Is an LLC Necessary for Successful Dropshipping? Here’s What You Need to Know

If you’re just getting into drop shipping, it’s exciting. The idea that you could sell products without even having to stock items is thrilling. You probably want to get started today, but you’re also wondering whether or not you need an LLC in order to be successful in drop shipping. Here’s the answer.

You should definitely get started on the right foot, and that includes getting an LLC so you could run your business properly. We had the opportunity to talk to international lawyer Dmytro Kondratiev who is the founder and legal board advisor for, and he gave us some solid reasons as to why you should definitely get an LLC when it comes time to start your drop shipping business!

Lets dive into the reasons why an LLC is important when you’re dropshipping.

Limited Liability Protection

One of the biggest reasons you should get an LLC for your business is to be protected just in case anything goes wrong. Dmytro stated that due to many parties being involved within a Drop Shipping business (suppliers, carriers, and customers), misunderstandings could happen frequently.

If you don’t have an LLC, and a lawsuit arises, they could come after your personal assets. However, if you do get yourself an LLC, it will protect you from personal liability.

Professional Image

The second thing he brought up was the fact that having an LLC gives you a professional image. This goes in the same boat as having a website. If a potential customer doesn’t see you’re a legitimate business, they’re probably not going to want to buy from you.

This is especially important when you’re selling online (like a drop shipping business) because it takes people a little bit more time to gain trust when it comes to buying things online.

Tax Benefits

The last benefit that Dmytro brought up was tax benefits. He stated that one potential benefit of forming an LLC for your drop shipping business is the potential for tax savings. LLCs are a type of business structure that offers certain tax advantages to the owners, also known as members.

One of the key tax benefits of an LLC is the ability to possibly choose how the business is taxed. Depending on the number of members in your LLC and the type of business you operate, you may be able to elect to be taxed as a sole proprietorship or partnership, rather than as a corporation.

This can result in a more favorable tax treatment, as the income of a sole proprietorship or partnership is only taxed at the individual level rather than being subject to both corporate and individual taxes. It’s important to note that the specific tax implications of an LLC will depend on your own individual circumstances and you should definitely consult with a tax professional to figure out the best way to go about it.


After going over the benefits of having an LLC for your drop shipping business, it’s clear that you should definitely get one. You won’t have the stress of possibly getting sued going through your mind which will allow you to run your business in a manner that will maximize your profits. On top of that having an LLC will give you a professional image, making you more trust worthy which will increase your likeliness of making more sales.

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Is an LLC Necessary for Successful Dropshipping? Here’s What You Need to Know
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