A person or a company that sells goods and services on an online platform or marketplace is referred to as a marketplace seller. The phrase is frequently used in relation to e-commerce, when vendors use the infrastructure and market reach of online marketplaces like Amazon, eBay, Etsy, and Walmart to offer their goods to a larger customer base. Most of the time, marketplace vendors are independent companies that run independently of the marketplace platform, but they advertise their products, process orders, and provide customer care through the platform.
Depending on where they are located and how their businesses are set up, marketplace sellers are subject to a variety of taxes and laws. For instance, you must pay gross receipts tax on your sales if you are a marketplace seller in New Mexico. A form of sales tax known as a “gross receipts tax” is calculated based on your entire revenue from sales, including shipping and handling charges. Depending on the kind of goods you sell and where you sell them, the tax rate varies. On the website of the New Mexico Taxation and Revenue Department, you can either pay gross receipts tax online or by mail.
Marketplace vendors have a choice of three different legal forms for their businesses: sole proprietorship, LLC, or corporation. The simplest and most typical type of business ownership is a sole proprietorship, in which a single person owns and runs the company. As a sole owner, you are personally responsible for the debts and liabilities of the company, and if the company is sued or files for bankruptcy, your personal assets could be at danger. A sole proprietorship, on the other hand, is reasonably simple and inexpensive to set up, and you have total control over the company.
However, a hybrid business structure called an LLC (Limited Liability Company) combines the advantages of a corporation and a partnership. An LLC offers its owners limited liability protection, which insulates their personal assets from the debts and obligations of the company. In terms of taxes, LLCs are also adaptable because they have the option of being treated as a corporation, partnership, or sole proprietorship. However, compared to setting up a sole proprietorship, an LLC entails more fees and paperwork.
In conclusion, setting up shop as a marketplace vendor can be a successful business venture, but it also entails a number of duties and commitments. Regardless of your business structure, you must abide by tax rules and regulations if you are a marketplace vendor. Whether you decide to run your business as a sole proprietorship, LLC, or corporation, it’s critical to comprehend the benefits and drawbacks of each choice and pick the one that best meets your requirements and objectives. You need a detailed business plan, a registered business name, a tax identification number, and, if your state requires one, a sales tax permit to launch a firm.
As of 2021, New Mexico had about 160,000 small enterprises, according to the Small Business Administration (SBA).
I’m sorry, but I don’t have access to current information on how many businesses there are in Albuquerque, New Mexico. However, Bernalillo County, which contains Albuquerque, had about 25,000 enterprises, according to the U.S. Census Bureau’s 2018 County Business Patterns.