Do You Need A Business License To Sell On Amazon & How Can You Get It?

Zeeshan Riaz January 25, 2023

Amazon is a great place to sell your products and make money. But there are some things you need to know before signing up for an Amazon seller account. This article will talk about the different types of business licenses. Moreover, it will tell how they affect your ability to sell on Amazon.

Do You Need A Business License To Sell On Amazons

What is a business license?

A business license is a document that permits you to operate your business. It does not mean you need one. But it ensures that your city and state have determined that you can use it in their area.

Business licenses can be issued by local governments or at the state level. So, it depends on which state or city you’re looking at, with each having different requirements for obtaining one. In some states, they may even be required of certain types of businesses. For instance, restaurants or massage parlors—and those who work in those fields will generally have them before they start working there. But other types of businesses do not need them until after they open up shop (e.g., barbershops). So, that’s why do you need a business license to sell on Amazon.

When to Register for a Business License? 

When you have a business and are making money, you must register your business with the local government. This is to make sure that there are no tax issues or other financial obligations about your operations.

You will also need to register if you sell taxable items on Amazon (e.g., alcohol.)

Types of Business Licenses:

There are several types of business licenses that you may need to apply for depending on the type of business you’re running.

  • Federal licenses:

In some cases, federal agencies specify the type or category of license. But, again, it is because of their particular industry or activity. For example: if your company sells products that contain tobacco products. Obtaining a Federal Excise Tax (FET) license from the IRS may be necessary. This would include any company selling any tobacco product within their borders.

  • State licenses:

Each state has its own set of laws regarding how businesses operate within its borders and what they must do when they set up shop there. Thus, each state has its requirements, especially regarding establishing yourself as an entrepreneur!

For example, California requires all new businesses under their jurisdiction to pay $150 annually toward their annual tax return; meanwhile, New York only requires payment once every three years instead! If you plan on opening up a shop somewhere with little experience. So, the chances are good that these factors cause concern over whether setting up shop would be worth investing effort into doing so.

  • Federal Licenses and Permits

What is a Business License? A business license is required by the state or federal government to operate your business. It may be necessary if you sell goods on Amazon FBA, but it’s only sometimes required. In some states, you may only need a business license if you want to run a retail store with more than one location (if your store has more than one location). If this is the case for you and your business plan has been approved by Amazon as an FBA seller in those states, then there’s no need for a separate license from the state government.

However, there are other types of businesses that fall under this category. For instance, food trucks or mobile beauty shops. Then they will likely require their separate licenses. But, again, it is because they operate outside traditional brick-and-mortar locations like grocery stores or pharmacies.”

  • State Licenses and Permits

A state business license is required for many businesses. However, it’s OK for sellers on Amazon as long as they’re doing business in a single state only. For example, suppose you live in Michigan and want to sell your book there but plan on doing no other company within that state (for example, purchasing supplies online). In that case, you don’t need a Michigan business license. 

However, plan on making deliveries or accepting returns from customers who live within the borders of your home state (and possibly beyond). It makes sense to apply for one anyway so that everything is covered under one umbrella at all times!

  • Other Local Business Licenses

You may be surprised to learn that there are many other local business licenses that you need to obtain if you want to sell on Amazon. The good news is many of these licenses can be obtained online without having to go through the hassle of hiring an attorney or accountant.

Here are some other local business licenses:

  • Sales Tax License (State).
  • Business Registration Certificate (County).
  • Liquor License (City/County). This can be done through your state’s Department of Revenue website or by calling them directly for more information about this process.

What is an LLC?

LLC stands for limited liability company. It is a type of business entity that combines the little personal liability protection of an individual with a corporation’s tax benefits and flexibility. 

An LLC has several essential features:

It’s considered an “entity,” which means it can own property, pay taxes and make contracts.

LLCs have limited liability for their owners (or members). So if you’re sued because of something that happened in your business, your assets aren’t at risk if you lose the lawsuit—but those responsible for running your company could be held liable for damages up to their share in ownership interest. 

If all members are sued at once, however, they’ll only be liable for what they put into the LLC from their own pockets or earned profits. This means, there won’t be any additional protection beyond this amount unless all parties agree otherwise beforehand through contractual agreements. So this was the answer to why do you need a business license to sell on Amazon.

Do I need an LLC for Amazon FBA?

Generally, you need an LLC if you sell more than 40 items per month. However, if you’re selling less than 40 items per month, this may not apply to your situation, and it’s OK to use your name as long as everything is in order with Amazon and the IRS (who will end up paying any tax on what you earn).

If you sell more than 40 items per month, I recommend you go with an LLC. You may also consider a corporation if your sales volume is exceptionally high. Otherwise, it’s probably not worth the extra time and expense

What kind of business license do I need to sell on Amazon?

