Do I Need A Business License To Sell On Amazon?

11/28/2022 16:08:26 +0000
If you're looking for a way to make money, and have considered selling products on Amazon, then there are numerous things you'll need to get in order before you can begin making money.
However, one of the most commonly asked questions by people who are looking to begin as a seller on Amazon is whether or not you need a business license in order to sell on Amazon.
So, if you want to learn whether or not you need a business license to sell on Amazon, the other requirements for selling on Amazon, as well as more information about business licenses, then keep reading, as we'll provide you with all of the details you need to know to get started as an Amazon seller!
What Is A Business License?
If your business is new, and you've never heard of a business license before, then it might come as a surprise that some businesses are required to have a license before they are able to sell things, if you're not sure what this license is, then allow us to explain.
A business license is a form of legal document which is issued by either the state, or a different government body, which confirms that the business you run is entitled to operate in a specific business activity in that particular city, region, or state.
Essentially, it's governmental approval of what you're selling as a business.
If a business is found to be operating without a business license, governmental agencies are able to impose penalties, and even completely close businesses, which means it's in your best interest to make sure you have a business license if you're required to do so.
However, not every business is legally required to have a business license in order to operate.
Whether or not you need a business license is down to the type of business you have, as well as what you're selling, where your business is located, and the scale of your business.
Depending on each of these factors, you might be required to have a local, county, state or even federal license, or you might not be required to have a license at all!
What Is The Point Of A Business License?
Ultimately, having to apply for a business license might seem like a hassle, however, they exist for good reason.
Requiring a business to have a business license in order to operate helps to ensure customers that they don't get cheated or scammed out of their money, and it also means that businesses have to abide by the laws and regulations regarding health and safety too.
So, having a business license is necessary for most businesses that want to operate legitimately.
Do I Need A Business License To Become An Amazon Seller?
So, if you're going to be operating as an Amazon seller, are you required to have a business license at all?
Thankfully, the answer is mainly no! If you're going to be selling your inventory online on an e-commerce platform, then you won't need any approvals from the government.
Although all of your sales on Amazon will occur online, you will still be under regulation from the state laws of where your business is registered, as well as the municipality or country in which it originates.
So it ultimately depends on your state's laws and regulations whether or not you need a license to sell online.
As stated by the IRS, depending on where you live, and your business originates, you might be subject to state and local taxes, alongside other possible regulations, which might include the need to apply for a business license in order to sell on Amazon.
As standard, e-commerce platforms such as Amazon are subject to the same sort of licensing requirements as physical brick-and-mortar stores are, and these requirements do tend to vary depending on the state, county, or municipality.
So if you have any plans to begin selling on Amazon, you should always check what the laws and regulations in your state say in regard to whether or not you'll be required to have a business license.
As a general rule though, you won't need any form of business license in order for you to sell on Amazon, so if you want to become an Amazon seller, you shouldn't have to deal with the hassle of applying for a business license in order to operate.
However, it is always worth verifying with local state laws and regulations in order to clarify whether a business license is going to be necessary.
How To Get Started Selling On Amazon?
Starting on Amazon as a seller might seem daunting, but for the most part, it's incredibly simple, so don't stress too much about getting your business established, here's how you can get started.
The first thing you should consider is what you want to sell on Amazon.
Many people tend to find a product that already exists and then sell it on Amazon, whereas large companies will produce their own products and will have an Amazon storefront.
You also need to decide which plan you're going to use, the individual plan charges $0.99 every time you sell something, whereas the professional plan is $39.99 each month, so it depends on how much money you think you're going to be making!
From here, you can create your Amazon seller account by providing the required information, and you're ready to begin your journey as an Amazon seller.
To summarize, whether you need a business license or not in order to sell on Amazon is dependent on the county, state, municipality, and federal laws.
Generally though, Amazon doesn't require its sellers to have a business account in order to become a seller, just check state laws before you begin!
About the Host
Sophie Howard is the founder of Aspiring Entrepreneurs, a community designed to help people develop the skills and confidence to build a business and a life that serves them. Sophie began online in 2013 with an Amazon firm, which she sold for more than $1 million in 2015.

Sophie has lectured on stages all around the world, encouraging and teaching other ambitious entrepreneurs. She has established instructional programs educating thousands of students how to sell online, in addition to releasing over 1000 products.

Sophie has also written a book titled "Aspiring Entrepreneurs: A Guide to Finding Your Best Path to Financial Freedom."
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