Wholesale Myth: Do I Need A Business License Or Tax ID?
If you're a small business owner, you may be under the impression that you need a business license and/or tax ID to sell products beyond just friends and family. However, this is not always the case! Sellers on sites like Etsy, Craigslist, or eBay typically don't need these licenses or IDs because of who they are selling to.
The article below takes a closer look at whether or not sellers of items on online marketplaces require licenses or IDs. It also explains what some other sellers do in order to avoid hefty fees - though it's easy enough to learn more about this topic in our article "Start your own Business: Which Type Should You Start?".
Many Reason Customers Are Afraid To Buy From You
When customers buy from you on eBay and Etsy, they are not buying products you owe money to, like a service provider or an employer. The items you sell are not considered personal property - this means that you don't need a specific license or ID to sell them. This also frees you up from the burden of filing taxes on your income, which can be tough in the current economic climate.
In some cases, these sellers may also avoid the burden of hiring employees to deliver their products. In other words, instead of providing your service to customers yourself, you sell directly to them online and make money on that sale.
Do You Need A Business License Or Tax ID?
Although you don't need a business license or tax ID to sell your products, it's always best to make sure that you have one. Here are some of the main reasons why:
1. If you're a small business, you'll likely be able to deduct some expenses from your taxes. This means that you can lower the amount of taxes you pay every year and receive a tax refund on more income than before. However, if you're an individual who operates a small business, be aware that there are other benefits if you have served in the military or are unemployed (more below).
2. Even if you don't consider these licenses or IDs necessary, your customers may. A lot of people want to know whether or not they're purchasing from an actual business because many sellers on online marketplaces use a name that masks their true profession. Today, more public figures such as celebrities or politicians are using this method of protecting their identities to avoid scandal. If you are a member of this community and plan to remain anonymous, you'll need a business license or tax ID.
3. If an investigation were to be launched into your business – industry-related as well as political – underage buyers or other improprieties could be revealed if you didn't have a company name attached.
4. Most importantly, if you decide to start selling your products to the international community, a business license or tax ID will be necessary. You'd have to prove that you are indeed a business and not just an individual.
How Do You Get A Business License Or Tax ID?
Depending on where you live, there may be various ways of getting a license or tax ID to sell your products on marketplaces like eBay and Etsy. There are also certain companies that can help you apply for this document in bulk using templates for various licenses. One example of this is the Templates4Business service from Amazon .
If you're interested in getting a business license or tax ID from the federal government, you will most likely have to fill out an application, pay a fee and then wait for a response. You can also use our guide "Sell on eBay" to apply for one of these licenses with ease.
The Non-Profits License: A Great Way To Sell Your Products
There are two different types of licenses a non-profit can receive to sell their products: the Retail Sales Tax Exempt License and the Social Club License . The Retail Sales Tax Exempt License allows certain non-profits to receive sales tax exemptions while those with a Social Club license do not have to charge federal or state taxes.
The Bottom Line
Whether you decide to sell your products on ebay and Etsy using a Storefront, or an Amazon Marketplace store, you do not need a business license or tax ID to sell your items. Though it's always good to have one for the sake of selling in the future (or having one handy in case of an investigation), they are rarely necessary today unless you become famous, are employed by someone, sell products to teenagers or have other issues. In these cases, you can even avoid taxes on your income by getting a Social Club License.
From my blog: http://www.places4sellers.com/ebay-selling/wholesale-myth-should-i-need-a-business-license-or-taxid/
Category: eBay Tips and Tricks - View comments - Leave a comment
Title: Is it ok to return a damaged item?
Author: admin admin's G+ profile [ARTICLE START] Yes, it is ok to return a damaged item as long as your seller didn't describe the item as "new" or "never used. If you check the original listing and discover it is "new" or "never used," you won't be able to return the item. If the seller did not say this, then go ahead and return it. Here are a few tips when returning an item:
1. The seller should process the refund within three days of your return. If they wait longer than that, make sure to contact eBay support (if you're on eBay) or your marketplace's customer service department (if you're on Etsy).
2. The seller should pay any fees charged by eBay or your marketplace's customer service department.
3. If you want an item as a gift, don't request an "open box."
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Title: My Stuff! Not sure where to sell my stuff?! Here's the scoop! Where to Sell Items Tips and Guideline from the experts at Places 4 Sellers! [ARTICLE START] First, To Sell on eBay Or Etsy, you will need a valid Etsy shop on which to sell your items or make your Listings on eBay. We offer both shops in which you can maintain and post new listings...even if you are not an expert! Unless you are a reseller, and buying in bulk, or a wholesaler or have wholesale contacts, always check local consignment shops first. They always have a market for quality "like new" clothing and accessories. These businesses pay you cash on the spot or credit your account once they sell your items. If they can't sell it; they don't keep it! They pay anywhere from 30-50% of retail prices depending on the product and conditions. You should do such an evaluation before approaching any store. As a rule of thumb you should get 60% of the value of the item. Read this article on consignment to learn more: How to Sell Your Clothes on Consignment .
Conclusion:
In conclusion, we only recommend using our Etsy or eBay Shop for the purposes of eBay Listing or selling your items on Etsy. It is not recommended to sell your items in a Consignment shop unless you are getting a cash payment. Our shops are designed for just that...the selling of items on eBay and Etsy!
How To Sell Your Items On Etsy - Places4Sellers Blogspot [ARTICLE START] How to Sell Your Items On Ebay - Places 4 Sellers Blogspot [ARTICLE START] The article has been updated again to reflect changes made.