How to Sell Online: Products and Services on the Internet
Do you want to understand how to sell online, but don’t know how to start your own business? Find out all the rules to follow to sell on the internet, when you do not need a VAT number and when it is necessary.
Selling online on an occasional basis
When the online sales activity is occasional, it can be sold without a VAT number, by private individuals. In these cases, the sale is made sporadically and occasionally, without any regularity. For example, a university student who decides to sell the used computer on a classifieds site does not have to register for VAT.
Often the occasionally is linked to an income of € 5,000 per year. However, the obligation to register for VAT does not depend on a specific amount, but on the way in which the activity is carried out. If the activity is occasional there is no obligation to pay VAT, on the contrary, if the activity is habitual there is always this obligation even if the annual income is less than € 5,000.
For example, the art collector who sells a single painting worth € 50,000 on the internet does not have to register for VAT. If, on the other hand, the collector opens an online shop and sells a work of art worth € 100 (€ 1,200 per year) every month, he is obliged to register for VAT.
Selling on the internet in a habitual way
The online sale carried out in a habitual way implies the start of a commercial activity. In these cases, in fact, the sale takes place continuously or in any case with a certain regularity. For this activity, a VAT number is required as a sole proprietorship or as a company and all the formalities of any other sales activity.
There are two ways to sell on the internet:
- open an online store (e-commerce), a site or an app where services or products are sold on the internet (e.g. MarioRossiShop.it)
- sell on an existing platform, without creating your own e-commerce. This is the case of those who open a store within a site dedicated to commerce (e.g. eBay or Amazon)
In both cases, it is possible to sell both new and used or refurbished goods. There are no particular differences in the online sale of a first or second hand product. The only aspect that can vary is the guarantee for consumers which for new goods is always 24 months and for used goods it can be reduced up to 12 months.
Starting an online business
Online business can be done in different forms. In fact, the sale can be carried out individually with the opening of a sole proprietorship or through the opening of a company (e.g. SRL, SRLS, or SPA). The first step in starting the business is to identify the most suitable form.
The sole proprietorship is suitable for setting up businesses that involve little risk and require small investments. This is because in this case the initial costs are lower and you can access a reduced taxation of up to 5% with the flat rate scheme. With the sole proprietorship, however, other shareholders cannot be involved and the owner is personally liable for the debts of the business.
The company, on the other hand, is better suited to activities that involve more risk and greater investment. In this case, in fact, the company is directly liable for the debts of the business with its own assets. Opening a company involves higher initial costs for setting up and allows more partners to participate.
The other requirements for selling online
Regardless of the form chosen to start the business, further obligations are required such as registration in the register of companies and INPS registration for the payment of pension contributions. These registrations can be made electronically with the Communicate service. These practices are generally carried out by the tax advisor for sole proprietorships and by the notary for companies.
For the sale of some types of products or services, specific authorizations may be required. This happens, for example, in the food sector. For the administration of food and beverages, in fact, the holder must be in possession of a certificate (SAB certificate). Furthermore, it is necessary to have a HACCP certificate on the prevention of risks deriving from the processing and sale of food products.
Furthermore, to sell on the web, the seller must publish the following documents:
- General conditions of sale to regulate online sales with customers and fulfill legal obligations regarding the right of withdrawal, product warranty, shipping, delivery, etc.
Furthermore, in order to sell online, a series of information obligations must be respected and the mandatory data for the website must be published. For example, the VAT number and company name. This is a necessary fulfillment to guarantee transparency to its users and to avoid penalties.