In theory, setting yourself up to sell products on the internet is the easiest thing in the world. Once you’ve created the product, you upload it to a 3rd party platform that will handle all the sales and deliveries automatically, and you just sit back and watch the money roll in. If only it were as simple as that. But why would  a school want to do something like that anyway?

I often feel that all the rules and regulations, while being well-intentioned... ... really serve to divert me from what I actually need and want to do! Another hidden cost of doing digital business.

What could you sell, and why?

When I was Head of ICT back in 1990, I needed to raise money for a scanner. In those days, a scanner cost around £300. According to the Historic inflation calculator that is around £650 in today’s money. Quite a lot when you consider that you can buy a multifunction printer in a supermarket for £30. And also quite a lot when you consider that it was nearly a third of my annual budget to run my department.

I raised the money by writing a word processing manual which, according to many people, was better than the official manual, and sold it for £5 a copy. It was printed, collated and bound by the school’s reprographics department. I publicised it like crazy, and there is even a photo of me in the local paper under the headline “Manual labour”! When I received people’s orders, I kept their details on file so I could let them know when there was an update or a new product.

A few dangers of digital business

What has changed? Obviously, dispatching a product is much easier now. Using a third party platform, you don’t have to do much more than upload the file once you’ve created it. But what is different is the collection of rules you have to abide by. Here are just three of them that you need to know about if you want to do the equivalent of what I did back in 1990 in order to raise cash for your school. Perhaps you have created an app or a really good guide to how to create apps, and want to sell it in order to raise money to buy a 3d printer or whatever. Here’s a quick glimpse of a few of the things you need to know about if you’re in the EU. By the way, I don’t claim this to be comprehensive, and I’m not a legal expert so don’t take this as advice. And with that standard sort of disclaimer out of the way, here goes.

Data protection

Since 1998 anyone handling people’s personal details in a computer system should register as a data controller under the Data Protection Act. I imagine there are sensible thresholds, and that if all you are doing is storing friends’ and family’s email addresses this doesn’t apply. But as soon as you put something on the school website like “Sign up to our Digital Doings newsletter to be informed of our great products”, or even as soon as you decide you’d like to store the details of people who buy your “Apps made Easy” ebook, you or someone in the school needs to think about the Data Protection angle.

Now, you may think, as a delivery person told me once when I informed him that he had brought the wrong thing, “Ain’t my problem, mate”.  You go on to tell me: “The school is registered already, so that it can send emails to parents and store data about the kids”. However, the Data Protection Act is pretty clear that data collected for one purpose can’t be used for another. Try it if you like: ask the school secretary to give you a database of all the parents’ email addresses, and then send them an email about your wonderful guide to app-making. Then see how long it takes for the complaints to come in and for a phone call from the Information Commissioner’s Office.

Cookies

Two or three years ago I, along with many others, was tearing my hair out trying to comply with the EU cookie law, which states that you have to tell your website visitors that cookies are collected, what they do, and giving them the option to opt out. It was some extra administrative and technical hassle that we could have done without. Now, if your school has a website then, presumably, compliance with the cookie law is not your problem. But if you decide to set up a separate microsite selling your “Apps made Easy”, then it will be.

The new VAT law

The new rules on VAT mean that selling digital products has suddenly gone from being a fairly simple, straightforward and almost mindless activity to being a potential nightmare. Many businesses are simply calling it quits, and even I am on the brink of withdrawing the ebooks on the ICT in Education website. I have explained the new rules and how it may affect me – and therefore you, if you are selling or thinking of selling digital products – in the article Our ebooks may be discontinued. Read it and weep (but leap up in glee when you get to the bit about a 50% discount!). At least I still have my consultancy and public speaking work, and the option of turning completely to printed books. I feel really sorry for the people who have built up digital-only businesses, in some cases literally from their kitchen table. (Many of the people affected are young mothers trying to supplement the family’s income while they are not employed in the legal sense.)

What this amounts to

If you or your students are thinking of setting up a digital shop, these are the kind of hidden costs of business you and they need to know about. An extra hidden cost is that you have to be constantly on the alert for changes in the law, and a further hidden cost is that the people and organisations you need to rely on are not always reliable. For example, I knew about the coming change in the VAT rules at least a year ago, but because a lot of third party platforms for selling digital products have only just started to think about it, there was not much I could do about it anyway.

So it seems to me that if you or your students are thinking of selling ebooks or other digital stuff, you really need to ask “What if…?” By definition you don’t know what kind of rules might change, so there’s no point in trying to be specific about tax rates, data regulations or anything else that you may think of. But what you can do is ask: “What if a major new legal requirement came into force? Do we have the resources to deal with it? If we had to stop selling this product, would it be a major disaster? Is there a way we can spread the risk, or outsource it completely?”

Even if you’re not thinking of setting up an online store, I think many theoretical assignments given to students would be rendered more realistic were these considerations taken into account.

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