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Which method of hosting to use for selling online?
e-Business covers a vast range of activity from publishing an e-book to online consultancy services to buying and selling online.
There are several platforms that offer a hosted e-commerce solution:
• For physical goods - eBay, Joom and Amazon;
• For handmade goods - Etsy or Amazon Handmade;
• Freelance services - PeoplePerHour and Freelancers;
• E-publishing or print on demand - Amazon Kindle or Lulu;
Alternatively, you can self-host and sell directly from your website using an e-commerce platform Shopify, WooCommerce or PrestaShop etc.
How to choose the right platform?
Not all e-platforms are equal, and some have rigid requirements regarding where your company is incorporated, banking requirements, e.g. eBay requires your bank account to be in the same country as your company is registered. Your nationality and place of residence are also crucial for some providers. To take an extreme example, if you are North Korean living in Pyongyang, you will have very significant difficulty in signing up to any e-commerce platform.
There are several areas that you should consider before starting an e-business. These include the choice of jurisdiction, taxation and bank account.
Choice of Jurisdiction
Theoretically, any jurisdiction can be used for an e-business. However, you should consider the running costs of the company, including setting up, end of year accounting requirements (if any), and VAT registration if selling into the EU.
The cheapest companies to run are not necessarily the best for running an e-Business.
Taxation / VAT
Tax rates vary from zero to 30%+ and so should form the critical part of your planning as should possible VAT obligations, e.g. digital publishing attracts VAT in the EU. Some online platforms offer VAT MOSS handling on your behalf, e.g. they collect & pay this on your behalf.
Ease of Banking
Banks are becoming increasingly difficult and expensive to both open and maintain accounts. In many cases, it may be better to set-up an e-Wallet* account. Credit card processing should also form part of your business plan.
*An e-Wallet is a financial services provider, e.g. PayPal and does not have a physical presence. They are regulated, which should help to protect clients' funds.
Please look at our e-Banking page for a more comprehensive review.