Is It Necessary to Form an LLC for Amazon?

Is it necessary to form an llc for Amazon?

The short answer is no, but the answer to this question may vary depending on your situation.

You don't need an LLC to sell on Amazon. As an individual, you can immediately open an account in your own name and start selling. If you are starting to explore e-commerce and intend to sell on Amazon, you can first test yourself by opening an individual account. However, if you decide to take the Amazon business further, and you really intend to make money from this business, it would make sense to set up a company for Amazon

What is the Right Time to Form an LLC in Usa for Amazon Business?

As your business grows or if you want to take your e-commerce initiative seriously from the very beginning (this would be the right approach), you can form an LLC company in Usa. Creating an LLC is the best way to protect yourself and your business. If the following situations describe you, you need to form an LLC company in Usa;

• If you're serious about selling on Amazon and growing your Amazon business
• If you are truly determined to pursue this business as if it were your own business,
• If your sales will or have increased steadily each month
• If you sell products that may cause possible health problems, such as sports equipment, health products, kitchen products, food products, nutritional products, children's products and sports supplements
• If your current Amazon store has reached a certain turnover level (at this level, Amazon will send you a notification to incorporate)
• If you are going to upload 40 or more products to your store
• If you want to rank your Amazon store higher in searches with in-Amazon ads
• If you want to be eligible to rank at the top of product detail pages
• If you plan to automate with software or API integration
• If you want to add multiple users to your account
• If you want to monitor detailed statistics of your store and products
• If you need to source products from suppliers on a regular basis

If any of the above happens or will happen in the future, it is necessary to form an LLC company in Usa immediately. Creating an LLC is not as difficult as you think, and most importantly, it protects you from problems and possible lawsuits that may be filed against you in the long run.

In fact, we can say that even the last sentence is a requirement for incorporation in Amazon. Because Amazon sells mostly to Usans or Europeans, they attach great importance to seeking their rights due to their upbringing in that geography. As stated in the contracts, Amazon can hold sellers problematic in case of any damage, injury or health problem that may occur to users due to the products you sell. In cases of such possible problems, you may incur significant financial losses in compensation cases that may be filed against you.

However, when your account is an llc account and this company is a US LLC, it acts as a shield between you and your personal assets. For this reason, an LLC company should be preferred for many businesses including e-commerce abroad.

Do You Require a Business License for an LLC When Selling on Amazon?

Business licenses are generally required for those who reside within the state where the company is incorporated or have a physical location within the state, such as a store or shop. You do not need a business license for your LLC to sell retail on Amazon. You simply set up a standard LLC and obtain an EIN (Tax Identification Number) for your LLC. This is a very simple process.

How to Open an Account on Amazon and Set Up an LLC to Sell Products?

This is actually a pretty simple process. You can establish your company online in America by getting service from a registered agent such as Northwest. For Amazon, the most advantageous state to establish a company is Wyoming. at this article, which contains details about establishing a company and opening an account for Amazon . In the article you will find tips on this process and a list of steps you need to take.

Do I Need an EIN for My Company?

When you create an LLC, you will definitely need an EIN (Employer Identification Number). The EIN is like your company's tax certificate. Just as a company without a tax registration cannot officially do business, an LLC without an EIN cannot be used for business. Once your company is established, you can obtain an EIN by filling out a one-page form and faxing the form to the IRS. All the details to get a free EIN here . EIN is free and you can apply for it yourself, but if you do not have time to deal with the EIN application process after the company is established, you with a service at an affordable price .

Does the Company Require a Bank Account?

Once your LLC company is formed and your company's EIN is received, it will be very advantageous for you to open a bank account that is legally supported by Amazon. Now, thanks to digital banks such as Wise or Mercurybank, you can open a bank account that supports USD currency in Usa from where you live, without having to go to Usa.

Especially Wise corporate is a great platform where you can easily open an account within 24 hours and provide you with account information in dozens of currencies immediately after the account is opened. In fact, when you open a Wise corporate account for your LLC company in Usa, it also provides an IBAN number in TRY currency on behalf of your company. With Wise corporate, transferring money to your country, including Türkiye, is very cheap and fast. With Wise, supported by Amazon, you can transfer the USD money you earn on Amazon to your TRY or USD account in your country within minutes.

If you want to open a Wise corporate account for your LLC company, you can check out our step-by-step guide

Conclusion

If you want to test how the online business you will start on Amazon will work, you can start with an individual account. However, if you are serious about selling on Amazon and growing your business, or if any of the reasons we mentioned above apply to you, forming an LLC company for Amazon will provide you with many advantages.