In order to sell products on Amazon, you don’t have to create an LLC or you don’t need a business license. After opening the Amazon seller account, you can immediately start selling products under your name as a sole proprietor. So, you don’t have to worry about opening an LLC to sell products at Amazon.
Key Takeaways
- Usually, it is not mandatory to have an LLC or business license to sell products on Amazon
- In most cases, the products that are sold on Amazon are consumer products that don’t require the government’s approval
- Forming an LLC is the best way to protect a business as well as personal assets from various problems
- If you plan to sell wholesale products on Amazon, then you will need a business license and sales tax permit
- If you are a private label or retail arbitrage seller then you won’t need any business license to sell products on Amazon
Do I Need An LLC To Sell On Amazon?
No, you don’t need a business license or LLC to sell products on Amazon or any other online platform. Here, the main reason is most of the products that are being sold on Amazon are not Federally regulated. Products sold on Amazon are consumer products that don’t require the government’s approval. Therefore, if you are selling products online or on the following marketplaces then you don’t need to register a business or have a business license –
1. Facebook
2. Shopify
3. Amazon
4. eBay
5. Etsy
6. Craigslist
You can buy and sell products on any of these sites without forming an LLC or business license.
When Is The Right Time To Open An LLC For Amazon Business?
It is true that you don’t need an LLC to sell products on Amazon. However, if your Amazon business grows then you have to consider whether you should form an LLC to safeguard your business. Forming an LLC is the best way to protect a business as well as personal assets from various problems. So, if you have an Amazon seller account then you should consider forming an LLC when –
1. You are serious about growing your Amazon business
2. Your sales have been steadily increasing each month
3. Products that you sell can cause injuries like sports items, health and wellness products, etc.
4. You want to keep personal finance separate from business
5. You have business partners
If any of the above conditions apply to your business then it will be best for you to create an LLC right away. Forming an LLC is not as difficult as many of us think. So, you should form an LLC and it could protect you in the long run.
Do I Need A Business License To Sell On Amazon?
No, you don’t need a business license to sell on Amazon. While opening a seller account you don’t have to submit any business license. However, to do online business you might have to require a business license or permission as per your state or local government. Moreover, if you plan to sell wholesale products on Amazon, then you will need a business license and sales tax permit. So, before opening a wholesale account on Amazon you must have this documentation to confirm that you have a legitimate business. But if you are a private label or retail arbitrage seller then you won’t need any business license.
How To Create A Seller Account On Amazon?
Creating a seller account on amazon is very simple. Follow the below steps –
- First, open a browser on your computer
- Now visit https://services.amazon.com
- Then click on the heading “Become an Amazon seller”
- Next select seller type:
- Individual seller
- Professional seller
- Next, enter your email
- After that type a strong password and select “Create a New Account”
- An OTP will be sent by Amazon to your mail
- Next type the OTP on the required field
- Then choose your ‘Business location’ and ‘Business type’ –
- State-owned business
- Publicly-owned business
- Privately-owned business
- Charity
- None, I am an individual
- Then enter your personal information
- Now choose your marketplace
- After that enter your billing information
- Next, add the information for your product(s) and Amazon store
- Finally, validate your address to complete the process
FAQs About Do I Need An LLC Or Business License To Sell On Amazon
What Are The Advantages Of An LLC?
Some advantages of an LLC are –
1. Limited liability protection
2. Pass-through taxation
3. No ownership restrictions
4. Versatile tax status
5. Flexible profit distribution
6. Minimal compliance requirements
Can You Sell Products Without An LLC?
Yes, you can sell products without an LLC. In fact, you don’t need an LLC to start or run your online business. After establishing your online business, you can form an LLC any time you want. An LLC would be smarter risk management for you when your business will grow.
Do I Need An EIN To Sell Products On Amazon?
No, you don’t need an EIN to sell products on Amazon. EIN stands for Employer Identification Number and you will need EIN when you will be forming an LLC.
Do You Need A Seller’s Permit To Sell On Amazon?
No, you don’t need a seller’s permit to sell on Amazon. This is because you are selling online and you are not selling any Federally regulated products.
Do You Have To Be A Registered Business To Sell On Amazon?
No, you don’t have a registered business to sell on Amazon. Amazon doesn’t require its sellers to register their business.
References:
1. https://www.junglescout.com/blog/do-you-need-llc-to-sell-on-amazon/
2. https://infinitefba.com/do-you-need-a-business-license-to-sell-on-amazon/
Last Updated on October 29, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.
