Do You Need a Registered Business to Sell on Amazon?

Selling on Amazon can be an exciting opportunity for many entrepreneurs, but before you dive in, it's important to understand the requirements, especially whether you need a registered business. This article will explore the ins and outs of selling on Amazon, focusing on the necessity of having a registered business.

1. Understanding Amazon's Seller Requirements

When you start selling on Amazon, the platform has certain requirements that you need to meet. These include providing a valid credit card, a bank account, and tax information. But does this mean you need to have a registered business?

2. Selling as an Individual

Amazon allows individuals to sell on their platform without having a registered business. This is done through the "Individual Seller Account" option. As an individual seller, you can list products, make sales, and even take advantage of Amazon's Fulfillment by Amazon (FBA) services. However, there are a few things to keep in mind:

• Fees: Individual sellers are subject to a per-item fee for each sale, which is in addition to the standard referral fees.
• Features: Individual accounts have fewer features compared to professional accounts. For instance, you won’t have access to advanced selling tools and analytics.
• Sales Volume: If you plan to sell more than 40 items per month, the individual plan might not be the best choice due to the higher fees.

3. Selling as a Business

If you're considering scaling your selling activities or if you plan to make Amazon selling a serious business, opting for a "Professional Seller Account" might be more advantageous. For a professional account, you typically need to have a registered business. Here's why:

• Monthly Subscription Fee: Professional accounts come with a monthly subscription fee, but you won’t be charged per-item fees.
• Business Features: Professional accounts offer additional features, such as bulk listing tools, advanced reporting, and access to advertising options.
• Branding and Trust: Having a registered business can enhance your brand's credibility and trustworthiness. It can also help you manage taxes more effectively and may be required for certain types of product listings.

4. Legal and Tax Considerations

Even if Amazon doesn’t require a registered business for individual sellers, you should still consider the legal and tax implications:

• Tax Obligations: Depending on your location, you may need to collect and remit sales tax. A registered business can simplify this process.
• Liability Protection: Operating as a business entity (like an LLC or corporation) provides liability protection, which can shield your personal assets from business-related debts and legal actions.
• Business Licenses and Permits: Depending on your location and the products you sell, you might need specific licenses or permits to operate legally.

5. Conclusion

In summary, while you don't need a registered business to start selling on Amazon, having one can offer several advantages if you plan to scale your operations. A registered business can provide access to more features, help with legal and tax matters, and enhance your credibility with customers.

Consider your long-term goals when deciding whether to start as an individual seller or establish a registered business. The choice you make will impact your selling strategy and overall success on Amazon.