Introduction
Another extremely popular way of creating an online business is by selling on Amazon. Whether you enjoy the idea of private labeling, drop shipping, or retail arbitrage, Amazon’s marketplace provides you with access to millions of potential customers around the world.
But prior to that, one of the biggest questions new sellers ask is: do you need a business license if you are an Amazon vendor?
The solution is: it depends on your business model, your location, and your long-term objectives. Here, we will break down everything you need to know about licensing requirements, Amazon’s own terms, and whether you can sell without one.
Do I Need an Amazon Business License to Become an Amazon Vendor?
The short answer is no, you do not always need a business license to sell on Amazon. Many sellers begin with only their personal details and a bank account.
However, you may require one depending on your nation, product category, and business model. Common triggers include:
- Tax reporting — registering your business legally simplifies taxes.
- Bulk buying — suppliers will usually ask for a resale license or tax ID.
- Restricted categories — Amazon can require documentation for categories such as electronics, beauty, or health.
Amazon’s Requirements for Sellers
Amazon does not directly ask every vendor for a business license. What Amazon does ask for is:
- A current government-issued ID.
- A banking account (for deposits).
- A valid credit card.
- Tax data (SSN for an individual or a business entity’s U.S. EIN).
So while Amazon won’t stop you from offering without a license, your situation may still require one legally.
When You Require a Business License for Amazon
1) Wholesale & Bulk Orders
If you will be purchasing stock from wholesalers or manufacturers, they will almost always require:
- A resale certificate, or
- A state sales tax permit.
This verifies that you are a legitimate business and allows you to purchase merchandise tax-free.
2) Private Label Sellers
When establishing your own brand of goods, you do not necessarily need a license to open an Amazon account, but business registration protects you legally and enables smoother trademark registration.
3) Selling in Restricted Categories
Amazon needs approval for selected categories like:
- Grocery & Gourmet Food
- Health & Personal Care
- Jewelry & Watches
- Automotive
In such instances, Amazon often requires invoices as well as proof of a legitimate business.
4) State & Local Laws
Even if Amazon does not require a license, your state or nation may.
- United States: some states obligate sellers to collect and remit sales tax (sales tax permit/reseller certificate).
- Other countries: you may need VAT/GST registration once sales reach a threshold.
When You Do Not Need a Business License
Not every Amazon vendor requires one immediately. For example:
- Personal traders selling used books, clothing, or household items.
- Hobby merchants testing Amazon with low volume.
- Dropshippers whose suppliers do not ask for resale certificates.
For many beginners, starting without a license is acceptable.
Benefits of Having an Amazon Business License for Sellers
- Generates confidence: suppliers and customers take you seriously.
- Tax advantages: offset costs such as shipping, inventory, software, and equipment.
- Wholesale access: unlock relationships with larger suppliers.
- Brand protection: easier to file trademarks and protect your products.
- Scaling potential: helpful when transitioning from an Individual to a Professional seller account.
How to Get a Business License (Step-by-Step)
- Select your business structure — Sole Proprietorship, Limited Liability Company (LLC), or Corporation.
- Register with your state or country — in the U.S., file with your Secretary of State.
- Apply for an EIN (Employer Identification Number) — free via the IRS website.
- Obtain local business licenses & permits — sales tax permits, resale certificates, etc.
- Update your Amazon vendor/seller account — add your business details in Seller Central.
FAQs: Do You Need a Business License to Sell on Amazon?
1. Do I need a business license to sell on Amazon?
Not always. Amazon does not require one for individuals, but your local laws or suppliers may.
2. Can I sell on Amazon as an individual without a license?
Yes, you can start with an Individual Seller account using just your personal details.
3. Do I need an LLC to sell on Amazon?
No. You can sell as a sole proprietor, but an LLC offers liability protection and tax advantages.
4. What if I sell handmade or small items?
Most casual and handmade sellers don’t need a license unless required by state or local law.
5. Do wholesalers require a license?
Yes. Most wholesalers ask for a resale license or tax ID before selling to you.
6. Does Amazon check if I have a license?
Amazon doesn’t require it for most categories, but may ask for documentation in restricted categories.
7. Should I get a license before starting on Amazon?
It depends. Many sellers start without one, then register once sales grow and the benefits outweigh the cost.
Conclusion
So, do you need a business license to sell on Amazon?
- ✅ No, if you’re just starting small as an individual.
- ✅ Yes, if you plan to grow, buy wholesale, or sell in restricted categories.
Getting a business license isn’t just about legality—it’s about professionalism, trust, and future growth. If you’re serious about Amazon FBA or scaling your store, registering your business is a smart long-term move.