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Do I Need A Business License To Sell On Amazon
In most cases, you need a business license to sell crafts. There isn’t one simple answer, as whether or not you need a business license depends on several variables, such as where you operate your business, how you operate it, and more.
Do You Need A Business License To Sell On Amazon?
If you want more in-depth answers and a guide to other laws you need to follow as a craft business, you can download:
Many jurisdictions will require you to have a business license if your goal is to make a profit. So if you consider your craft business a “business” and intend to generate income from it, there’s just no way to do it, you’ll probably need a business license.
There are many handicraft businesses operating without proper business license/permit, not properly registered, infringing trademarks/copyrights etc. That doesn’t mean it’s legal or that they won’t get caught.
Government officials are doing their research. They may stumble upon your business online and decide to visit your home office to make sure you have the proper licenses/permits and are properly following regulations.
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Someone may also complain about your business. It could be a farmer’s market shopper who notices you don’t have the proper permits or doesn’t think you made your cupcakes in a sanitary kitchen with a valid health permit. Maybe your neighbor is tired of cars parked in front of their house and always seeing people coming and going from your place. Or a competitor may decide to complain because they feel you didn’t jump through the same hoops they had to jump through to get their business set up properly.
Being caught without the proper licenses and permits or registration can result in hefty fines. You can’t expect mercy because you’re a small business and only sell a few products a year.
You are more likely to have a business license to sell at craft shows. You can go through the list below to find out if your business requires a business license, and if it does, you definitely want to apply for one before applying and selling at craft shows.
The craft show organizer may check to make sure you have the proper business licenses, permits, and tax ID number before they accept you as a vendor.
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As explained in HANDBOOK SALES LAWS, each state/province will have its own rules that you must follow, which vary depending on where you operate your business and where you sell your products (for example, you only sell in your state to customers located or You are shipping products outside of your state).
Even if the craft show organizer doesn’t require proof of the appropriate licenses and permits, you’ll want to make sure you have them for each craft show.
A city inspector might stop by your booth and start asking questions about where you operate your craft business, how you label your products, whether you charge sales tax, etc.
You might even get a competitor who has already jumped through all the license and permit hoops and spent money to get it right, and now they want to ensure you don’t walk away unscathed. They can report your business to the city if they believe you are operating without the proper business licenses and permits.
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While craft fair organizers may “door check” your business license, that doesn’t mean your craft business doesn’t require someone to legally sell your handmade goods at craft shows.
If the law requires you to have a business license, you will need one to sell on Etsy. Platforms like Etsy or Shopify do not verify that every business using their site has the proper licenses, permits, registration, etc. to do so. However, that doesn’t mean you don’t need them.
If your craft business is considered a business and not a hobby, you will need a business license and you will need to file taxes on your income. In many countries, your business is considered a business and not a hobby if the goal is to make a profit from it.
The laws can actually get a little more complicated when selling online. For example, you must follow the laws regarding product regulations based on the country you ship the product to, not just the country where you manufacture it.
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Sales tax also gets a little more complicated when selling online (which I explain more in THE LAWS OF HANDWORKING SELLING). If you live in the US, you need to know whether you reside in the state of origin or the state of destination, as this determines how you charge sales tax to your customers.
You need to understand how to charge, collect and remit sales tax not only for your jurisdiction, but also for the jurisdictions where your customers are located.
If you are required by law to have a business license to sell your handmade items, you will need one before you can sell on Facebook. Selling crafts on Facebook is similar to selling crafts through Etsy or craft fairs. Facebook does not check to make sure your business has the appropriate business licenses and permits before you are allowed to create a Facebook page.
However, when you put your craft business online, it can be exposed to more people.
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This is great for making more sales. not so great if you don’t already have a business license and
Required to have one. More exposure means more opportunities for your craft business to be caught without valid licenses.
You should also consider that Facebook can introduce your business to customers outside of your state. It’s unlikely that you’ll turn down a sale because the customer lives in a state or two, so you should be aware of the tax laws and properly collect and remit sales tax (if required).
That means following local tax laws as well as the laws of the state where you ship your products.
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You also want to have a safe and secure way to sell your crafts through Facebook and accept money from customers. You can look at a platform like Ecwid that allows you to create lists and then sync those lists with a Facebook page, Instagram account, website, marketplace, or even accept payments in person.
Your business likely needs a license and/or permit(s) to operate legally; even if you run a sole proprietorship and run it out of your home. Some factors that determine whether you need a license and/or permit are:
The location where you operate your business will determine whether you need a business license or permit and which ones you require. You should look up the laws in your area / where you operate your business.
The type of product you sell and how it is regulated (eg by state law) will determine whether you need a license. Selling food or drink, handling flammable materials, or manufacturing processes that compromise air and water quality are also likely to require a permit.
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Although I had no employees and never had customers visit my home, I required a business license to legally operate my craft business out of my home. If you plan to have clients/customers visit your home/studio/commercial space, require parking, want to put up signs, etc. You will also need a zoning permit.
Your bank may require proof of appropriate licenses and permits to set up a business bank account or obtain a loan.
The difference between a business license and a business registration is that a license allows you to operate your business, while a registration requires more of your business. In most jurisdictions, you will need both a business license and a business license to register your business.
The first thing a police officer will ask when they pull someone over is their license and registration. They may also ask for proof of insurance.
Do You Need A Business License To Sell On Amazon?
In most cases, you will be required to register your craft business. Here are some factors that will determine whether or not you should register your handicraft business:
Where you plan to do business will determine whether you need to register your business. Some places don’t require you to register your business if you’re operating as a sole proprietorship or partnership and using your legal name (eg Jane Smith).
There are different ways you can build your business. Some
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