Roj's E-commerce Information

Introduction

This technology industry has seen a bit of a roller coaster ride in its first couple of years. It's still a very important (but increasingly mundane) sector, but after the early boom, big investment and ridiculous share prices followed by several big names going bust (remember boo.com and letsbuyit.com to name a few). The market has now settled down, but share prices are still a lot lower than they were (but have surely reached their bottom), and investment is not so freely available. Basically companies now have to have a good idea, one that works well in this medium and one that can make a profit, sooner rather than in the distant future. This is probably how it always should have been, just a few people got rich and many more burnt on the way.

Hoever any companies that are still being slow to get involved run the risk of a complete outsider moving in and potentially taking a major market share, for example Amazon online has already done just that, initially with books, but now with prettty much anything that can be sent via the post. There are already a lot of opportunities for people to shop online, mainly software, books, videos, CDs, DVDs and similar products that are very suited to this medium. Other businesses are moving into the market, you can now even order your weekly shopping and have it delivered to your door, a definite improvement. There are a lot of security issues and consumers have yet to be entirely convinced it is safe, but it seems as if big business has finally found a use for that beast that is the Internet.

Security

There is some debate about whether submitting sensitive data (ie. credit card details) over the internet is safe. I personally have been shopping online for some time, and as long as you are careful about which sites you use and you use your credit card (which usually provides insurance cover on all purchases) its probably safer than sending a cheque through the post, and definitely safer than giving your credit card details over the phone. There are also various forms of electronic cash that are going to be introduced soon, this should make it even safer as only reputable sites with licences will be able to collect this new e-money.

I prefer to have one card that I use on the net and have a low limit set to reduce any possible fraud liabilities, after thinking about why I did this I have since started also using this card when out in town late, or ordering tickets etc. over the phone. R emember in principle this medium is no different from any other

Generally just beware and use only reputable sites, it's not always easy to tell, but if it's a company you know with a web address to match it should be ok. (eg. www.virgin.co.uk will be Virgin because internet domain names have to be unique). Beware sites that offer free month subcriptions if you sign up, they often say give us your credit card and we will only bill you in a month if you like the site. Fat chance, they will bill and bill every month, relying on you not noticing or not wanting to complain to the credit card company about your payment not being correct (especially if its a dodgy sounding name).

NB: Not that I have tried of course, but that's the word on the net.

Import Duty

Beware that if ordering from abroad HMRC can intercept any goods and add VAT and Duty, this will then result in a handling charge by the Post Office or delivery firm, and also delay your goods. I spoke to the Customs' helpline a couple of years ago and was told there is a £18 limit on tax free goods, anything over that is taxed at full value. However they seemed to have changed the rules (or how they apply them) since then, and the HMRC now provides a webpage on 'Shopping on the internet'. It says duty is liable if:

• Customs duty - if the amount of duty is £7 and over
• Import VAT - if the value of the goods is £18 and over.

It is not clear whether they will include postage in the valuation or not, but VAT is currently 17.5% and Duty ranges from 0 to 10.5% (but is 2/3% for the most common online goods).

NB: Some US sites now have European distribution centres, which means that you will not have to pay any tax. Also if you are downloading software or music that you have purchased, there will be no duty because nothing is being shipped. I do not know the legal position of this, but that's the way it works in practice at the moment.

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