Legal Aspects of an E-Commerce Website

[cwcw182]

Hi,

I'm thinking of starting up an online business selling PCs. I have a decent, all round knowledge of PC hardware and software. I have worked out that I can buy all the components from online vendors, put them together, add a 20 - 30% mark up, and be able to offer a very competitive selling price for the resulting PC. I feel there's a gap in the market for a fully customisable PC build, online, at a price lower than all of the PC retailers I have compared to.

I am already registered as self-employed through another venture, and I have a decent grounding in business and finance, so from that point of view I think I'm ok. However, it's the legal aspects that are worrrying me. Firstly, am I allowed to just buy a load of components and sell them as a complete PC? Would I have to offer a warranty or would that be covered by the manufacturers of each of the components? How long would I be responsible, if at all, for dealing with any faults that arise from the PC? What else would I need to consider, from a legal point of view in particular?

Many thanks.

[Antonia @limeone.com]

I would do some more research into your target market before deciding on the price for your product.

One of the reasons other suppliers charge more is due to the client warranties and consumer law affecting the non business trader.

This loads the costs of the infastructure you need to run your business so if you believe you can do better than Dell you probably need to look once more at the sorts of warranties and guarantees you will be responsible for.

If you are sold on this subject you need to take legal advice on all of the items below but for starters think of :

Consumer law- check out trading standards to see the sorts of things you need to look to cover for your customers.

Distance selling regulations- a cooling off period of 7 days following order for the consumer.

Electronic regs regarding use of equipment and qualifications of those testing items for home use before they enter the market.

Manufactors' warranties if you are reselling their items as part of a whole machine- you may find the cost goes up if you are making up whole machines using a variety of parts from different suppliers.

How are you going to deal with the problems that occur? A back to base guarantee with you picking up the postage costs or a collection service? You will be bound legally to offer a 12 month guarantee minimum.

Public and product liability insurance, what happens if some one gts burnt using one of your machines?

[cwcw182]

Thanks for the post. This is where my problem lies as I don't understand what costs are involved with the warranties. If a 12 month return to base warranty was the minimum legal requirement, with the customer paying the delivery costs, this would be achievable.

Howcome I could build a system and stick it on eBay without any regard at all for any kind of warranty? Is eBay exempt from these kinds of issues?

[visagephoto]

Thanks for the post. This is where my problem lies as I don't understand what costs are involved with the warranties. If a 12 month return to base warranty was the minimum legal requirement, with the customer paying the delivery costs, this would be achievable.

An aquaintance of mine once bought a laptop from a major computer retailer, it developed a fault 18 mths after the purchase date, and the seller declined a repair, replacement, or a refund, as the product was 6 mths out of warranty.

He took his case to the small claims court (England) stating that this type of product should, have a useful life expectance well beyond the garuantee period, and he won his case.

[autolycus]

Thanks for the post. This is where my problem lies as I don't understand what costs are involved with the warranties. If a 12 month return to base warranty was the minimum legal requirement, with the customer paying the delivery costs, this would be achievable.

An aquaintance of mine once bought a laptop from a major computer retailer, it developed a fault 18 mths after the purchase date, and the seller declined a repair, replacement, or a refund, as the product was 6 mths out of warranty.

He took his case to the small claims court (England) stating that this type of product should, have a useful life expectance well beyond the garuantee period, and he won his case.

Exactly - the warranty period is just there to make life easier - i.e. you are guaranteed a repair/replacement during that time without having to take legal action. But it is perfectly possible to bring a legal claim against the retailer after that time - it's just more hassle than going back to the store with your receipt and asking for a repair/replacement.