Marketplace or own store? Setting the legal course for e-commerce start-ups

A few years ago, when I assisted a large online retailer in switching from a marketplace to its own store, I realized once again that this decision is far more than just a question of the business model. After 25 years as an entrepreneur in the digital sector and almost 20 years as a lawyer, I know that the legal choices made here often determine success or failure. The choice between having your own online store and selling via an established marketplace is a strategic decision that has far-reaching legal implications. Both options offer specific advantages and disadvantages that need to be carefully weighed up in order to be successful in the long term.

The legal triangular relationship on Marketplaces

The contractual relationships on marketplaces are complex and require a deep understanding of the legal framework. While there is a clear two-party relationship between the retailer and customer in your own store, a multi-layered legal construct is created on marketplaces. The platform operator, the seller and the customer have different, often interdependent contractual relationships with each other. This complexity requires a well thought-out legal setup, especially when it comes to the design of general terms and conditions and liability regulations. Retailers must not only adhere to the platform’s general terms and conditions, but also adapt their own terms and conditions accordingly. This often means being subject to the platform’s rules, which can lead to restrictions in flexibility. There is also a risk of liability issues if, for example, products do not meet customer expectations or delivery times cannot be met.

Another aspect of the triangular relationship is the dependence on the decisions of the platform operator. Changes in the terms of use or fee structures can have a significant impact on the business. Merchants must be flexible enough to react to such changes. At the same time, a marketplace offers access to a broad customer base and established logistics solutions, which can be particularly attractive for start-ups.

General terms and conditions and liability: the hidden challenges

Drafting legally compliant GTCs for marketplace merchants is a particular challenge. The T&Cs must not only harmonize with the platform guidelines, but also meet all legal requirements. Coordination with the Marketplace T&Cs and the regulation of warranty and reversal are particularly critical. Marketplace retailers must ensure that their T&Cs do not contain any clauses that contradict the platform’s guidelines. This may mean that certain provisions on warranties or product returns have to be adapted in order to avoid warnings. In your own store, on the other hand, you have full control over your T&Cs, but must also take full responsibility for their legal security. It is important to regularly consider legal updates and ensure that all clauses comply with current legal requirements.

Another important point is liability for product defects or delays in delivery. On a marketplace, it can be difficult to clearly define who is liable in the event of a problem – the retailer or the platform? This requires precise contractual regulations and clear communication with the customer.

Trademark law and copyright law: protecting your own identity

Trademark law plays a central role in e-commerce, especially on marketplaces. The risk of trademark conflicts is significantly higher here than in your own store. On marketplaces, it can quickly happen that similar or identical brands are offered by different retailers, which can lead to confusion among customers. At the same time, marketplaces often offer their own protection mechanisms, such as programs for monitoring trademark infringements or tools for enforcing trademark rights. In your own store, on the other hand, you are responsible for protecting your brand and taking action against possible infringements.

Special care must be taken with product descriptions and images. While you have full control over your content in your own store, you often have to grant additional usage rights to the platform operator on marketplaces. This may mean that you have to assign certain rights to your images or texts in order to be able to use them on the platform. This assignment can have a long-term impact on your brand strategy and should be carefully considered.

The administrative and legal effort in comparison

Operating your own store means more legal responsibility, but also more control over the entire business model. You can design your processes individually and have the freedom to develop your brand according to your own ideas. However, this also requires more administrative effort in terms of complying with legal requirements and maintaining the website infrastructure. This also includes the regular updating of data protection guidelines and cookie policies as well as the management of customer inquiries regarding data protection rights.

Although marketplaces offer established structures and a wide reach, they require constant adaptation to new platform guidelines and can be limiting in terms of flexibility. Retailers need to keep up to date with changes and adapt their processes accordingly. This requires not only time and resources, but also a good understanding of the ever-changing e-commerce landscape.

Conclusion and practical recommendation

The decision between a marketplace and your own store is a strategic decision with far-reaching legal implications. Both options offer specific advantages and disadvantages that need to be carefully weighed up. As a lawyer with many years of experience in e-commerce, I recommend a thorough analysis of the legal requirements and the individual business objectives of your company.

Do you need support with this important decision? With my experience both as an entrepreneur and as a lawyer, I can support you in structuring your e-commerce business in a legally compliant manner. Let’s work together to develop the optimal legal structure for your business model and ensure that you are successful in the long term.

I offer comprehensive consulting services to help you navigate these complex decisions – from drafting customized T&Cs to strategically planning your brand and copyright strategy in the digital space.