4 Factors to Consider Before Starting an Ecommerce Business

Starting an eCommerce business is a proven strategy for reaching a broad audience beyond brick and mortar businesses. However, there are several factors to take into consideration before setting up shop online, including creating compelling product descriptions and protecting against the cost of a potential product liability lawsuit. Here are some important considerations for online sales.

1. eCommerce business platforms

Before making the leap to selling online, business owners need to decide which eCommerce sales tools to use: a company website, third-party platform, or both.

66 percent of business owners who sell products online do so on their company website, according to a recent poll conducted by small business insurance broker Insureon and business listing service Manta. While this gives business owners more control over transactions, they also need to make sure their website meets security standards. This includes not only providing a secure, encrypted checkout process for customers, but also ensuring that sensitive information, such as credit card numbers, is stored securely.

For businesses that don’t have the time or desire to manage eCommerce sales on their website, there are numerous third-party sellers to choose from. Companies like Amazon, eBay, Shopify, and Etsy can do a lot of the heavy lifting, including handling the checkout process and in some cases even shipping the products. While this option may pose challenges for businesses that want to build up a repeat clientele, it also simplifies the process for those that don’t have the time to dedicate to running an online store.

2. Product descriptions that pop

It’s essential to have a great product to sell, but that’s only half the battle. The next step is convincing people to buy it. Before posting products online, sellers need to write a creative and informative description to entice customers to click the “buy” button. A few points to keep in mind while writing product descriptions include:

  • Envisioning the ideal customers for the product, and writing the description with them in mind.
  • Highlighting any benefits / advantages of the product.
  • Going easy on the superlatives, such as best and greatest, unless there are facts to back them up. Otherwise, the description could come across as insincere.
  • Making descriptions easily scannable by using bullet points (like this!) that quickly highlight the most important facts about your products.

Business owners who don’t have a way with words might want to consider hiring a freelance copywriter.

It’s also worth the investment to take professional photos of your products. It’s not necessary to rent a studio and hire a photographer, but business owners should at least invest in a professional camera.

3. Terms and conditions

While it may go unnoticed by many users, the terms and conditions page is one of the most important pages on any website. That’s because it lays out the rules for a site, and can help protect business owners from potential lawsuits.

Some elements online sellers should consider including in this section:

  • A disclaimer stating that you are not liable for any errors in content on the website. This can be useful if an item that costs $100 is mistakenly listed as $1.00 on the site.
  • A copyright notice, such as “Copyright © 2018. yourbusinessname.com.” While your website is protected by copyright as soon as it is published, this puts any would-be plagiarizers on notice that they can’t use your content without permission. If you haven’t already, you might also want to consider trademarking your business, as well.
  • A privacy policy that clearly states how you are using any customer information you collect, such as email addresses or credit card numbers. Not only is it good manners to let users know what data you are collecting about them, in most cases it is also the law.

For business owners who aren’t sure what to include, a quick search online can yield multiple template options for a terms and conditions page. However, the best way to make sure all bases are covered, legally speaking, is by hiring an attorney to help create this page.

4. Product liability lawsuits

Business owners could find themselves in court if a product they sold online caused a customer to become ill or injured – even if they didn’t manufacture the product in question.

Product liability insurance can protect against the cost of a lawsuit, and can pay for:

  • Lawyers to defend the business.
  • Medical damages owed to the injured party.
  • A settlement, if the lawsuit is resolved out of court.
  • Damages, if the business loses the lawsuit.

Product liability coverage is typically included in general liability insurance, which can also help cover costs for businesses sued for trademark infringement.

Rebecca Hosley is a content writer for Insureon, the industry leader for online small business insurance. She lives in Chicago, and enjoys volunteering at Lincoln Park Zoo in her spare time.