GetCrafty Craft Facts

Q: I live in Boston and have been designing and creating beaded jewelry as a hobby, so far. Many of the people who have seen my work have asked me to make items for them, and now a clothing boutique owner who commented on the jewelry I was wearing has said she'd be interested in selling some of my jewelry designs in her store. I would be doing this to supplement, rather than replace, my "day job" (you know, the one that pays the rent and the cost of all the gorgeous beads!), but I would like to do some direct sales as well (via an online catalog, 'eBay' auctions, word-of-mouth referrals, etc.). I don't expect to get rich on it but it would be great to be able to make at least a part of my living doing something this soul-satisfying.

A: I've been reading voraciously to try to figure out what licenses, filings, etc. I would need to do in order to be "legit" in terms of: - buying supplies at designer discount prices - selling to retailers/boutiques - selling direct to end-customers I'm still confused. I gather that, as a sole proprietor, I can do business under my own name without registering as a business, but it probably wouldn't be profitable if I have to continue to buy supplies at retail, and I am under the impression from the posts I've read that most suppliers require a resale certificate, a business license, and more, in order to sell to designers at a discount, even though the prices are still higher than wholesale. Usually all you have to do is get a sales tax number. You can use your own name for this in most states. Check with Mass sales tax dept. Registering a name isn't necessary unless you want to assure that no one else uses it. I'm not sure of this, but I think you have to go through a lawyer. Be aware that for most wholesale or designer discounts there is a minimum purchase. this depends on the vendor, could be anywhere from $25 - 300. One drawback to having a resale number is that in most states you need to file a sales tax form every quarter. That is if you sell stuff or not. You can be fined if you miss a filing. After a year you can usually apply for yearly filing if you don't have a lot of sales. Just a few more comments - the previous post had a good explanation of the different licenses: -State sales tax ID - to buy w/o paying sales tax and to charge sales tax on direct sales. -Business ID or license - to register you as an official business with a separate business name. Some suppliers require a tax id for "wholesale sales", but if you are buying mail order from an out-of-state company, you will not pay sales tax anyway. -If you are going to sell (direct-to-the-public) in more than one state, your business is registered where you live, but I think you need a sales tax # for each state (someone help me out here - my home state doesn't HAVE sales tax, so I might be a special case). Remember, for the botique sales, tax is the botique owners problem, not yours (tax is paid by the final user). As a sole proprietor, your income is reported on your regular state and federal tax forms,(using Schedule C) under your social security number. In some states, the tax id # is your 'SSN' also. The 'IRS' suggests that you get a federal business ID number (not required unless you have employees) just so that you are not giving out your 'SSN' to all those suppliers.