannot be overemphasised.

An investment in marketing is an important asset and is even more important than the investment in technology, for instance the promotion and marketing in the results of search engines, internet advertising, Facebook Marketplace, LinkedIn, Instagram Shopping, ....

Keep in mind that good marketing is very labour intensive. A good webshop requires several hours of work per week.

2.6 Measure is to know

Without visitors on your webshop, you will not sell any single product or service.

That is why it is good to constantly keep your finger on the pulse and know exactly what the expectation and wishes of your target group are and how the visitors of your webshop behave.

There is a handy tool for this, namely analytics, but keep in mind the privacy legislation (see point 5).

2.7 Make a good choice of your suppliers

Choose the right suppliers, taking into account their reliability, the quality of their products and the prices they charge for each part of your product.

This ranges from the material used to manufacture your products to the packaging in which you send them to your customers.

You can also call on external companies for the return of used products as imposed by law.

2.8 Choose a good delivery service

The choice of delivery service (national or international) may have a significant impact on the final price and profitability of the product offered to purchasers.

You can call on  Bpost, Post.nl, DPD, Sendcloud, ...

This aspect of e-commerce is also enormously important and depends on the target area of your webshop.

2.9 Organise your stock

When selling products via e-commerce, you must have a stock of products, manage it and be able to store.

Too much inventory costs a lot of money and will definitely result in losses while too little stock means missed opportunities.

It is therefore extremely important that you prepare this very well and that you acquire the necessary tools (software) to assist you.

If, for example, you have a shortage of space to store your products, you can call upon specialized storage space rental companies.

3. General terms and conditions of sale

When setting up a webshop, general terms and conditions should be included. These may include the information as required by the WER, as you will be able to read in our next article on e-commerce.

In order to be enforceable, general terms and conditions of sale must be part of the agreement.

To this end, they must meet two conditions:

• First, the buyer must have taken cognisance of these conditions  or reasonably be able to take cognisance of these.
  
  The general terms and conditions must be drawn up in a clear, comprehensible and unambiguous manner. In case of doubt as to their meaning, courts will give preference to the interpretation that is most favourable to the consumer.
  
  
• Second, the general terms and conditions must be explicitly and actually accepted by the buyer.

A simple reference or link to general terms and conditions is therefore often considered insufficient to meet these two conditions.

Therefore the approval of the general terms and conditions should be a mandatory step in the online purchase process, for example by making the payment page accessible only if the box indicating that the general terms and conditions have been read and accepted in their entirety is ticked.

4. Invoicing the online purchase

Operators of a webshop are obliged to issue an invoice every time an online sale occurs. It is best to do this along with the confirmation of the order.

For sales in Belgium, the same VAT rates apply as for sales that take place in a physical store.

Different rules apply in respect of cross-border sales, depending on whether or not the buyer is subject to VAT and whether or not he is based in or outside Europe.

For B2C sales, some EU member states require VAT registration (requesting a VAT number) as soon as a certain sales threshold is exceeded, and therefore sellers are also obliged to charge and pay VAT in that member state

5. Respect privacy legislation

When conducting an e-commerce, the privacy legislation, which is provided for in the GDPR must be respected at all times.

In the first place, you must identify which personal data are being processed. Through a webshop you receive the data of your customers electronically.

The question that then arises is which data you keep and what you will do with these data. You may only use the data you receive for the order in question and may certainly not pass it on to third parties.

If you want to use data for purposes other than shipping the goods or performing the services ordered, you must obtain the prior consent of the person concerned.

To measure the traffic on your webshop, you may use analytics. Through analytics it is possible to see how visitors land on your webshop, such as through a google search, a newsletter, an adwords campaign, through other websites, etc. Subsequently, analytics displays the behaviour of your visitors, more specifically how long they stay in your webshop, which pages and products they visit.

But to be able to use analytics, cookies must be added to your webshop. You must inform every website visitor about this and regarding cookies that are not essential or functional, you must obtain his explicit consent. To obtain such consent  your website should be provided with a cookie banner that contains  the correct information about the cookies and asks for permission. Not giving access to your website when the cookies are not accepted is prohibited.

In summary, it is extremely important on every webshop to provide an accurate privacy statement and a cookie policy and banner. 

6. Conclusion

E-commerce undeniably offers significant advantages (including in the field of logistics).

But e-commerce is also strictly regulated with the aim of protecting both the service provider and the beneficiary (both professional (B2B) and consumer (B2C)).

In our next article, we will discuss in more detail the relevant requirements and conditions of the WER-CDE.

Failure to comply with these requirements and conditions are irrevocably sanctioned with a number of fines and may cause the nullity of sales that will make all the profits that can be expected from such an activity disappear like snow in the sun.

It is therefore essential to remain vigilant, both when setting up an e-commerce site and when carrying out economic activities via such a site.

It goes without saying that Seeds of Law can assist you by ...

• adapting your general terms and conditions;
• adjusting your privacy and cookie policy;
• optimising your contractual relationship with your suppliers;
• fine-tuning your revocation clauses so that you will not be overwhelmed by requests to take back products.

Do not hesitate to contact us on +32 (0) 2 747 40 07 or via info@seeds.law.