On TikTok or Instagram, “small businesses” have blossomed in 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 vocations. Some have decided to take the plunge and launch their “small business” on social networks to sell homemade creations ranging from resin soap dishes to custom sneakers.
These not always legal small businesses are mainly present on TikTok and Instagram. But social networks are not a lawless zone and the laws governing the activity of online commerce must be respected.
Do you have to declare your activity?
Even if the seller does not deem it appropriate to declare his activity because he does not think he is professional, he can still be considered as such by law.
Selling your clothes occasionally to empty your dressing room is not considered a professional activity, but selling them on a daily basis, yes. Repetition is therefore an important criterion.
Likewise, buying clothes for the sole purpose of reselling them and making a profit will be a professional activity. Ditto for acquiring wax and wicks to make candles.
If the seller has not declared his activity, but is considered a professional by law, he is guilty of illegal sale of products and risks a lot.
“These are violations of the Commercial Code, the Consumer Code and it is punishable by criminal law. The illegal sale of products can lead to you paying fines, the state pays in case of unpaid VAT and you can even be banned from selling for several years to set up a company. years”, says Alexandre Lazarègue, lawyer specializing in digital and internet law.
Initially, setting up an independent business is a good solution. But this status cannot be maintained above a certain turnover (the maximums vary according to the activity). It is then necessary to set up a sole proprietorship (EI, EIRL) or a company (SARL, SAS, EURL).
How are products paid?
On Instagram, TikTok or even Snapchat, some apprentice merchants invite their customers to exchange private messages to find out the payment terms, sometimes requesting direct payment through the application for exchanging money between friends Lydia.
Except that in the case of professional activity, this process is not legal at all. To be in good standing, you must “open a professional account for your company and use official means of payment,” explains Me Alexandre Lazarègue.
“When you set up a company, you must be able to declare the payments. So only the transfer or check from a private individual to a company is legal,” explains Me Alexandre Lazarègue. “Payment methods must be official and invoices must be provided” to customers.
In France, it is almost impossible to create your business on Instagram or TikTok alone, as these platforms do not offer an integrated payment system. In the United States, Facebook is testing a shopping feature on its service and on Instagram that will allow customers to choose and pay for a product without leaving the application.
This feature is not available in France. Therefore, for the sale to be legal, the customer must be asked to register the RIB of his professional bank account so that he can make a transfer. An annoying solution that is far from satisfactory for the customer.
The easiest way is to use a third-party tool and use social networks only as virtual showcases. By creating your own e-commerce site or by deciding to make your product available on marketplaces such as Amazon or Etsy, which specialize in selling handicrafts.
What is forbidden to sell?
Social media sellers must follow the law like any other trader. Counterfeiting is therefore prohibited and homemade cosmetics should be forgotten.
“Cosmetics are covered by the health law because they are products that are likely to be dangerous. You have to respect a whole set of health rules that are impossible to respect when it comes to homemade products. At that point you put the consumer at risk, and he will not be much resourced.” have to turn against the seller”, says Me Alexandre Lazarègue.
Even on the Internet, the seller must respect the rights of the consumer and give him the right of withdrawal, the request for a refund… With a few exceptions. In the very specific case of personalized products – for example, sneakers that have been adapted at the request of the customer, the seller can refuse him his right of withdrawal.