Do I need a licence to sell on eBay?

Selling on eBay can be an exciting way to start an e-commerce business online. The massive reach of eBay’s marketplace gives you access to millions of buyers worldwide. But before you dive in, you may be wondering – do I need a licence to sell on eBay?

It’s a common question many new eBay sellers ask. The social media experts and TikTok marketing experts all seem to have different opinions. I’ll clear up the confusion in this article. Basically, you don’t need a licence just to sell normal stuff on eBay. 

But for certain types of high-volume selling, eBay does require you to have a business licence. Some states also have their own permit rules for online sellers.

Let me walk you through what the experts say, so you can sell on eBay legally and avoid issues down the road. This article will also give tips from top TikTok e-commerce influencers on handling eBay licences.

Do I need a licence to sell on eBay?

For most sellers, you do not need any special business license just to sell items on eBay. The platform is open for any individual to sign up for an account and start listing their items.

However, if you are operating a larger commercial business that sells wholesale or new retail goods, your local state may require a reseller permit, sales tax license or other business registration. But for the average person just looking to sell used personal items, handmade crafts, or small batch new goods as a side hustle, you can get started on eBay without any seller’s license

What is an eBay Seller’s License Exactly?

When we talk about an “eBay seller’s licence” that usually refers to one of two things:

• A state seller’s permit or reseller licence
• eBay’s own seller licence requirements for high volume sellers

eBay itself does not require a licence for most basic selling activities. But if you want to sell certain restricted items, or do a lot of volume, then eBay licensing comes into play. A state seller’s permit is similar to a business licence. 

It allows you to collect sales tax and buy inventory wholesale. Some states require these once you hit a certain revenue threshold. But you may need a permit based on your state’s rules or your sales volume. Let’s break it down further.

When Do You Need an eBay Seller’s Permit?

Here are some common situations when you’ll need a special permit or licence to sell on eBay:

1. You earn over $20,000 per year on eBay

eBay requires a business licence once your gross sales exceed $20,000 in a 12 month period. This is to comply with federal tax reporting rules. You’ll get a 1099-K form from eBay and need to report your earnings to the IRS. Having a seller’s permit helps with registering your business properly.

2. You buy items wholesale to resell on eBay

If you purchase inventory wholesale with the intention of reselling on eBay, most states require a reseller permit or sales tax licence. This allows you to purchase goods tax-free from wholesalers and charge sales tax on final sales. Check your state’s reseller permit requirements.

3. You make or produce your own goods to sell on eBay

Let’s say you manufacture jewellery or crafts and want to sell them through your own eBay store. In this case many states require a seller’s permit since you are the producer.

Again, check your own state’s rules. Some exempt occasional craft sellers under a certain income level.

4. Exceptions: Personal used items or crafts

If you’re just selling random used stuff from your house, like old toys, clothes or electronics, you generally don’t need a permit. The same goes for selling handmade crafts you produced yourself.

But again, check your state laws in case they require permits for selling household items above a certain dollar value.

Do I Need a Business License to Sell on eBay?

When people ask “do I need a business licence to sell on eBay?” – the short answer is no, eBay itself does not require a general business licence. However, that doesn’t mean you can operate an eBay selling business with no licences. Here are some things to keep in mind:

• Your state may require a business licence once your eBay earnings pass a set amount, like $5,000 or $10,000 per year. Check your state’s regulations.
• Specific types of items like cars, real estate, healthcare products, etc may require special licences. Make sure you have any category-specific permits.
• As mentioned before, a reseller permit is mandatory if buying inventory wholesale for resale. This functions as a retail business licence.
• Getting a formal business licence can make your eBay store seem more legitimate and professional. Consider registering a DBA.

So eBay doesn’t force you to get a business licence to sell ordinary items as a small-scale seller. But operating legally still requires paying attention to permits, especially if selling full-time. Don’t fly under the radar, make sure to comply with state and local rules.

Tips from TikTok Marketing Experts on eBay Licences

Let’s look at what some top TikTok influencers and social media experts say about navigating eBay’s permits and staying compliant:

• Check eBay seller policies religiously – eBay has strict policies and staying compliant helps avoid suspensions. Get very familiar with their rules.
• Consider getting a reseller permit early – Even if you’re below state thresholds now, having the permit already can help you scale up quicker later on.
• Research your state’s business licence thresholds – At what point do you need a formal business registration? Factor this into your eBay sales goals.
• Display licences and permits clearly – Showing your reseller permit or business licence number prominently on your eBay profile increases buyer trust.
• Bookkeeping is crucial – Keep meticulous records of sales, expenses, inventory and other deductions so taxes are easy to handle.
• Ask other eBay sellers – Connect with experienced eBay store owners through social media groups to get advice on local licensing needs.
• Consider an LLC – Forming a limited liability company adds protection and makes you look more official as an eBay seller.

As you can see, the TikTok experts suggest getting professional licenses even before you technically need them. This proactive planning can help your eBay store operate smoothly as it starts ramping up sales.

FAQs

Do I need a license to sell handmade items on eBay?

You typically don’t need a special license to sell handmade crafts or artwork you created yourself on eBay. But check if your state requires a permit once sales reach a certain level.

What if I only sell a few used items a month on eBay?

Selling a few used household items or old personal belongings every month does not require registering with the state or getting a business license.

Can I buy items on clearance and resell on eBay without a license?

If buying products at retail prices for resale, most states require a reseller permit once you reach a certain revenue threshold from eBay sales.

What licence do I need to sell brand name products on eBay?

Selling trademarked items on eBay requires appropriate permissions and licenses from the brand owners. This includes things like DVDs, electronics, designer clothing, toys, etc.

Do I have to report income from selling on eBay?

Yes, you need to report any income from eBay sales on your taxes. If earnings exceed $20,000, you will receive a 1099-K form.

How much money can I make on eBay without a seller’s permit?

This amount varies based on your state’s rules. Some don’t require a permit until you earn $10k or $25k per year. But check your state’s reseller permit threshold.

Tips from the E-Commerce Expert:

Selling on eBay is an accessible way for anyone to dip their toes into starting an online business. You don’t necessarily need any kind of formal business licence just to sell as a casual eBay user.

But once your store starts making decent money, or if you sell in restricted categories, eBay and state seller permits become crucial. Professional licences protect buyers and ensure you operate legally.

For complex licensing questions, consider consulting an accountant or lawyer. Get your permits and licences squared away early in your eBay selling journey. This will allow you to focus on creating a killer eBay store that converts shoppers into loyal buyers. Proper credentials build trust so buyers feel confident purchasing from your listings.

Conclusion:

Selling on eBay is an exciting adventure! Start your e-commerce empire today and leverage eBay’s built-in audience of millions. Let your entrepreneurial spirit shine, while also making sure to comply with all state, federal and eBay licensing rules. 

The social media expert can guide you, but ultimately every eBay seller needs to educate themselves on permit requirements for their unique situation. With some passion and the right preparation, anyone can turn their eBay side-hustle into a thriving full-time income source. 

Just sell smart, sell legal, and unleash your inner e-commerce mogul! Let me know if you have any other questions. 

Ready to Start Your eBay Business?