Do You Need a Business License To Sell On Amazon?

Do you need a business license to sell on Amazon? This is the question that Amazon sellers ask the most frequently online. We know this is due to the fear of penalties and being banned for violating government regulations. Still, we can’t deny that the cost, time, and effort required to obtain a license is too much for many new Amazon sellers who are unsure about running their Amazon business in the long run. 

We decided to clear every question popping into these new amazon sellers’ heads in the article below. Explain to them whether they require a business license and, if so, why and how to obtain one and register as an Amazon seller.

Should You Get a Business License To Sell On Amazon?

A straightforward answer to your question is No; you do not need a business license to sell on amazon. However, it’s not applicable in all cases. Selling consumer goods approved by the federal government on amazon requires a business license, and most of the goods sold on amazon are not approved by the federal government; hence having a business license is not necessary to sell on this platform. Furthermore, it’s difficult to say you won’t need a business license or any other license for selling goods without knowing your country, state, or local legal requirements.

How To Get a Business License?

Getting a business license is not the same everywhere; however, in most cases, you will get a business license by following the steps below.

Step 1. Form a business entity and apply for EIN using the IRS website.

Step 2. Find out what license you need through a lawyer’s consultation. (Read below to understand different business licenses)

Step 3. Apply for your business license on the SBA website or office.

That’s it; you will get a business license after applying for it within a few days or months. Remember to renew your license annually or monthly as told.

Different Types Of Business Licenses.

There are various business licenses meant for different purposes. Please have a look over them below.

  • Federal license

There are certain products you cannot sell if you do not have a federal license. These include agricultural products, Alcoholic beverages, Aviation, fish and wildlife, mining and drilling, nuclear energy, radio, television broadcasting, transportation, etc.

  • Seller’s Permit

A seller’s permit is needed when you sell inventory on amazon or any other online platform to collect sales tax from customers; however, it varies from country to country and state to state.

  • DBA

DBA, also called an assumed or fictitious business name, helps customers know who the company’s owner is and who is responsible and answerable in case any problem arises. DBA is also not necessary in some states and countries. However, it’s always good to have it.

  • Industry licenses

Industry licenses could be a must for human health and safety-related products in some places. You can have them issued by your state licensing board.

Is It Mandatory To Have LLC To Sell On Amazon?

No, it is not compulsory to have LLC to sell on Amazon. The LLC provides a legal foundation to your business and protects you by providing a shield to your name in case any legal actions are taken against you. It is not compulsory to have an LLC, but it is good to have it since lawsuits increase once your sales increase and your brand becomes bigger. Having an LLC gives protection to your personal assets from your business assets. Furthermore, with the help of an LLC, it becomes easier for you to build credit and get loans.

How Can I Register My Business On Amazon To Start Selling?

Registering your business is a necessary process in most cases. Provide the below information on the amazon seller website to start selling.

  • Company details
  • Contact details (email and phone number)
  • Basic information related to business
  • VAT registration certificate

After you provide the above information, you will get their response for the next steps.

Wrapping Up!

This concludes our discussion; presumably, by this point, you have determined whether or not an Amazon seller account requires a business license. The article above gives you comprehensive information about selling on Amazon. To summarize, unless the federal government approves your products, you do not need a business license to sell them on Amazon. 

Nevertheless, If your products are approved by the federal government, form a business entity, obtain an EIN, determine which licenses you require, and submit an application to the SBA office or website to get a business license. 

We hope the above article clarified the requirement for a business license to sell on Amazon. Let us know your thoughts on getting a business license for Amazon’s business in the comments below.

FAQs

  • Do I need a seller’s permit to sell on amazon?
  • No, it is necessary to have a seller’s permit to sell on amazon since most of the products are not Federal government approved.

  • Does Amazon charge money for selling products?
  • Listing on Amazon.in is free of cost; however, Amazon charges a fee when you get an order.

  • How can I create an amazon seller account?
  • You can sign up on amazon to create a seller account or sell on amazon using your customer account.

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