Everything you need to know before starting your business on social networks

On TikTok or Instagram, “small businesses” have flourished by 2020. But it is important to respect the law so that the activity is legal, otherwise the seller risks a lot.

The year 2020 has given rise to entrepreneurial calls. Some have decided to take the plunge and launch their “small business” on social networks to sell homemade creations, ranging from resin soap bowls to bespoke sneakers.

These not always legal small businesses are particularly present on TikTok and Instagram. But social networking is not a lawless zone and the laws governing the activity of online commerce must be respected.

Do you need to specify your activity?

Even if the salesperson does not find it appropriate to disclose his business because he does not believe he is a professional, he can still be considered as such by law.

Selling your clothes occasionally to empty your locker room will not be considered a professional activity, but selling it daily, yes. Repetition is therefore an important criterion.

Similarly, buying clothing for the sole purpose of reselling it and making a profit will constitute a professional activity. Ditto for procuring waxes and wicks to create candles.

If the seller has not declared his activity, but according to the law he is considered a professional, he will be guilty of illegal sale of products and risk a lot.

“It’s a violation of trade law, consumer law and it’s criminal. The illegal sale of products can lead to you paying fines, paying the state on unpaid VAT and you can even be banned from setting up businesses for several years,” Alexandre Lazarègue specifies. , lawyer specializing in digital and internet law.

Initially, setting up an independent business is a good solution. However, this status cannot be maintained beyond a certain turnover (the ceilings vary according to the activity). It will then be necessary to set up a sole proprietorship (EI, EIRL) or a company (SARL, SAS, EURL).

How to get paid for products

On Instagram, TikTok or even Snapchat, some apprentice merchants invite their customers to exchange private messages to find out the payment terms, and sometimes they request direct payment via the application to exchange money between friends Lydia.

Except that in the case of professional activity, this process is not legal at all. To have a good reputation, you need to “open a professional account for your business and use official means of payment”, explains Me Alexandre Lazarègue.

“When setting up a business, you need to be able to specify the payments. So only the transfer or check from an individual to a business is legal,” clarifies Me Alexandre Lazarègue. “Payment methods must be official and invoices must be delivered” to customers.

In France, it is almost impossible to just set up your business on Instagram or TikTok because these platforms do not offer an integrated payment system. In the US, Facebook is testing a shopping feature on its service and on Instagram that allows customers to select and pay for a product without ever leaving the application.

This feature is not available in France. For the sale to be legal, the customer should therefore be asked to register the RIB in his professional bank account so that he can make a transfer. A boring solution far from satisfactory for the customer.

The easiest way is to go through a third-party tool and only use social networks as virtual showcases. By creating your own e-commerce site or by deciding to make your product available on marketplaces like Amazon or Etsy that specialize in craft sales.

What is forbidden to sell

Sellers on social media must abide by the law like any merchant. Counterfeiting is therefore prohibited and homemade cosmetics must be forgotten.

“Cosmetics are covered by health legislation because they are products that are likely to be dangerous. One has to respect a wide range of health rules that are impossible to comply with when it comes to homemade products. At that point, one is endangering the consumer and he will not have many means to turn against the seller, ”says Me Alexandre Lazarègue.

Even on the internet, the seller must respect the consumer’s rights and allow him to exercise the right of withdrawal, request a refund … With few exceptions. In the very specific case of personal products – for example, sneakers tailored to the customer’s wishes, the seller may deny him his right of withdrawal.

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