subject: The Internet As a Channel [print this page] The Internet As a Channel The Internet As a Channel
Many businesses regard the Internet as a completely new type of channel and are unclear about how it impacts on traditional distribution and commercial agency models. There's a biblical expression which claims that "there is nothing new under the sun" and as far as the Internet goes, there is a great deal of truth in it.
If you regard the Internet as only another route to market which compliments and augments your existing sales infrastructure - even if it replaces existing channels - dealing on the web still falls into one of the three transaction categories discussed in section 1. You're either doing business directly with resellers or end-customers on the net, paying a commission to a web-based reseller in which case it's a representative transaction or simply using the Internet as a base for referrals.
Either way, the prevailing legislation that covers these types of transactions in different jurisdictions applies and in addition, you fall under the auspices of the Distant Selling Regulations discussed in the next section. So, that's the Internet from a structural viewpoint, but what about the Internet as a route to market from a purely commercial perspective?
Brochure Website
A brochure website is designed to present your corporate data to your customers, channel partners, investors and other interested parties. Whereas it will feature products and services and possibly present sales arguments, it is not an eCommerce site or a route to market. It should be regarded as a brand-building and marketing resource that is fundamentally different in its design to a website whose primary function is to sell.
On-line Contracts
For the most-part on-line contracts are no different to contracts that you conclude otherwise. There is something to be traded, an offer, acceptance and a consideration. Where on-line contracts differ from others is in how each of these steps is fulfilled and the obligations you have as a supplier, especially if you are dealing directly with consumers. These obligations are discussed in more detail in the next section on distance selling regulations.
eCommerce Website
An eCommerce website can be seen as:
- A B2B channel if the target customers are businesses
- A retailer if the target customers are consumers
- An agent if it facilitates a sale with a third party supplier on a commission basis
- A direct sales channel if the supplier has set up its own website.
In many instances, such as in the cases of Amazon and Ryanair, for example, the site serves as a channel for direct sales, distributed product sales (which the site owner buys and resells), but also as a platform for the sale of third party products on a commission basis.
Before setting up an eCommerce capability, it is important to be clear on exactly what its purpose is and to be aware of the complex legal obligations of multi-purpose sites. More important however is the site design. Driving traffic to it and converting prospects to customers on the Internet requires specialist knowledge and skills.
Distance Selling Regulations for Consumers
Companies who wish to sell to consumers over the Internet (direct sales) are bound by legislation called Distance Selling Regulations. Basically, the legislation is there to ensure that contracts can be properly and fairly executed at a distance and that consumers are protected in much the same way as they are when they buy products or services in retail outlets.
What the regulations cover
The regulations are there to provide protection to consumers who purchase goods or services:
- by telephone
- by direct mail or mail order
- over the Internet
- through digital TV shopping channels
This list is not necessarily exhaustive as the regulations apply to any situation in which a consumer concludes a contract to purchase without face-to-face contact with the vendor.
Basic obligations of the supplier
It must be possible to conclude the contract within 30 days unless the customer and vendor have agreed to a longer period. If the supplier can't deliver within this time, the customer can cancel the order and is entitled to a full refund. In some cases (for example, supermarkets) suppliers offer alternative and equivalent products if what the customer ordered is not available. This may only be done if the customer has agreed to it in advance. Moreover, when they receive the alternative goods, they are free to decide not to keep them and to return them at the supplier's cost.
Further obligations
Before a distance selling contract can be concluded and legally enforced, the supplier must advise the customer of the following:
- The identity of the supplier, in other words, exactly who the customer is dealing with
- A detailed description of the goods/services
- The price of the goods/services, including tax
- How long this price will be valid
- Delivery details and charges
- Payment methods (and the supplier's address if payment is to be made in advance)
- Details of how the customer can cancel the contract
- If the contract is continuing (eg. a magazine subscription), the minimum length of the contract
- Written confirmation (fax or eMail is acceptable) of all of the above. If this is not provided before delivery of the goods, the contract is not enforceable.
Cooling off
To further protect the consumer, the regulation provides a so-called "cooling-off" period of seven working (not calendar) days. During this time, the customer can cancel the contract without having to give a reason. If the goods have already been received, he/she can return them and the only cost for which they are liable is the return shipping or postage cost.
If written confirmation, as described above, has not been received by the customer on time, the cooling-off period is extended by a further 90 days.
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Further information
The detail provided here is for information only and is not intended to be all-encompassing.
The directive is published in full in all member-state languages on the EU website:
