I'm looking to open my first e-commerce store – going to start with dropshipping as I've found some US suppliers who look promising, and then hopefully move to wholesale in the future if things work out, which I hope they do.
I have a few questions about the process & I really appreciate anybody who takes time out of their day to read this & respond! I'd like to also point out that I'm not interested in using sites like aliexpress, alibaba, etc., as the quality seems to be low and the shipping times can be exceptionally long. I'm not dropshipping to "get rich quick", but rather using it as a method to start a store that I'm passionate about, and since I'm a beginner with a somewhat limited budget, I feel as though this is the best place to start. With that being said, here are my questions:
- Many US dropshipping suppliers require that you have an EIN, even when you claim your business as a sole proprietorship. Does an EIN ever cost any money/will I ever be met with any fees? If I get an EIN & then never use it are there any negative consequences from this? I read somewhere that somebody was charged $800 and it somehow related to them not using their EIN. Not sure how accurate this is, though.
- Most US dropshipping suppliers also require a sellers permit, and a business license. Is this truly a headache of a process + is it expensive? I've seen so many articles that say it could cost around $10 a year, others say it's around $500. What's the truth?
- Is it recommended to start out as a sole proprietor as it is currently just me operating the store? I'd consider my products to be low risk as it's women's clothing & other fashion accessories.
- When it comes to taxes, do you just need to keep track of every expense you have, and every time you make money? Could you simply use excel for this and bring it to an accountant once it's time to pay your taxes?
- Is it actually plausible to register as a business when I'm just starting out? What happens if the business fails, and I want to close it down? Is there a fee for this? I just want access to good suppliers with high quality products, so for me it seems like it makes sense.
Again, for anybody that took the time to read this & respond, thank you so much! 🙂 I've been in a rut for a few months now and I'm getting excited about starting my own business!
ALSO would like to add that I do have a large social media following and the store I'm opening relates to the niche that the social media account is in, so I will hopefully be able to save some money on advertising.