I'm in the process of developing a site that offers advice and resources for young mothers/mothers-to-be. I have an idea about selling baby items (clothes, books, bottles, etc.) and/or baby gift baskets on the site. Do I need to get a business license if I will only be doing occasional selling? And if I sell name brand baby items, is there any chance I could be held liable for legal issues if I don't follow certain steps? Anybody have experience with owning a small online business? I would really appreciate some advice and insight before I delve into the world of ecommerce? Thanks in advance to all serious answers.
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Do I need to get a business license if I will only be doing occasional selling? Yes, a simple vendors license is what you need. Differs from state to state which one (some states only allow you to sell within the county, unless you get a transient vendors license that allows you to sell in all counties. Again each state is different. You may need other licenses as well depending on what you are selling. Selling without one is illegal, and you always want to be in compliance. You want one anyways, because REAL wholesalers will require it. In fact, if you are not asked to show proof by a potential vendor, then they are NOT a real wholesaler (just a discount merchandiser) and likely ripping you off and you will have very low profit margins, if any. Is there any chance I could be held liable for legal issues if I don't follow certain steps? If you mean by not having a license, then absolutely. If you are talking about other issues like being sued by customers, etc, then yes there is always that possibility. Selling online legally is not hard. I recommend consulting a tax person and I myself run my ecommerce businesses as LLC's because its helps with potential liability protection and even more importantly, it gives you credability with the real distributors. Most real distributors do not like doing business with small or part time online sellers. Having an LLC goes a long way to build that credability. An LLC may be overkill though if you have a low liability business, but then again, there is always some nutjob out there willing to sue... Its cheap to set up, and you'll sleep better. Makes tax time a little harder though. If your serious though about doing it right, check out a good accountant with experience (you do not need a CPA unless you are getting real complicated) Anybody have experience with owning a small online business? I have run and still run several ecommerce websites. I started with less than $500 investment in licenses and have had stores grow pretty big. Some stores only do 400/month, others do 10k plus... Just depends on your ability to market and target a detailed niche. I recommend you check out www.basicsofecommerce,com. It has blogs, tutorials, articles, tools, videos, etc on the site to help you if you are new or wanting to grow your business. Its 100% free site. Practical Ecommerce is another good site www.practicalecommerce.com
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