Social commerce

What it means

Social commerce means selling directly on social networks, where a customer discovers a product, looks at it and buys it without leaving the app. It covers shops on profiles, product tags in posts, sales during live streams and orders placed through direct messages with the seller.

Compared with classic social media marketing, the network is no longer just a source of traffic but the point of sale itself. The customer's decision is shorter and more impulsive, shaped by comments, reviews and recommendations from people they follow.

In legal and tax terms, social commerce is still distance selling, just like an online store. The seller must meet every consumer information duty, issue documents and tax the revenue correctly, regardless of the fact that the order came through an app rather than a website.

How it works in practice

Before launching sales, the profile should give easy access to the seller's details, terms and conditions, the complaints policy and information about the right of withdrawal from the contract within 14 days. Consumer protection rules apply just as they do in a physical shop or on a website.

When working with content creators, social commerce overlaps with influencer marketing. Paid posts and commission links must be clearly marked as advertising, otherwise both the seller and the creator risk a penalty for a misleading commercial practice.

In the books, revenue should be tracked by platform and payment method and regularly matched with payouts from payment gateways. Some platforms report seller data to the tax authority under DAC7, so recorded revenue should agree with what the platform reports.

What to watch out for

When selling to consumers in other EU countries, once the common threshold is exceeded the place of taxation changes and the seller pays VAT by the customer's country, often through the OSS scheme. This is easy to overlook when sales happen informally through messages and posts.

The business depends on the platform's rules, which can change the algorithm, raise fees or block the account. It is sensible to keep an own channel, such as an online store or a contact list, and not rely on a single social network as the only source of revenue.