Times have changed and businesses are finding new ways to connect with their customers. One function that is gaining ground is the Eshop without a physical store. Below we will see in detail the legal and tax requirements as well as the advantages and disadvantages of such a solution.
What are the legal requirements for eshops?
In all forms of business except sole proprietorships, e.g. IKE, OE, SA, LLC, there must be a company headquarters. So if you don’t want to rent a store, the eShop will be registered to your sole proprietorship based on the existing store.
Option of KAD for eshop without a physical store
You don’t choose any CAD you like. Each KAD corresponds to sales of specific items that your eshop will have and it is good to consult your accountant. Nor is there a general e-commerce CSR. The VAT is determined by the commercial object of the eshop.
Does an e-shop need to have a registered office without a physical store?
If there is an existing physical store there is no problem. The eshop can register its headquarters at the same address. But what happens to an eshop business without a physical store that wants low costs? Then you can declare your house as the headquarters of the eshop if you do not sell physical products but only intangible services. If there are physical products then there must be some warehouse even a small one. Of course it must have a different address from the entrepreneur’s home.
The concept of Eshop without a physical store
The Eshop without a physical store has the ability to take advantage of new technologies to create easy and fast access to the company’s products and services and for the consumer to see their products online at any time of the day from any place shop.
Advantages and benefits for consumers and the entrepreneur
Consumers can save time while choosing between numerous products and services with a simple click. The power of technology allows Eshop without a physical store to offer a comfortable and valuable shopping experience and multiple options to their customers since there is no need for the physical presence of the goods.
A big cost which also saves a eshop without physical store is that of rent. Of course this money should be given to ad on google or facebook advertisement so that the electronic shop to be successful.
Many times in eshops without a physical store due to the absence of rental costs and other expenses that we will mention below, customers can benefit from even lower prices that online shops can have.
Challenges and problems of Eshop without a physical store
Every new business venture has its own challenges, and e-commerce is no exception.
Dealing with loss of tangible contact with customers
Without a physical store, tangible customer contact is limited. This can make trying to gain their trust more difficult. Therefore, high product quality, reliability and outstanding customer support are more important than ever.
We must understand that when entering the physical store, the customer is sure that he will pay and get what he wants, something he is not absolutely sure about when he first enters your online store. With the right Branding but also with the right construction of the e- shop you gain the trust of customers and create a sense of security for them. Within the product, multiple high-resolution photos, videos and detailed texts help in this direction.
Something to think about is that 70% of customers trust more an eshop that has a physical store, wherever it is because it feels safe.
Resolve reliability and delivery issues
Eshop commerce requires successfully solving reliability and delivery issues. By scheduling accurate deliveries, keeping your website reliable, and providing resources so that customers can easily contact you, you can overcome these challenges.
It is important to cooperate with a transport company and a courier company that can quickly and reliably deliver your orders. What’s the point of selling without delivering your goods.
Bonus tip: Cash on delivery is important in Greece, so you have to ensure that you have cash flow and they come quickly enough!
Financial analysis of Eshop without a physical store
In today’s technology world, businesses without a physical store, or Eshops achieve success . Let’s see below some things related to finance and accounting.
Costs and profits
An entrepreneur operating as an Eshop does not face the same level of expenses as a physical store. Eshops can have more competitive prices, reduce operating costs and provide more offers to customers.
Such are the costs
- Cleaning costs of the shop
- Personnel costs for customer service (the more success there is, the more personnel you require, while in case of success of an online shop there is no such exponential increase in personnel)
- Municipal taxes
- Daily expenses (e.g. lamps, toilet paper, office repair, etc.)
How is an eshop taxed?
For sole proprietorships, taxation starts at 9% for profits up to 10,000 euros, reaching scales of up to 44% for profits over 40,000 euros. In more detail: 9% for profits from 1 to 10,000 euros, 22% for profits from 10,001 to 20,000 euros, 28% for profits from 20,001 to 30,000 euros, 36% for profits from 30,001 to 40,000 euros, 44% for profits over 40,001 euros
The advance tax is 100%, but for the first year of operation it is reduced to 50%. However, for new sole proprietorships, for the first 5 years, as long as the turnover does not exceed 10,000 euros, the tax rate is 4.5%. If it is a company (Sole Partnership, Limited Partnership, LLC, I.K.E, SA, etc.), the tax rate for 2023 is 22%, regardless of profits. For EPE, IKE and SA there is an additional 5% for dividend tax of company members (on pre-tax profits). The advance tax rate is 100%, which for the first three (3) years of operation is 50%.
Dropshipping is the popular method of selling products without the need to keep inventory and ship the products yourself. The eshop supports in terms of “showcase” for the products. The supplier undertakes to send it where the customer ordered it. The supplier does not undertake marketing, i.e. does not promote the product and does not attract customers, which the eshop owner does. Usually the products are provided by the supplier to the eshop via XML which updates the prices and stocks in real time.
In Greece, dropshipping is the only alternative to sell physical products from your home-based eshop. Something very important in Greece is that you must provide the tax authorities with a certificate from your supplier, which it is not certain that they will accept.
Prospects and future of the Eshop without a physical store
Advances in technology and globalized competition have increased the need for online stores, or Eshops, to step up their action in this direction. Every year there is a 15% increase in e-commerce!
Trends and developments in digital commerce
The artificial intelligence , personalized experience, and social commerce platforms are some of the key trends expected to dominate the future of digital commerce. A new world in the field of eshop but also ads using AI opens and will make the purchase even easier via eshop.
Possible developments and changes to the model
In the coming years, we are likely to see changes in the Eshops model such as the increasing role of interactive stores and a focus on human contact. An effort made by META is the creation of the METAVERSE so that the experience is very real.
Smart solutions for 21st century entrepreneurs, Eshops without a physical store are growing rapidly. It is an alternative that lacks some traditional challenges, but brings new ones.
The challenges and benefits of Eshop without physical store
Without traditional infrastructure, these e-commerce centers are more flexible and respond faster to market changes. However, that doesn’t mean they don’t face challenges of their own, such as the need for a great digital presence and delivery capabilities.
Prospects and continuity
The challenge of the future for Eshops without a physical store is to evolve alongside technology and consumer demands, without losing the personal touch and warmth that a physical store offers.