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Three Key Points My eCommerce Business Need to Know About a Subscription Agreement

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When you run an eCommerce business, you need to consider creating agreements with your customers and other companies with your online store. Contracts are legal agreements that help regulate the services you provide as an eCommerce business. They outline how you deliver your online services, especially if you operate using a subscription business model. This article will explain three key points your eCommerce business needs to know about subscription agreements.

What is a Subscription Agreement?

As an eCommerce business, you may offer your goods and services on a subscription basis. Your customers will regularly buy your goods and services on a recurring basis, contributing to your recurring revenue stream.

To offer subscription products or services on a subscription basis, you must have a subscription agreement with your customers. This is a legal contract that outlines the terms and conditions of your subscription services. This agreement will protect your eCommerce brand and those who subscribe to your business.  

Key Considerations for a Subscription Agreement

If your subscription eCommerce business uses subscription agreements, there are key elements to consider.

1. Is a Subscription Agreement Appropriate?

A subscription agreement can be appropriate depending on what your business offers. If you sell electronic goods on your site, a subscription might not be relevant or popular with customers. Indeed, not many people regularly require new electronic gadgets. However, suppose you sell a variety of pet-related goods. In this case, you might offer a subscription for pet food.

Another example is online learning platforms or streaming services. In this case, you might offer:

  • online courses;
  • training programs;
  • music; or
  • video regularly through a subscription.

Ultimately, you need to consider whether a subscription agreement is appropriate for your business. 

2. Is Your Subscription Agreement Robust?

Once you decide that a subscription model works for your eCommerce business, you need to draft a robust contract. Your subscription agreement should include information about your offering and what your customers can expect from you. Amongst other terms, your agreement should include details on the following:

  • how customers can subscribe to your products;
  • how to pay, such as frequency and cost;
  • whether there is a free trial period;
  • whether you are liable for specific issues;
  • how your business collects, stores and shares customer information with third parties;
  • how customers can terminate their subscriptions.

3. How Will You Display Your Agreement?

Finally, you should consider how you will display your subscription agreement. It is illegal to charge your customers on a regular basis without their approval. Accordingly, you must get customer consent before beginning the subscription. 

It is helpful to outline the terms and conditions of the subscription on your website. You should clearly explain what the subscription contains, the price, and other relevant details. This page should be visible to website users so customers can easily access it. Likewise, consider adding a clickwrap agreement on your website, meaning customers would have to click a box to indicate their consent.

Importantly, displaying your agreement clearly can help avoid future disputes. It ensures your customers have realistic expectations of your business’ offerings.

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Key Takeaways

A subscription agreement legally binds your eCommerce business and customers. These agreements contain the terms and conditions of your services, protect your business against liability, and detail your obligations towards customers. If you need help introducing a subscription model for your online business, our experienced eCommerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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Clare Farmer

Clare Farmer

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