MO D U L E 4

From arbitrage
Module 4 to private label:
4 major things to consider: An introduction to
1: Names
▶▶ Company name
different methods of
▶▶ Amazon store name selling on Amazon
▶▶ Brand/product line names

2: Administrative and accounting

▶▶ Where to establish your company
▶▶ EIN
▶▶ Sales tax ID numbers
▶▶ Bank accounts
▶▶ Accounting software
4: Insurance
3: Intellectual property (IP) ▶▶ Product liability insurance
▶▶ Trademarks
▶▶ General liability insurance
▶▶ Patents
▶▶ Workers’ comp (if you have employees)
▶▶ Copyrights

Names
Company (corporate/business) name:
◊◊Set up an entirely new company.
◊◊Even if you have an existing business (such as on
eBay, Etsy, or Shopify), establish a new business just
for your Amazon business.
◊◊Use a generic name - NOT the name of your
product line since you’re not sure which products
will succeed yet, and NOT the name of your store
on Amazon.
▶▶ Your store name on Amazon (where it says
“Sold By”) can (and should) be different from the
business/company name you establish now.
▶▶ Your business/company name is the entity
Amazon will pay your earnings to.
◊◊ If you need help, look up business names that are
available that ALSO have website names that are
available (so you can establish your own domain
for your business’ website).
▶▶ Namestation.com
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▶▶Bustaname.com
▶▶ Knowem.com
◊◊ These websites will check trademarks as well, so
that you can use the name in future branding,
social media, etc.
◊◊ Competition can spy on you more easily (such
as looking up your import records) if they know
your company name, hence why it is strongly
recommended that you make your company
name different from your (public) store name.
Store name on Amazon:
◊◊ Verify that the name is free and isn’t an existing
store on Amazon.
◊◊ This is the name that appears publicly on Amazon,
such as under “sold by” in a product listing.
Brand name of products:
◊◊ Something ideally in theme with your
product offerings.

Where to set up your company

Option 1: If you live in the US, set up your company in the state where you live.
◊◊This is the easiest/straightforward option.
Option 2: If you live outside of the US or if you live in the US and want an alternative option.
◊◊Delaware: has a lot of protections and laws favorable to entrepreneurs.
◊◊Wyoming: also favorable protections and laws for small businesses.
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▶▶Wyomingagents.com
▶▶ Set up a company for about $50.
▶▶ $25/year report and filing fee.
▶▶ Protections prevent others from easily spying on your company data.
◊◊ Caveat: you may pay double taxes if you establish your business outside of your state of residence.
▶▶ - Wyoming can be a great option to set up an LLC if you NOT based in the USA and you want to have a
company in the USA.
▶▶ - However, for US residents setting up a LLC in a state other than the one you reside or operate your
Amazon business in could lead to double taxation (California for example).
▶▶ - For Canadian citizens, some types of business structures in the USA can also lead to double taxation if you
expatriate money back to Canada (as salary for example).
▶▶ - Always check with your accountant or lawyer to see what is most advantage for you and your specific
situation and goals.When in doubt, if you are a US citizen, consider setting up your company in the state you
do business in (usually the same one you live in).
Being US-based makes it easier to sell your company.
◊◊ Often, buyers use US-based loans to purchase your business, so being a US-based company makes it easier
for interested parties to finance a purchase.

Always check with your

accountant or lawyer to
see what situation is most
advantageous for you
based on your situation
and needs.

Administrative and accounting EIN - Employer Identification Number:

Bank accounts
◊◊ Open your bank account locally, even if your
business is out of state.
◊◊ Typically, you can open bank accounts remotely
through larger banks; smaller banks may require
you to come in in person.
◊◊ Do NOT use your personal checking account for
your Amazon business; set up an entirely separate
business checking account.
◊◊ This is the IRS number used for your business’ taxes.
◊◊ Go to IRS.gov to set up your EIN.
◊◊ Amazon will send you a 1099 form yearly, showing
your total sales; this is reported to the IRS.
◊◊ When you file your tax return, ensure that it shows the
same amount reported on the 1099 (or more, but
not less), or you may risk being audited by the IRS.
◊◊ Provide your EIN to your importer (if you have
one) so they can keep better track of you.

