No, you don’t need a business license to start selling on Amazon, especially if you’re listing everyday products like books, clothing, or home goods as an individual seller.
However, if you’re selling restricted items like health products, alcohol, or anything that requires regulatory approval, you may be legally required to hold a license. And if you plan to collect sales tax or register your business formally, it may also be necessary.
This guide covers exactly when a business license is required, when it’s not, how it compares to an LLC, and what steps to follow if you’re legally expected to get one.
Does Amazon Require a Business License?
Let’s clear the air.
A business license is an official approval that allows you to carry out business within a defined area.
Amazon itself does not require a business license to create a seller account or begin listing products. It will only ask for basic tax and identity verification.
That said, just because Amazon doesn’t ask for one doesn’t mean you’re off the hook. You are still responsible for meeting your local, state, or federal legal requirements, especially if you’re selling regulated products or operating as a formal business entity.
To better understand how different aspects of selling on Amazon, like the Buy Box, can affect your business, check out our article on What Is a Buy Box on Amazon?
When is a Business License Required?
There are a few specific cases where having a license or permit becomes necessary, depending on what you’re selling, where you’re located, or how you operate. Here’s a simple breakdown:
| Situation | License or Permit Needed? |
| Selling everyday items on Amazon (books, apparel, home goods) | No |
| Selling supplements, alcohol, firearms, or regulated items | Yes |
| Selling only on Amazon using FBA | Usually not |
| Selling on Amazon and your own website (e.g., Shopify) | Often (for sales tax permit) |
| Buying inventory from wholesalers/suppliers | Often (reseller or sales tax permit) |
| Living in certain cities (like San Francisco, NYC) | Possibly local business license |
| Running an LLC in certain states | Possibly license or registration at local level |
If you’re just starting with Amazon, understanding key product identifiers like ASIN numbers is crucial. Learn more about them in our article on What Is an ASIN Number?
Let’s break it down in detail:
1. Regulated Product Categories
If you’re selling federally or state-regulated products, you may need a business license or special permits. This applies to items such as:
- Health products or supplements
- Alcohol or tobacco
- Firearms or weapons
Federal rules only apply in narrow cases – like when selling food or drinks across state lines – but they do exist. Always double-check if your product falls under such categories.
If you’re looking for alternative ways to generate income through Amazon, check out our tips on How to Make Money on Amazon Without Selling.
2. Local Business Licensing Rules
Even if Amazon doesn’t ask for a business license, your local city or county might. This varies widely:
- Cities and counties (especially in states like California or New York) may require home-based businesses to be registered.
- Some local jurisdictions have strict zoning or operating license requirements for running any business, even an online one from your home.
For example, Los Angeles or San Francisco may require a general business license even if you’re just selling on Amazon.
When selling on Amazon, it’s important to understand FNSKU barcodes for inventory management. Our detailed guide on Amazon FNSKU Barcode explains everything.
3. Sales Tax Permits (Seller’s Permits)
While Amazon now collects and remits sales tax on your behalf as a “marketplace facilitator”, you might still need a sales tax permit if:
- You also sell on your own website (like Shopify)
- You want to avoid paying sales tax when buying inventory from suppliers
- You store inventory in a warehouse or FBA location in a state, creating physical nexus
Even though you’re selling on Amazon, some states may consider you to have an “economic nexus” if you cross certain sales thresholds (e.g., $100,000 or 200+ transactions). This could trigger the requirement to register and file sales tax returns in that state, even if Amazon is handling collection.
4. Starting an LLC or Corporation
Forming an LLC doesn’t require a business license by default, but depending on your state or city, registering your business may trigger local licensing requirements. So if you decide to go from sole proprietor to LLC or S-Corp, make sure to check if a general operating license is part of that process.
If you’re considering using Amazon FBA, it’s essential to evaluate whether it’s right for you. Read our insights on Is Amazon FBA Worth It?
How To Obtain a Business License?
If you find that your product type or location requires a business license, don’t worry, the process is manageable and often inexpensive. While the exact steps vary by state and city, here’s a general breakdown of what’s involved:
1. Choose a Business Structure
Start by deciding how you’ll legally operate your business. The main options include sole proprietorship, partnership, LLC, or corporation.
- A sole proprietorship is the simplest, but it offers no liability protection.
- An LLC is a popular choice for online sellers as it separates personal and business assets while keeping paperwork minimal.
Once you’ve chosen your structure, register your business name (if needed), select a registered agent, and file the Articles of Organization with your state’s Secretary of State. After that, apply for a Federal EIN (Employer Identification Number) through the IRS—it’s free and required for most business accounts.
For those sourcing products from Alibaba to sell on Amazon, our comprehensive guide on How to Sell on Amazon from Alibaba will be very helpful.
2. Identify Which License(s) You Need
Not all licenses apply to every business. Based on your location and products, you may need:
- Federal License – Required if you sell regulated items like firearms, alcohol, or tobacco.
- Seller’s Permit / Sales Tax Permit – Needed to collect and remit sales tax in certain states, especially if you’re also selling outside Amazon (e.g., on Shopify).
- DBA (Doing Business As) – Needed if you’re operating under a different business name than your legal entity name.
You can usually find license requirements by checking your city or state’s business portal, or by searching “[your city] business license requirements” on Google.
3. Apply Through the Correct Government Office
Depending on your jurisdiction, you may need to apply at the state, county, or city level. Most states offer online applications through their official business websites.
A good starting point is the U.S. Small Business Administration (SBA) website—it can direct you to your local licensing office and help you understand which permits apply.
5 Basic Things To Get Started as an Amazon Seller
Now that we’ve covered when a business license is needed and how to get one if required, let’s shift to the essentials: what Amazon actually asks for when setting up your seller account.
Setting up your account requires the following info and documentation.
- Online Mailing Address: You should use your primary email address to access your account and stay informed about the updates. You can also create a new one for your Amazon account so you can filter out the notifications.
- Banking Data: Account setup requires your banking info. The bank account title must be the same as your business, so you can receive your funds without any hassle.
- Working Contact Number: You need an active phone number to ensure smooth verification.
- National ID: The verification isn’t limited to the phone number only. You can use your driving license or passport to complete the verification process.
- Fiscal/Tax Data: The last thing on the list is the Tax Identification Number, aka ‘TIN’.
To optimize your advertising campaigns, understanding Amazon Tacos is essential. Learn more in our article on How Amazon Tacos Can Transform Your Advertising Strategy.
FAQs
Do I need a business license to sell online in the US?
Not always. Amazon doesn’t require a business license to start, but you might need one depending on your local laws or the type of products you sell.
Can you sell unlicensed products on Amazon?
Selling items that are illegally copied, reproduced, or manufactured is not allowed on Amazon.
Do you need approval to sell on Amazon?
Yes, in some cases, you need approval from Amazon to sell certain products, like health, groceries, or branded items.
Conclusion
Let’s sum up our question: Do you need a business license to sell on Amazon? You do not require it for selling most of the consumer goods. However, for some specific categories like firearms and alcohol, you need a license.
In order to acquire a license, you need to form an LLC, register yourself with the IRS, and apply for an EIN. A lawyer can help you choose from different available options, like Federal or DBA.
