Is it Safe to Trade Online?
Is an online shop still worth it? Warning letters and other problems
The statistics are terrifying. Almost 50% of all German online shop operators have been warned at least once in the last 12 months, according to Trusted Shops. The average cost was 1,300 euros.
The controversial warning associations are more and more involved. As with many a warning lawyer, the focus here seems to be more on economic interests than on helping potential customers.
But these are not the only challenges shop owners face.
What does this mean for small online retailers in particular? Is it still worth running an online shop?
Is an online shop still worth it?
For the large online shops, the warnings do not really pose a threat to their existence. I could imagine that such a warning, which indicates a legal problem, is sometimes cheaper than hiring a large agency or law firm to look for legal problems .
The warning costs are certainly a tough one, especially for the many small online retailers. I myself know a few local dealers who would like to earn a few more euros a month through an online shop. And that's really only a few euros.
According to eRecht24, the number of warnings has increased again. In the case of repetition, it is usually even more expensive. This can very quickly threaten the very existence of small online shops.
Reasons for warnings
The real question that arises when looking at these numbers is: "How can it be that so many shop owners have already been warned?"
Are almost all German shop operators criminally inclined and want to cheat their customers or damage their competition?
I personally don't think so. I know too many nice shop owners for that, even if there are of course black sheep.
I see a few other reasons for this:
- Many, especially small online shop operators, do not even deal properly with the legal regulations. It's just that easy to open an online shop today. Many shop operators overlook the fact that there are a lot of regulations for online shops in Germany.
- The legal regulations are scattered across a large number of laws and in some cases are simply not that clear. In addition, regulations and laws that also affect online shops change every few months. And if shop operators already employ an agency, then usually only for the creation of the shop and not for legal support.
- Court decisions create uncertainty. A long time ago, for example, there were different judgments from different courts on the right of withdrawal. Thus, an online shop operator was at risk of warnings, regardless of whether he used the legal template or not. The warning person simply had to choose the “right” dish.
- Market shakeout. Some “large-scale” warnings seem to be used simply to adjust the market. With correspondingly large warning sums or penalties in the case of repetition, one or the other shop operator can reach his financial limits.
- And of course there are also lawyers and associations that make good money from such large-scale warnings.
This is how you protect yourself from a warning
This is not legal advice, just a description of your own experiences. Therefore the first tip:
- You should have your own shop checked by a lawyer. This is the only way to be reasonably sure that you will not be warned.
- If an online shop, then right! You should only create an online shop if you really want to and can really earn money with it. Only then will you earn so much with your own shop that you can even put away an expensive warning from time to time.
- In any case, you should keep an eye on current judgments and changes in the law that affect online shops, such as the upcoming GDPR. An online shop is not something that you take care of on the side.
- You have to have enough time to look after your own online shop. If this is not the case, you should conclude a maintenance contract with an expert.
- Becoming a member of Trusted Shops, the Händlerbund or eRecht24 * is not a bad idea. Without doing too much advertising for these advertisers, but there you get a lot of information, templates and practical help as an online retailer and thus avoid many potential warning traps. For larger online stores this is definitely a worthwhile thing.
Incidentally, there is currently another petition that calls for a reform of the warning system under competition law and thus wants to stop the abuse. Please sign this petition in large numbers and share it on your social profiles.
More problems and challenges for online stores
Many of the following issues affect not just a new online store but other businesses as well. But these come together in a shop and, due to the usually very high initial investment, these challenges and problems must of course be given special attention.
In general, the competition is now very high. There are a large number of shops in many niches. Almost all areas are already occupied and popular product categories are completely overrun. It is often difficult to offer something special with a new shop, but this is important if you don't want to get involved in a price war.
In addition to the large number of shops, large online shops in particular also cause problems. Amazon is now very dominant and many users order there, even if it is cheaper elsewhere. As a new shop, it is not easy to convince potential customers to buy. Especially since Amazon has set the bar very high with overnight delivery, low shipping costs and so on.
Reach is also very important for online shops. SEO measures are no longer as easy today as they used to be, and shops in particular have problems ranking well with their product texts, which are often simply adopted. Here you have to invest a lot of know-how and time in order to achieve success.
Many only buy in an online shop if they can find a discount coupon somewhere. Due to the extensive use of such vouchers, many customers are used to them. Depending on the industry, this can also be a problem for new online shops.
- Returns and payment defaults
The administrative effort should not be underestimated either. There are many returns, although this varies depending on the product area. Many customers order different alternatives and then only keep one of them. These are costs for the shop. But payment defaults can also cost money. All of this should be taken into account in the calculation.
Conclusion - is an online shop still worthwhile?
Despite the problems and challenges I mentioned, an online shop can still be worthwhile today. It just depends very much on the individual case. As with any other business start-up, you have to analyze exactly what the market looks like, what the competition is doing, how you calculate, which marketing measures you use and what your own USP looks like.
Shop operators must also be aware that, in addition to economic issues, they also have to keep an eye on legal requirements. If you don't have the know-how for it yourself, then you have to look for someone who does. Small online shops in particular often save at this point. At the latest after the first warning you will notice that it was the wrong place to save money.
In addition, all online shop operators should set up a financial emergency reserve. Because if you look at the percentage of shops that have been warned, the chances that you will also receive a warning at some point are not bad.
You can find more tips and experience reports on setting up an online shop in this article.
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