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▶▶ Do NOT use your personal SSN.
Sales taxes - this is an overview, and NOT legal advice.
◊◊ Obtain a sales tax number in the state where your
business is registered.
▶▶ Also obtain one in the state where you reside, if
different from business location.
◊◊ Previously, you didn’t have to collect sales taxes
from customers unless they also lived in the same
state as your business.
◊◊ Nexus laws now require you collect sales taxes
from customers in states where you have physical
presence (such as multiple office locations).
▶▶ On Amazon, this gets tricky since you don’t know
in which warehouses across the country Amazon is
stocking and shipping your product.
◊◊ Software exists for about $30-$50/mo.
▶▶ Integrates with Amazon and tracks where to
collect sales taxes.
◊◊ See the handout for state-by-state laws - 45 states
collect sales taxes, and 5 don’t.
◊◊ Generally, we follow “Marketplace Laws” which
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have thresholds of sales values and units sold
before you need to start paying taxes.
◊◊ For now, it’s recommended you collect and pay
sales taxes for the state you live in and the state in
which your business is incorporated (if different).
◊◊ As of 2019, laws are being enacted where
Amazon is the one burdened with tax collection
(so you won’t have to do it yourself).
Accounting software
◊◊ The “Profits” tool in Helium 10 is great for an
overview of your numbers and keeping track at a
glance - but it is not a true accounting tool.
▶▶ Sufficient when starting out.
◊◊ Recommended software: Xero or Quickbooks.
▶▶ These are professional CPA-level tools.
▶▶ Or you can hire a bookkeeper, who will likely
have these at their disposal.
◊◊ A2X: software that connects your Amazon data to
the above software.
◊◊ You don’t need these softwares right on day one,
but once you start to generate sales you will need
to keep track with a proper accounting software.
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MODULE 4
IP/Intellectual property - trademarks,
copyrights, and patents
Trademarks:
◊◊ Covers a brand name, brand logo.
▶▶ “Mark” (example: Nike’s check mark logo)
▶▶ “Wordmark” (example: the word “Nike”).
••Register for at LEAST the wordmark - that’s what
Amazon wants. Mark is optional.
▶▶ ™ = not yet official (pending), but put this on
your listings to scare competitors away.
◊◊
▶▶ ® = officially registered.
Highest priority is to file for a trademark for your
brand name as this takes an average of 9 months
to approve (assuming no errors).
▶▶ Do this as soon as you know what you want to
sell, that way you can trademark a name related
to what products you’ll sell.
◊◊ The brand registry program carries several benefits
▶▶ To register your trademark in the brand registry
on Amazon, you’ll need a completed (not
pending) trademark number.
▶▶ Brand registry allows you to add photos and
videos to your listings.
▶▶ “EBC” - enhanced brand content - images
inside the descriptions of your listings, more
advanced layouts.
▶▶ Access to extra analytical data - “brand analytics”.
▶▶ More advertising options such as banner ads.
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◊◊ When you trademark your name, you need to know
the specific product categories you’re going to sell in.
▶▶ I.e.: pet food products, baby strollers, dishware.
◊◊ If you’re unsure of what you intend to sell,
trademark a more generic/broad category
of products with your name, then file a new
trademark or append the existing one later.
Helium 10 recommends:
◊◊ SellerTrademarks.com - actual attorneys involved.
◊◊ Good for US and EU trademarks.
◊◊ Trademark alternatives:
▶▶ You can obtain a trademark outside of the US
••For Amazon, you can use the international
trademark to get brand registered more
quickly in the US.
••Obtain the international trademark from
any country with an international marketplace
on Amazon (such as one of the European
marketplaces or Mexico).
••Advantages:
◘◘ Obtain brand registry access quickly.
◘◘ European trademarks take 2-3 months to
obtain vs. US at 9 months.
→→ TMDN.org/tmdnview
→→ EUIPO.europa.eu
→→ Costs about €850
6

