How to start an e-commerce business
E-commerce industry is currently booming all over the world. Opening an e-commerce company in Germany is a great way of starting a new business or taking your existing business to the next level. In this article we are going to tell you what is required to start an e-commerce business (online store) in Germany and what you should consider and pay attention to. Some of the offered solutions can be realized even without your personal presence in Germany. If you are wondering how to start an e-commerce business in Germany, please read on.
Watch our video on how to start an e-commerce business in Germany:
Opening an online shop in Germany
Alright, let’s see what important things you need to take care of when you want to start an e-commerce business (online shop) in Germany. Please note that some steps can be fulfilled parallel to the others or in a different order.
1. Choosing a business model
You need to decide how your business is going to work. Here are some of the main options frequently chosen for e-commerce:
- Own manufacture, storage and delivery. In this case you take care of the manufacturing process yourself. Then you need to store the goods and organize delivery to the end customers using your own resources.
- Own storage and delivery. This way you store your own-produced goods or those produced by third parties and then organize the delivery to the end customers.
- Fulfillment services. Fulfillment service providers store, pack up and ship the goods for you, so you don’t need to worry about finding a warehouse and organizing delivery.
- Private label. With this option you find a manufacturer that produces goods for you and puts your business name, brand or logo on them. This way you don’t need to do the manufacturing yourself but get products to be sold under your own private label. However, as a rule, you need to take care of the delivery yourself.
- Drop-shipping. With this model you sell products of another supplier through your online shop. Basically, when choosing drop-shipping in Germany you receive orders from customers, then buy the products from the supplier, then have the supplier deliver the products to the customer. In this case you neither need your own manufacturing facility and warehouse nor to take care of the shipping.
- Private label drop-shipping. As it is probably obvious from the name, this option combines two previous models. This way you get products manufactured under your own name and don’t have to manage the shipping yourself.
2. Choosing a platform
There are several options as to where to sell your products. You can either choose one of them or combine several, especially as your business grows. Here are the main options:
- SAAS store, which stands for Software as a Service. This option allows you construct your own online store on one of the platforms offering such a service. You pay a fee for using the service and the process is usually relatively simple.
- Your own online shop. In this case you create and manage your own website where you can sell the goods. As an option, to create your online shop in Germany you may use open source software that is free to download, however you need to remember that there would also be costs for hosting, development, customization etc.
- Online marketplaces, such as Amazon or eBay, are another way to sell your goods online.
3. Registering a company
When it comes to starting the business itself, first of all you’ll need to register a company in Germany. In most cases, a foreigner doesn’t require a residence permit in Germany to register a company and be a shareholder and a managing director. Nexus-Europe GmbH takes care of correctly preparing the documents and registering the company in accordance with all German regulations. In one of our articles you can learn about the challenges that foreign entrepreneurs face when registering a company in Germany.
4. Obtaining tax and VAT numbers
This step is essential in starting a business activity, however not as simple as one would wish. Tax authorities check each application individually and usually contact the applicant several times with clarifying questions. When you register a company in Germany through us, our experienced partner tax adviser takes care of the tax and VAT numbers application and the correspondence with the tax office.
We have a detailed checklist of things that need to be done after a company is registered. In this article we’re going to mention one more important point that should be added to the list when it comes to an online shop in Germany.
5. Taking care of legal requirements
Don’t forget to draw up the required legal documents and put them on your online store:
- Imprint (Impressum)
- General business terms and conditions (Allgemeine Geschäftsbedingungen or AGB)
- Cancelation policy (Widerrufsbelehrung). As a rule, the clients of online shops have a right to return the goods within 14 days after purchase without giving reasons, and the shops are obligated to notify the clients of that.
When we are approached by companies to establish an e-commerce business, we help them choose a business model and form a company in Germany for them. Depending on the chosen model, we help find warehouse rooms or a production facility for private labeling providers. We find and equip the office, obtain tax, VAT, EORI numbers. On your request, we can assist you with finding a provider that can either build your own e-platform or help you establish sales through eBay or Amazon. As a result, you get a business in Germany ready to be launched "right now". If you’d like to know how to start an online store in Germany in your specific case, please get in touch!
During over 20 years of experience in Project management Nexus-Europe GmbH has helped more than 7000 customers from all over the word. At your disposal there are experts in different fields: economists, lawyers, tax advisers, strategists, business consultants. Because all projects are guided by certified Project Management Professionals (PMPs), you get a working business in Germany and ensured quality and performance. On time and at the specified cost.
We also have other turn-key solutions such as starting a transport company or a restaurant in Germany and many others. On our website you’ll also find a lot of other useful information on opening a business in Germany and business immigration.
This document (and any information accessed through links in this document) is intended for general informational purposes only and is not a substitute for professional advice. Each situation is unique and professional advice should always be obtained before taking or refraining from any action.