Hi Shopify community,
I am really interested in opening up a dropshipping store. However, I want to, of course, do it legally. I live in NJ, USA. I read online that you don't technically need a license or permit to begin with but later you might. Also, I read that it is recommended that you keep the dropship business separate from your personal finance and that it is better to get an LLC.
I am a little confused as to what the process is. I would appreciate if you can shed some light on this confusion and share your knowledge here. I really want to start this business this year.
Thank you in advance!
Hi @sofi2233! Gabby here from the Community Engagement team at Spocket.
You're correct! Being that you're just only starting with your dropshipping business, you're not really required to acquire a license or register your business. These are certifications you need to get if you're concerned about credibility, if a major expansion of your business is in the works, and/or you want to receive the benefits that come with having a license or being registered.
However, I'd go ahead and say though that since you're based in the US, and I assume you'd be catering to customers who are also in the US, it'd be ideal to source out items from a supplier/s who is/are based in the US. Since I assume you already have some knowledge of how taxes work in the US, the process won't be complicated for you. Also, doing this allows you to ship products in as fast as 1-3 days - which is a good way to start your dropshipping business and build credibility. Spocket makes this possible, and since you're in the process of setting up your store, I'd go ahead and suggest that you add Spocket to your list of dropship suppliers that can source out from for the products on you store.
We have a number of suppliers who are based in the US and who offer a wide selection of items that could suit your store based on your preferences and business goals.
If you're interested, you can go ahead and check out Spocket's website and sign-up to be a free member! Being a free member gives you access to our catalog - you can only view the items though. If the items we have suit your business, then you can go ahead and subscribe to any of our plans to be able to import them to your store. Hope you can find the time to check us out!
You probably don’t need a ‘reseller permit’ since you are not taking deliveries or warehousing at your place of business. However, you are responsible for paying income tax on any profits.
If you are selling over a certain amount, you may need to get a sales tax number and remit sales taxes to the appropriate government department.
Hello @gabfromspocket Gabby, thanks for your reply.
I called a NJ business action site and they said that I should get registered before I even open my store. They sounded pretty serious. They asked me how I would run the business, as in a sole proprietorship or LLC... ( i was thinking LLC, but isn't it expensive to set up one?).
In regards to Spocket, I was searching for products, and it seems limited? I made the free account, will i have to upgrade to Pro to see more products in my desired or interesting niches? Of course, I would want to make sure that the products exist in the app and that they will ship in a short time. Also, it seems product variations and designs are limited I have noticed that some products take 8-14 days which is like Aliexpress Oberlo? Can you please expand on this? I would really appreciate it! Thank you!
Thanks so much for the response. Well I stand by what I said about registration, but I guess since you consulted with an organization about it and they suggested that you register, then you definitely can.
Regarding the products you viewed, may I please know what specifically? I might be able to help you out with your search. While we do have items that ship 8-14 days, we also have ones that ship as fast as 3-5 days. Also great that you signed up to explore Spocket!
Really? because shopify seems to believe spocket, modalyst, and many other apps on their store are selling unlicensed products (many like modalyst say they have licenses) and then demanding stores provide licenses when it is LITERALLY on their site (So shouldn't they know if these apps have the licenses? Shouldn't they have asked before they were placed on their site?). So I would not recommend ANYONE to use this website, shopify decides at a whim what is allowed or not allowed. It's a scam. They allow you guys to scam business owners thinking they are being legit only to have their entire livelihood to be destroyed by y'all. Since they approve of it, they clearly are okay with scamming small business owners.
I'm based in the USA.
Reselling other companies products? (Like already branded products) I don't need any license? I might get sued if I sell their products without their permission isn't it.