Do I need a Business Bank account starting off in ecommerce?

I wouldn't get a Business Bank account until you see how things go. Depending on what product you are selling some drop shippers will require an EIN number. Best of luck!

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RobinInTexas

11 years ago

Originally Posted by rodsav

I wouldn't get a Business Bank account until you see how things go. Depending on what product you are selling some drop shippers will require an EIN number. Best of luck!

You can get an EIN from the IRS, all you have to do is tell them you "plan to have employees" in the future. When I got mine, I did it online and it was instant.

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Joe Stewart

11 years ago

Originally Posted by RobinInTexas

You can get an EIN from the IRS, all you have to do is tell them you "plan to have employees" in the future. When I got mine, I did it online and it was instant.

I just got mine on the phone last week and it was very easy.

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t3c1992 11 years ago

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- sween 11 years ago
  
  What type of business entity are you guys using?
  sole proprietor, LLC, S Corp., C Corp.?
  
  Thanks.
  
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t3c1992

11 years ago

Originally Posted by RobinInTexas

You can get an EIN from the IRS, all you have to do is tell them you "plan to have employees" in the future. When I got mine, I did it online and it was instant.

I also live in Texas. did you have to get a reseller certificate?

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OnlineStoreHelp

11 years ago

As long as you are a sole proprieter you do not need a business banking account. You can use a personal bank account and credit card. Go open a Capital One 360 checking account and then you have a segregated account for your business. Same thing with a credit card (you will need it to drop ship), get a card with rewards and cash back specifically for that business. Makes accounting and book keeping easier.

That being said, you have to spend some money to get started. Most legitimate drop shippers will not work with you without some type or resale certificate. And most likely you will want a DBA (Doing Business As - Ficticious Business Name) so people think they are doing business with xyz company instead of their card statements showing Joe Shmoe.

Someone above said a personal paypal account but that is wrong. You need a business account to take payments off eBay and on eBay if I am correct. It doesn't cost you anything for a business account but they will ask for documents.

You don't even need an EIN if you don't want, just makes it easier so you don't have to use your personal Social Security Number. Your best bet is to scrounge a couple hundred bucks together to at least get started. I don't see how you will be able to start with zero money.

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sween

11 years ago

Originally Posted by OnlineStoreHelp

As long as you are a sole proprieter you do not need a business banking account. You can use a personal bank account and credit card. Go open a Capital One 360 checking account and then you have a segregated account for your business. Same thing with a credit card (you will need it to drop ship), get a card with rewards and cash back specifically for that business. Makes accounting and book keeping easier.

That being said, you have to spend some money to get started. Most legitimate drop shippers will not work with you without some type or resale certificate. And most likely you will want a DBA (Doing Business As - Ficticious Business Name) so people think they are doing business with xyz company instead of their card statements showing Joe Shmoe.

Someone above said a personal paypal account but that is wrong. You need a business account to take payments off eBay and on eBay if I am correct. It doesn't cost you anything for a business account but they will ask for documents.

You don't even need an EIN if you don't want, just makes it easier so you don't have to use your personal Social Security Number. Your best bet is to scrounge a couple hundred bucks together to at least get started. I don't see how you will be able to start with zero money.

Thank you very much. That was very helpful.

Thanks

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OnlineStoreHelp

11 years ago

Originally Posted by mikedcarroll

I thought I would add something-a separate account and credit card might be nice for tax purposes. Sometimes (I don't know where you live so I can't vouch for that) the government is willing to be a little more lenient with certain deductions if you try to keep things separate between the ecommerce site and your personal funds. Make sure to keep good records too just in case.

That is a good point but a little less applicable when you are a sole proprietor since everything kinda gets mixed together. It becomes more important when you have an LLC and Corp since you want to be careful about mixing personal and business. That means even if you have to pay a card off with personal funds, do a deposit into your business account to make the payment. At the very least it protects your corporate veil. That being said, your accountant can tell you this better then me.