Products and Services

What can I sell over the Internet? What products or services are prohibited?

Practically anything that can be sold can be sold on the Internet. A quick glance at any major retail or auction website shows that an ecommerce site can be as eclectic and as busy a selling enterprise as the world’s largest shopping mall or flea market. An ecommerce retailer needs to ensure compliance with laws and regulations just as any other retailer.

Where a website is accessible anywhere in the world, the entrepreneur is also an exporter. Thus, the business must comply with the laws and regulations of the jurisdiction in which the enterprise is based, as well as those of the jurisdiction into which products are sold. (See, generally, “What body of law governs my ecommerce site?”)

Certain kinds of products, whether on the Internet, in a brick -and -mortar enterprise, or in a booth at a fair, are subject to government scrutiny or regulation, both within the United States and outside its borders. Many governments take very seriously the sale of certain kinds of products considered dangerous, such as firearms and explosives, products considered harmful or potentially injurious, such as alcohol and tobacco, or products contrary to prevailing public policy, such as threatened or endangered species and products made from them, and products and services directed to children. Any retailer dealing in these kinds of products needs to ensure compliance with local and federal licensing requirements, prohibitions, and other rules and laws dealing with commerce in these heavily-regulated categories of goods.

Alcoholic Beverages
The sale and distribution of alcoholic beverages is heavily regulated in the United States., although alcoholic beverage-related paraphenalia and collectibles, or alcoholic beverage-flavored food items, are not. Sellers must take strict precautions to prevent selling alcoholic beverages to minors and, in most U.S. states, sellers must be licensed. State licensing rules and regulations are varied and complex. Even if you are licensed to sell alcoholic beverages in a particular state, you need to make sure that products are not sold to buyers in states in which you are not licensed.

Some non-US jurisdictions do not regulate the sale of alcohol as heavily as does the U.S. Many of the large international web portals prohibit the sales of alcoholic beverages through their US sites, but allow them on their non-US sites.

For U.S. federal policies and regulations concerning the sale of alcoholic beverages across state lines, see the information and policy statements posted on the website of the US Alcohol and Tobacco Tax and Trade Bureau of the US Department of the Treasury (the “TTB”) at www.ttb.gov/alcohol/index.htm. For state alcoholic beverage control licensing requirements and regulations concerning sales, see the TTB’s listing of alcohol beverage control boards, www.ttb.gov/alcohol/info/faq/subpages/lcb.htm.

Wine
Sending wine by U.S. mail without an appropriate license is a Federal crime. Most states prohibit consumers from making direct shipments of wine, and most states severely limit the ability of retailers to ship wine.

It is possible to legally ship wine among various states. If you become licensed in a particular state, then you may be able to sell wine on a web site, in limited quantities to buyers in certain jurisdictions. Some U.S. states allow wine to be shipped directly to individual buyers. Other states preclude direct shipment but allow sellers to ship wine to licensed wholesalers and retailers in that state. Most U.S. states require individual buyers to be at least 21 years old.

If you are interested in ecommerce wine sales, you will need to become familiar with this complex network of state regulations. For a state-by-state comparison of U.S. wine sales restrictions and policies, see the Wine Institute’s site: www.wineinstitute.org/shipwine/analysis/state_analysis.htm.

Animals and Animal Parts & Products
Various US federal and state agencies regulate the sale of animals and wildlife, as well as the sale of animal parts or products made from animals. The U.S. Fish and Wildlife Service and state fish and wildlife agencies regulate the sale, transport, import and export of threatened or endangered species as well as certain other animals.

All importers or exporters of wildlife must file declarations with, and become licensed by, the US Fish and Wildlife Service (see the information at the U.S. Fish & Wildlife Service Law Enforcement Office website (http://www.fws.gov/le) as well as with state regulatory agencies.

Sales of live animals within the United States may be subject to US Fish & Wildlife regulation and can require permits. Sales on websites may also require permits from the state in which you are operating your ecommerce business.

Certain kinds of live animals may be sold without regulation, such as tropical fish, and live insects or worms used as bait or feeder food for pets or as gardening aids, subject to local health and safety regulations that may govern the storage and handling of these animals, and local requirements regarding their shipping and transport.

Sales of animal products, such as pelts, skins, furs, tusks, ivory, bones, or other animal parts are heavily regulated and frequently prohibited altogether, particularly the sale of parts threatened or endangered species. Sales of these kinds of products may be regulated by the US Fish & Wildlife Service, the US National Marine Fisheries Service (www.nmfs.noaa.gov), and various state agencies.

Nevertheless, even if you are able to sell certain animals and animal products under state licenses, and despite your compliance with US Fish & Wildlife policies, your ecommerce business may be subject to scrutiny beyond that placed on a brick-and-mortar business. Because state or local regulators cannot easily verify the conditions under which your business stores and transports animals or animal products, you may be expected to provide additional assurances to local regulators. ISPs and other internet business services may also expect these kinds of assurances or guarantees from a web-based business. One well-known ecommerce marketplace requires that a seller make certain guarantees about safe packaging and prompt shipping to customers.

Plants
The United States government regulates the sale, import, and export of certain kinds of plants – particularly those with an endangered or threatened status. The US Government and various state governments also prohibit the sale of certain types of plants and seeds. See information posted by the US Department of Agriculture for more information: www.aphis.usda.gov/ppq/weeds

Food Products
The US government and state and local governments regulate the sale of food products. The US government maintains a resource with links to various government food safety informational web pages, as well as federal and state government agencies that deal with the regulation of food products. See www.foodsafety.gov. The US Department of Agriculture maintains a site with links to federal and state regulations and directives governing export, import, and sale of meat, poultry, and other food and agricultural products. www.fsis.usda.gov/Regulations_&_Policies/index.asp.

Firearms
The sale of firearms is heavily regulated in the U.S., in the European Community, and in most other industrialized countries. The Bureau of Alcohol, Tobacco and Firearms of the U.S. Department of Justice (the “BATF”) supervises and enforces U.S. regulations prohibiting or limiting the sale and distribution of guns, rifles, automatic weapons and other forms of firearms and firearm paraphernalia. Firearms resellers must be licensed by the BATF and, under U.S. federal law, it is unlawful for any licensed importer, licensed manufacturer, licensed dealer, or licensed collector to sell or deliver any firearm or ammunition to any person if the person's purchase or possession would be in violation of any state law or local ordinance applicable at the place of sale or delivery. The BATF provides a lengthy set of FAQs and other guidelines on its website, concerning the sale and distribution of firearms, at www.atf.gov/firearms/faq/faq2.htm#a1.

Materials Directed to Children – Children’s Online Privacy Protection Act
You need to be particularly careful if you are posting games or other materials online that are directed to children. There are special rules promulgated in the Children's Online Privacy Protection Act ("COPPA", 15 U.S.C. 6501 et seq.), which pertain, to privacy policies and other mechanisms of a site, if it is collecting information from children under age 13. 

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