Is It Legal to Buy and Resell Items?

ByNina Kaufman

Opinions expressed by Entrepreneur contributors are their own.

I have a home-based clothing store. I'm wondering whether it's legal for me to buy items on sale in retail chain stores and resell them through my business. I know I could sell the items on eBay as an individual, but I'm wondering whether the laws are different somehow when I'm running a business.

Generally, it’s not illegal to resell an item that you have legitimately purchased. Once you have purchased something at retail it is yours to do with as you choose. Manufacturers tend to have little or no control over a product past the first customer they sell to.

However, if you are planning to do this as a business, a couple of issues arise. First, you will have warranty issues. If you run this business not as an official reseller but as an "under the table" reseller without an arrangement with the manufacturer, you risk invalidating the warranties that they provide to the first consumer, but not to the customers to whom you’ve resold the goods.

Second, there are trademark issues. If you’re using manufacturers' logos to advertise the products you’re reselling, you need their permission. Without it, you run the risk of getting embroiled in a trademark infringement lawsuit -- especially if your business does well and no longer flies under the radar.

第三,有营业税问题。与你的曲线nt business model (buying retail and then reselling), you’ll have two levels of sales tax. You’ll need to pay to obtain the goods, and your purchaser will need to pay when you sell the goods. You could look into getting a reseller’s permit, but to get a reseller’s license you first have to enroll with your state tax department, which involves getting a sales tax ID number. And messing up on sales tax can involve penalties and interest being inflicted on you personally. You can’t hide behind your corporate entity if they arise.

In short, you have some thorny legal and accounting issues here. If you’re determined to move forward, be sure to get sound professional advice so that you’re protected.

Wavy Line

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under herAsk The Business Lawyerbrand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes theMaking It Legalblog.

Editor's Pick

Business News

What Is a 'Lazy Girl Job'? New TikTok Trend Empowers Women to Work However They Want

The trend began as a way for women to find more free time during their days.

Business Process

The Strategy You Need to Make Sure Your Company Can Keep Up in Today's Business World

Discover a superior alternative to a traditional business strategy that prioritizes adaptability, innovation and speed in execution, explores its benefits for entrepreneurs, see real-world scenarios and learn core principles and rules to propel organizations forward with clarity, simplicity and action.

Devices

This Versatile MacBook Is Only $299.97 During the Back-to-School Sale

Fid out how to get a MacBook Air that's sleek, portable, and reliable for a great price.

Business Ideas

The Top 10 Home Business Ideas for 2023

Can't figure out which enterprise you should launch in 2023? Check out 10 stellar home business ideas to get inspiration.

Thought Leaders

I Pitched 300 People a Day For 1 Year — and Learned This Impactful Entrepreneurial Lesson

After working myself to the bone pitching 300 people each day for one year, I came out of that experience as a new man — but surprisingly, an unhappier one. Here's what I learned.