Do You Need A Business License To Sell On Etsy
by Mashum Mollah Sales & Marketing 29 January 2022
Are you a pro in marketing? Then Etsy is the right platform for innovation-driven selling. With the increase in Etsy’s popularity over the last few years, several queries are coming forward. One of the most frequently asked questions related to Etsy marketing is “Do you need a business license to sell on Etsy?”
In this guide, we will be shedding light on this question only, along with several other questions regarding the Etsy marketplace. The following things this guide would cover.
Do you need a business license to sell on Etsy? The answer to it is not so simple. Let’s kickstart the post with some insights on Etsy.
I know many of you must have heard about Etsy but you may not have a clear idea about what it is or how it works. Well, Etsy is one of the most popular digital global marketplaces. Marketers open accounts here and interact with buyers to sell creative items. The best thing about Etsy is that you will always find a touch of innovation here.
So if you are a budding entrepreneur, kickstart your business with Etsy. Not only a bunch of advantages but also your business would get significant exposure on this platform. The most frequent question that we have received from emerging marketers about Etsy is “do I need a business license to sell on Etsy.”
What Are The Advantages Of Etsy?
Before hopping on to “Do you need a business license to sell on Etsy,” navigating through Etsy pros and cons is much needed. Indeed, Etsy has a plethora of advantages despite several criticisms. Most of them revolve around marketers. Wanna take a look? Let’s go!
- Zero Cost Set-Up: The most incredible part of being a seller on Etsy is it charges no cost for starting the business. Your store would be ready within a few seconds with engaging designs and configurations for free.
- Huge Customer Base: Opening your own online shop on Etsy will give you a huge reach to targeted audiences. There are 31.7 million active buyers on this platform. So I hope you can imagine how much profitability and brand awareness you would enjoy there.
- Compatible To Smartphones: The User Interface for the Etsy sellers mobile app is pretty clean and amazing. Also, the apps are technology-oriented.
What Are The Cons Of Etsy?
Prior to knowing if you need a business license to sell on Etsy, it is advisable to understand the disadvantages of Etsy very well. Here they are!
- Frequency Of Getting Banned: Etsy can block you from their sites for various reasons. Sometimes these left many prosperous sellers in shock.
- High fees: The biggest challenge with Etsy is its transaction fees which are 3.5%. In addition, you have to pay for listing products on their platform. So, in actual terms, Etsy is not free.
- Absence Of Enough Personalization Options: There are only some fixed templates on Etsy. These are used by millions of sellers numerous times. Hence you will get no scope of personalizing your stores.
Do You Need A Business License To Sell On Etsy?
One of the most asked questions of Etsy sellers is, “do you have to have a business license to sell on etsy.” The answer is straightforward! If you want to extract profit from your Etsy store and operate it as a business, then Yes, you need licenses and permits.
I hope most of the sellers on Etsy are operating their business for commercial purposes, not as a hobby. Also, if your company is an LLC or partnership, then YES, you definitely require business licenses and an Employee Identification Number. The outcome, therefore, is:
- If it’s a business that you are running on Etsy
- If you are earning profit
- And only if your Etsy store is an LLC or partnership then you have to hold possession of the requisite Etsy business license.
So you have your answer to the question – “do I need a business license to sell on Etsy.” Wanna know what Etsy business license do you need? Here they are:
- Home Occupation permits.
- Employer Identification Number (EAN)
- Business Operation License
If you are still not clear whether do you need a business license to sell on Etsy in your locality/state, contact the local SBA. It’s better to spend some time in research instead of getting banned and giving violation fines.
Do You Need A Business License To Sell On Etsy In California?
As mentioned earlier, whether do you need a business license to sell on Etsy depends on which locality and country you reside in. However, if you ask do you need an Etsy business license to sell in California, the answer might be a little different.
As per the California Department of Tax and Fee Administration (CDTFA), if you make more than three sales in a year, you have to hold a seller’s permit. Most of the cities and counties in the U.S.A require business licenses to sell something on online platforms.
But still, it depends from one seller to another based on the factors mentioned in the above section as well. So, “the answer to your question “do you have to have a business license to sell on Etsy” varies sometimes. Whereas when it comes to California, the answer is depending on your sales.
Frequently Asked Questions (FAQ)
Q1. Do You Need A License To Sell On Etsy?
If you speak about Etsy Business License then you need it in most of the municipalities, counties, or states. It is because sellers on the Etsy platform run their stores to earn profit. So to avoid fines and penalties, it’s advisable to research your locality’s regulations before opening an Etsy store.
Q2. Do You Need A Tax ID To Sell On Etsy?
A number of states need sales tax from Etsy sellers as per the new rule of the Supreme Court in 2018. Apart from these, you may require charging local sales tax if your local regulations have outlined the same.
Q3. How To Sell Foods On Etsy
If you want to sell food on Etsy Store, you need certification from the local health department team. There are plenty of resources about this in the U.S. Food and Drug Administration, which you can go through.
Q4. Do you need a business license to sell on Etsy in Florida?
The answer is Yes! Retail seller permits do not apply in Florida. Hence you are obliged to pay sales tax and get a sales tax permit to register your business in Florida.
The Final Thoughts
I hope now it is clear to you whether and why do you need a business license to sell on Etsy. Are you ready to start selling on Etsy now? You can check some tips to create a high-yielding Etsy business from our publication – “5 Tips For Building a Successful Etsy Business.” Go through this, and I bet it will clear your all doubts regarding selling on the Etsy Platform!
Is there any question that you would like to ask regarding “do you need a license to sell on Etsy.” Shoot them in the comment area below, and we will be responding to you soon.