◘◘ Canobtain this as an alternative if a
trademark already exists in the US.
▶▶ Caveats:
◘◘ If selling in the US, to enforce the trademark
in court, the trademark must be US-registered
◘◘ Amazon won’t defend you against hijackers if
you have a non-US trademark.
◊◊ Consider Chinese trademarks as well.
▶▶ If you manufacture in China, trademark your item
to prevent the factory or competitors from trying to
trademark it first (China runs on first-to-file basis).
Copyrights:
◊◊Overall, on a “work” (vs. a “mark”), such as songs,
packaging designs, concepts, taglines.
◊◊$30-$50 generally.
◊◊Excellent for protecting your unique
◊◊
packaging designs.
If hijacker copies your copyrighted design, you can
file a DMCA to Amazon, who will be obligated to
promptly remove the offending listing.
◊◊This is the best way to protect yourself against
listing hijackers.
Insurance
General liability insurance - required
by Amazon
◊◊ You will need this once you’ve been
selling longer than 3 months with $10k/mo
in sales.
◊◊ Costs about $600/year.
◊◊ Covers you in cases such as if someone
in the warehouse hurts themselves pulling
and packing your item; if a UPS driver
leaves a box at a customer’s door and
◊◊
they trip over it.
Does NOT cover product-related harm.
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Patents:
◊◊ Utility patent.
▶▶ How something works - “functionality”.
▶▶ More complicated and expensive.
◊◊ Design patent.
▶▶ How something looks.
▶▶ Approved quickly, fee is a few thousand dollars.
▶▶ Good protection vs. copycats.
▶▶ Usually sufficient for selling on Amazon.
◊◊ Check for patents before deciding to sell
on Amazon to avoid developing/sourcing a
product only to find out someone else has
◊◊
protected the design.
How to check?
▶▶ Hire a lawyer - they can check for a fee.
▶▶ Hire a local law firm that specializes in IP law.
▶▶ DIY - patents.google.com
◊◊ If DIY, file your patents here:
▶▶ Legalsherpa.com
▶▶ Trademarkia
Product liability insurance - insures you against
someone being harmed by your product.
◊◊
Example: if you sell exercise equipment
and someone tears a ligament using it,
and they try to sue you.
◊◊ Only procured from a specialist.
◊◊ Can get expensive.
◊◊ Some skip this when starting out, but there
is a risk involved.
◊◊ See our recommended companies for
product liability insurance.
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MODULE 4

Note about
selling locations
You can be based outside of the
US to sell on the US marketplace
You do not need a US bank
account, BUT:
• You will be charged a 3-4%
exchange fee when Amazon
deposits your earnings in your
foreign checking account.
Business setups - check with your legal advisor for best
option for you
◊◊ C-Corp - big corporations, “inc.”
▶▶
Unlimited shareholders allowed.
◊◊ S-Corp - limited
▶▶ Typically about 25 shareholders.
▶▶ Profits pass through the personal tax returns of the shareholders.
◊◊ LLC - limited liability company (recommended for Amazon sellers).
▶▶ Taxes are much easier to navigate.
▶▶ Single member (you) ok, multiple members ok too.
▶▶ Everything goes on your personal tax returns.
▶▶ Business gets paid, profit or loss is transferred to your personal tax return.
▶▶ Minimizes your paperwork.
◊◊ Sole proprietorship - NOT recommended for Amazon.

• You cannot sell from certain

In conclusion:
countries - see Amazon’s list.
◊◊ Obtain a trademark ASAP.
◊◊ Carefully review the above as you set up your business.
Ping Pong Payments and other
sites specialize in moving money ◊◊ Obtain legal advice where necessary.
if needed.
• If you are internationally-
based, these sites set up a
virtual account in the US in
which Amazon can deposit
your earnings without the
exchange fee, then you can
move the money from there to
your bank account overseas.

• You can also do this as a US

seller selling on international
marketplaces (like Amazon UK).

Best marketplace to start is in the US,

followed by Germany, UK, Japan.

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