Permits for Operating Worldwide E-Commerce Business Model

Narendra Kumar

18 Dec, 2020

Opportunity in Global E-commerce market is phenomenal. Identification & capturing of the market is the key to success whether in the domestic region or worldwide. Cross-Border alignments & Strategic interventions by effecting Joint Ventures & Foreign Investments in the E-commerce business model are getting rampant.

Understating Localization for a particular product in case of online operations is receptive. However, maintenance of Brand Identity & goodwill is what is needed to secure a business place in worldwide context. Global cross-border spending is set to multiply for the next 5 years so as to reach roundabout 425 $ billion & growth drive will be witnessed by China.

To be summarized that APAC (Asia Pacific) region is leading the Economic Growth in the forefront.

KEY POINTS:

• Creation of Brand Equity & Goodwill
• Secured Payment Gateway & multiple payment choices
• Marketing model preparation
• Adherence to Cyber Crime Laws
• Compliance with the genetics of Information Technology Act.

The demand for localized customer service has also resulted in many brands and retailers integrating their customer service solutions and CRM systems^[1] with their language service providers – a trend we expect to continue. It’s clear that in order for your brand to successfully compete internationally, a customer-focused approach to your localization strategy is essential to fostering brand loyalty – especially if you’re competing with local brands that offer similar products or services. Understanding and consistently maintaining customer expectations in each market you operate in will play a key role in how your business will evolve in the future.

FOR CLEARANCE IN USA:

The US is the world’s largest economy & an attractive market to capture. English is spoken by more than 70% of the world’s population, which makes localization very hassle free & easy for spreading the world. Most of the globally known household names have conceptualized from the USA.

LAW to be referred:

This article looks at the legal framework & regulation in the USA e-Commerce market and outlines the relevant requirements for trading in this territory.

With a federal system^[2] of government, there is a wide range of legal influences on any business looking to trade into the US. Some legislation is set at the federal level, but most consumer legislation is set at the state level. Intellectual property rights are well covered in the US at a federal level and there are several other important elements to take notice of, such as the PCI DSS payment card rules and those relating to the provision of credit.

50 states represent a mixed legal picture with most contract law being set at this level. The Uniform Commercial Code is an effort to harmonize requirements across the 50 states but is not federal law and it is up to the individual states to adopt.

• Application for E-commerce business license to operate in a particular country.
• This particular license can be applied online through US Small business administration i.e. SBA
• Obtaining the necessary export-import permit from the concerned authority.
• GST No. is a must for selling goods worldwide as it helps you claim also further credit.
• Tie up with Shipping Providers like DHL, Fedex& UPS or if these shipping agents do not have the necessary Import Export Code then you can even resort to courier companies who act as Payment aggregators to shipping companies for bulk transfers.
• No company is required in US State for selling products over there or anywhere overseas.

Payments:

Documentation required is based on your organization type. E.g. if it is Proprietor you may need to provide a different set of KYC documents, and if it is Privately limited you may need a different set of documents.

If you are going to sell using your own website then the easiest way is to open Paypal account, you will need to have your bank account, pan card, and credit or debit card.
The bank account is required to withdraw payments
Pan Card is to verify identity
Credit or Debit card is to make payments

Beside this you can apply for another payment gateway such as PayU, CCAvenue, Zakpay, please specify that you need to accept US Dollars, otherwise you may end up opening Indian Rupee account and your US customers might not be able to pay in USD. 

How About Buying from China & Selling Thereafter in USA?

Many merchants, traders or organizations from different parts of the world or you may refer China here, for example, can sell goods to US Customers through drop shipment method.

However certain, necessary licenses & customs clearances are necessary from the import house of USA. Also as a seller, you need to provide the US Buyer with accurate documentation & implications of US federal income tax on the payment received from the buyer. Moreover, tax identification no. is a pre-requisite& a proper relationship with the supplier in that particular state.

Drop shipping is the ultimate rescue for many merchants these days. It is explained in the illustratively in the next blog spot.

For Clearance in Europe:

The UK has a mature & sophisticated market for the establishment of E-commerce model. The ease of business & relatively high vulnerability has made Europe an attractive destination for online business. Many international brands are looking to expand in the European region.

However, any merchant or trader looking to expand in the UK Market should be aware of the pros & cons of Brexit or Cross-border trade. More than 80% of the population has access to internet services & retail growth has been rising significantly.

Cross-border purchasing is highly popular in the UK region. The marketplace is dominated by Amazon, eBay, Etsy, Rakuten.

Major rules to comply are European Union Regulations, Brexit legislations & General Data Protection Regulation. Sellers looking to break into the European marketplace should pay special attention to Value Added Tax^[3]. In the specific union, the VAT is applied to most customer purchases. For example, many US sellers overlook the fact that the VAT is already incorporated into the prices of Amazon’s United Kingdom site. Profit margins take a hit as a result of the oversight.

Conclusion:

Just like in any industry, competitors are everywhere. The E-commerce world is a little different though because you can easily research your competition with the click of a button and from the comfort of your living room. Information about your competitors is so easily accessible that it’s almost impossible to ignore. This means that you should take the time to research your competition because they are probably researching you as well. However, E-COMMERCE MODEL worldwide has cached frenzy immensely.