Why You Should Set up Your eBay Selling as a Legal Business

While you can sell on eBay out of the back of your car and never claim any of your sales to the taxman, this is not the best way to go about pursuing e-commerce as a career. There are many advantages to running your eBay business the legal and correct way and this direction is the one we highly suggest you take. Starting a legal business entity may seem daunting at first, but it will pay off down the road.

If you ever plan on buying goods for resale from a legitimate distributor, wholesaler, manufacturer, or free dropshippers, you will need to be a bona fide business. To deal with a genuine company that offers you products for resale, you need to have a Federal Tax ID and a business license.

Furthermore, if you ever want to attend an industry-only tradeshow, then you will most definitely need several forms of identification that prove you are a genuine business. These include a Federal Tax ID Number, a business license, business cards and credit cards in your, and the company’s, name.

You will need to collect sales tax under certain circumstances, and the only way to do this is to be a legitimate business. Also, there are certain tax advantages you will be able to benefit from only if you are a business (consult an accountant!).

Don’t Believe Everything You Hear

There are plenty of eBay Sellers out there who will tell you it is OK to sell as a business but not be a business, to ‘fly under the radar’, to not worry about setting up a legitimate business structure and not pay taxes on your eBay income. It is very interesting logic, to say the least. Please explain to us how you can be a successful eBay business when you do not treat your eBay selling as a business?!?

Granted you might be able to have this mindset when you are selling stuff to clear out your garage, but when you want this to be a legitimate source of income you need to treat it like a real business. It’s as simple as that. To be a successful business, you need to treat your business like a business.

Hopefully we have convinced you to set your eBay business down the path of truth and righteousness. Or at the very least, we have convinced you to treat your business like the business it truly deserves to be.

Check out our post entitled “Why You Should Consult With Professionals Before Seriously Selling on eBay” to see how you go about setting up your dream business structure.

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Please note that much of this blog (www.LizardWisdom.com) is based on personal experience and anecdotal evidence. Although we have made every reasonable attempt to achieve complete accuracy of the content in this blog, we assume no responsibility for errors or