You need an Amazon FBA business license to sell on Amazon.

It’s important to note that this is different from the seller’s account, where all your products will be listed and sold in one place. To get your business license, you will need to do two things:

Create an account with Amazon Seller Central (AS-CS.) This process takes about 5 minutes and includes uploading photos of yourself. Moreover, it also provides some basic information about yourself. For instance, it includes the address, phone number, and email address. So this way, we can contact you if there are any problems with our system. Similarly, if someone wants to follow up on something related to selling on Amazon FBA.

If applicable, for what state/country does this apply? If so, read below, “Which state(s)/country does it apply to?”

Should I Get a Business License for selling physical products on Amazon?

You will need a business license for Amazon FBA if you’re selling physical products on Amazon. This is because the company provides specific services in exchange for fees and commissions from selling its products.

If you still need one, make sure to check out our guide on how to get your first business license here!

You can also learn more about what it means precisely by reading through this official statement from Congress:

The federal government does not require all businesses that sell physical goods or digital content through an online marketplace (eCommerce) to register as a retailer under the Federal Trade Commission Act (“FTCA”). However, those who operate eCommerce sites with significant sales volume may be required by states requiring them to comply with state laws governing these activities if they meet specific criteria set forth by state law. 

When should you register your Amazon FBA Business as a limited liability company?

If you want to protect yourself from personal liability, or if your business has a lot of money invested in it and will be hiring employees (or possibly even expanding), then registering as a limited liability company can be an excellent choice.

The best time to register as an LLC is when the business operations start making money. This means that there is enough revenue coming into the company to pay expenses and keep the balance sheet healthy.

How to Switch Your Amazon Seller Account from Sole Proprietor/Individual to LLC?

  • It would help if you created an LLC.
  • Then you need to register your business as an LLC.
  • The next step is providing the LLC with a tax ID number. This can be done through the Secretary of State in your state or by contacting their office directly if their website has more information on how to do this yourself.
  • Make sure you’re registered in the correct state for your company’s location and that all its employees are authorized by their respective states’ labor departments (if possible). This will make it easier for Amazon customers who live near these locations and have questions about whether or not they’ll be able to work with you when buying products from them!

Why do you need a business license to sell on Amazon?

A wholesale license is an Amazon seller business license that allows you to sell goods or services on Amazon. It’s important to note that having a wholesale permit does not mean you can sell directly to consumers—it only applies when you’re selling goods or services through an independent wholesaler (also known as a distributor.)

A distributor buys your inventory from you and then sells it on Amazon under their brand name. This means that the distributor has access to deep discounts, but their margins may be lower than those offered by sellers who do not have any additional costs associated with running their businesses at scale; however, distributors can also benefit from being able to provide customers with more options than if they were shopping exclusively through Amazon’s direct-to-consumer channels alone.

Do you need An EIN to open an Amazon seller account?

  • You need an EIN to open an Amazon seller account.
  • Use EIN to open a bank account.
  • Third, EIN to get a business license.
  • Fourth use an EIN to file taxes.

Getting a Business License For Your Amazon Seller Account

  • You can get a business license to sell on Amazon for your Amazon seller account.
  • You need an LLC to sell on Amazon.
  • You also need an EIN (Employer Identification Number). It is similar to a Social Security number for businesses. But it’s specific to the IRS and used by them only when processing tax returns for those who have one. So, you don’t need one if you’re just starting out as an individual seller.

Can I sell on Amazon without a Business License?

Yes, you can sell on Amazon without a business license. You just need to be registered as an LLC, sole proprietor, and/or individual.

To register your business as an LLC:

Go to the Secretary of State’s website and search for “LLC” or “Profit & Loss Partnership.” Find the form that best suits your needs, fill it out and submit it online or by mail with all necessary attachments (e-signature, check stubs, etc.) It costs $100 per year but includes services such as doing taxes for you!

As a business, you need an EIN to get your Social Security card replaced; if it’s stolen or lost, if you don’t want to register as an LLC, then you can simply register as a sole proprietor and/or individual. You just need to fill out the form and submit it online or by mail with all necessary attachments (e-signature, check stubs, etc).

Wrap Up!

Do you need a business license to sell on Amazon, the above blog has already given you the answer. So, you must also look for the rules and regulations surrounding this platform. You need to become familiar with what types of licenses you need if your business is in many states or if you sell physical products that need a wholesale license. The best way to ensure everything is done correctly. You can do this by hiring Urtasker! As we have a team that will guide you throughout the process. 


Leave a Reply

Your email address will not be published. Required fields are marked *

New Offer from Urtasker – 90-Day Sprint – Improve Margin, Guaranteed
This is default text for notification bar