Online marketplaces are booming. Sales on such platforms as eBay, Facebook Marketplace and Amazon Marketplace accounted for over half of all global ecommerce sales last year, and the proportion is only set to rise. This is a boon for consumers, as rising competition leads to significant savings, with business sellers fast replacing the individuals at whom the platforms were originally marketed. However, this trend also carries risks for buyers. The global market for counterfeit goods, for example, is now worth $2.2trn, with a significant proportion of these unregulated and potentially dangerous goods ending up on online marketplaces.
As a result, consumers are becoming wary. The businesses that aim to thrive in this new environment and reap the rewards to come are those that are willing to embrace fair and open dealing, with full legal compliance forming the bedrock of a positive reputation. To aid sellers in this respect, Business Companion – a free online resource produced by the Chartered Trading Standards Institute (CTSI) – in partnership with The Department for Business, Energy and Industrial Strategy (BEIS) has launched a new Business in Focus guide for selling goods via online platforms, focusing on legal obligations to consumers.
Showing the way
The guide lays out a logical approach for sellers, beginning with three tests for whether the UK’s trading rules apply, which cover what counts as a ‘trader’, whether you’re selling to businesses or consumers, and geographical location of your customers. The key point here is that each online platform will have its own rules for these areas, but these are primarily for administration purposes – the law applies regardless of platform. The focus then moves to pre-contractual requirements (in terms of the information you must provide consumers for a contract of sale to be valid) and consumers’ cancellation rights, along with a list of exemptions from these rules. Not only does this advice help traders comply with the law, it also helps them generate goodwill by demonstrating to customers that a seller has nothing to hide.
The guide also includes a useful list of frequently asked questions, supported by practical examples that help traders visualise potential problem situations. There’s also a concise summary of trading standards regulations that apply to online marketplace sales, including legislation that protects consumers from misleading descriptions, aggressive practices, unlawful surcharges and unsafe products. This is vital knowledge to help traders meet their common law duties as well as statutory ones. Finally, there’s a useful download containing the top-level information that traders need to know before selling on online marketplaces, including the aforementioned trader test, information requirements, and cancellation rights.