Could anyone provide some insights on the following questions?

Hi everyone,

I have a question regarding opening an Amazon seller account in the USA. A friend of mine, who is a resident in the USA and currently employed, is looking to start selling on Amazon.

  1. Taxation: What kind of taxes will he need to be aware of when selling on Amazon? Are there specific tax forms or registrations required?

  2. USA Laws: Are there any specific laws or regulations he needs to follow as an Amazon seller? This includes any business licenses, permits, or compliance requirements.

  3. Income Thresholds: Is there any income threshold or specific criteria that might impact his taxes or legal obligations?

  4. Employment Considerations: Given that he is already employed, are there any considerations or potential conflicts he should be aware of when starting this side business?

  5. Multiple Platforms: Can he also sell on other platforms like TikTok Shop and Facebook through dropshipping, or are there any restrictions that limit him to only one platform?

Any advice or resources would be greatly appreciated!

Thank you

  1. Taxes. If he simply opens an Amazon account under his name, any profit or loss will go against his normal income taxes. If he makes $50,000 in profit in the year, he adds that to his yearly income and pays the irs. If he loses $50,000 that year, it takes that away from his income and he will pay less to the irs. That’s the simplest scenario. If he sets his business up differently, it can change. But he needs to ask.

He should get a tax ein from the irs. That way he isn’t giving everybody his ssn#. And, I always tell people to get a sales use and tax permit to show all the people he buys from so he doesn’t pay sales tax on items he intends to resell. And distributors will ask for it.

  1. No specific permits that I have not mentioned.

He should get a LLC to limit liability if he is sued. And, get business insurance, again in case he is sued. Amazon does require it.

  1. No income limits, really. Once above a certain volume of product, Amazon will ask for proof of business insurance.

  2. No consideration on the Amazon side for being employed. But he should check with his current employer to see if there is a signed agreement for starting a side gig. Usually no problem.

  3. He is allowed to sell on any platform he wants. But you mentioned dropshipping. That is against Amazon’s policy. His account will be suspended if he gets caught dropshiping to Amazon customers.

Yes, many sellers get away with it but Amazon does suspend accounts and keeps your money if you do it.

The best (and funnest) resource is to watch Nikki Kirk on YouTube. She knows her stuff. She is entertaining. She has videos on most basic subjects. Plus, she doesn’t say you have to do it my way. Only that this is what I did. It works for me.

Last bit of advice. Don’t give anyone any money to mentor you until you have sent in at least one shipment of products to Amazon. That way you know your weaknesses. And I did pay for training with Nikki Kirk. But that doesn’t mean your friend will like her.

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1 - Amazon in the USA pays collects taxes from your customers and remits them to the state’s gov on seller’s behalf, anyways you still have to quarterly file your taxes online and that is already paid by Amazon so you have to file zero in this case

2 - Register an LLC, get a reseller certificate, EIN number, bank account and an identification document like driving license

3 - There are no thresholds in the USA as the tax is fixed there is no tier system there, each state has it’s own tax %age

4 - There is not any as the gov is being benefited with this.

5 - Depends on one’s capability, time management, and skills but better to get VAs as this will speed up with your work and will allow you to spend more time for yourself and your family, also someone else’s kitchen will run because of you.

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Point number 1 and 3 speak with an accountant ( I work with Tam Accountanting )

2- get an LLC, reseller certificate, EIN and bank account

4- no issues and no one should know this

5- no limitation

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Taxes:

Federal tax to IRS annually.

Sales Tax Filing quarterly to the state you operate in. It’s only filing and not paying anything as it is already paid by Amazon on your behalf).

other taxes depends on the state you operate in. TEXAS for instance is income tax free state, however franchise tax needs to be filed annually. It is paid only if you meet the income threshold of $2.4 million.

There is BOI report that needs to be submitted annually.

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Where and how can I hire a good and honest VAs?

My friend is living in Virginia, so how much this state tax ? And where I can check other state taxes.

Which bank account physical or virtual?

That’s really hard… Most of the time you would find people that just want to gather clients and will seldom work for you.

Better is to set profit shared based work with them. Involve VAs stake at work. Make them realize that if you profit they will profit too but if you lose money then they will have to lose that too…

Salary based will never care if ur business scales or not.

Make an agreement and make your agreement more in your favor then them afterall it is your hard work and business that you are sharing with them. If they don’t agree on even single point say goodbye and find a new one