Distance trade

21. November 2024

The basic idea of distance trade is to enable buyers and sellers of goods and services to communicate and conduct trade via a selected medium, despite the geographical distance. Based on the selected form of distance trade, information about the goods and the purchase request are ultimately exchanged. A common form of distance trade today is e-commerce.

Compared to bricks-and-mortar retailing, there is no physical location where inventory is sold by the manufacturer to the end consumer. Accordingly, the product cannot be personally inspected or tested before purchase. Before making a purchase, the customer can only obtain a picture, a description of the product from the seller, possibly a review of the product by other customers, or a description over the phone.
The legislator provides special consumer protection rights in §§ 312b, 312d and 355 BGB (German Civil Code) (distance contract).

Consumer protection rights in distance trade

Certain consumer contracts provide for a limited right of withdrawal for consumers. If the customer does not like the goods, he can return them within 15 days, for example. After the buyer has selected his goods, he can inform the manufacturer of his purchase request in various ways. The order can be placed in writing, by telephone or via other electronic means.
Once the order has been placed, the seller either waits for the customer to pay before delivering the purchased goods to the customer, or the goods are delivered first and then the customer pays (purchase on account). The seller decides on the sequence. In contrast to bricks-and-mortar retail, the customer can have the goods delivered to the location of their choice via a shipping company.

Consumer requirements regarding inventory

A customer expects to receive exactly what is offered in advertising material when trading at a distance. Compared to stationary retail, a customer often has no concrete idea of a product when entering a store, but expects to find it in the store in exactly the same way. Instead, however, it is possible to switch to substitute goods.

The requirements for the actual availability of goods are therefore significantly higher in distance trade than in stationary retail. In distance trade, inventory must be available in a certain quantity and at a certain time, according to the customer’s request. Warehouse management is easier when the entire inventory is collected in a central distribution center.

For more information on distance trade, see Distance Trade – Forms of Distance Trade.