Hi DP, I want to set up several E-commerce stores for a selection of niches I have researched. I currently live in the UK and want to contact US manufacturers and drop-shippers and work with them to deliver to customers within the US and if available, overseas. What would be the best way for me to persue this in terms of operating legally. Is there anything I should know such as taxing issues. Do I need a USA company or a UK company? Who do I need to declare my earnings to? Can I pay the suppliers/manufacturers and dropshippers with my UK credit/debit cards? I would prefer to set up a Uk sole trader company, and then contact the suppliers, negotiate prices. Then once a sale is made, pay the supplier for the product and they ship it out for me. Is it as simple as that? Sorry if this is hard to understand, but I have no idea where to start (legally trading wise-)
You could perhaps begin with some of the Affiliate schemes to see how well sales go. In practise it is no different than taking orders and having a company deliver. Although you are only paid commissions rather than handling the sale yourself and deciding your own fee. There are many niche affiliate schemes available. For your questions about tax. I complete my own tax returns in the EU for a similar business and the rules are basically:-- 1. Register your business with the commerce office and they will pass your details on to Inland Revenue who will issue you a tax number. 2. You declare your business earnings on the tax returns. Overseas transactions do not incur VAT, so you do not need to worry about that. Tax forms have a section for overseas transactions distinct from local costs. 3. The companies may not want to accept credit card payments because these incur % based fees deducted by the cc company. Direct Debit payments to their account using Internet banking is the way to go. 4. Contacting suppliers to negotiate prices may not be successful unless you are making a very large order. Manufacturers will generally only ship in bulk, and are not interested in distributing individual products. If you want a distributor rather than stocking the products yourself you would probably need to enrol as an affiliate with some small businesses under their terms. If your sales prove significant, then you could probably negotiate a better deal for yourself later on. You can get affiliate payments on custom orders as well. I had an affiliate scheme with a manufacturer of quality museum replica pieces, and a visitor to my site enquired about having a marble replica made of a classical statue in one museum. I sent an email on to the manufacture, and if the customer had proceeded with the order I would have been paid a commission on the sale. With a custom-made piece like that bearing a $40,000 price tag, the commission would have been significant. It is somewhat rare though, because a customer could also enquire of the seller directly and leave you out of the loop.