Starting a high-ticket drop shipping business can be a lucrative and rewarding venture, but it's important to make sure you have all the necessary legal and financial elements in place to ensure your business runs smoothly. In this post, we'll cover the essential elements you need to start your high-ticket drop shipping business.
Get an LLC
First and foremost, you'll need to establish your business as a legal entity. Forming a Limited Liability Company (LLC) is a popular choice for high-ticket drop shipping businesses, as it provides personal liability protection and pass-through taxation benefits. You can form an LLC by filing the appropriate paperwork with your state's Secretary of State office and paying the associated fees. I used and recommend INCFile to form my LLC.
Get an EIN number
Once you've established your LLC, you'll need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is a unique nine-digit number that's used to identify your business for tax purposes. You'll need an EIN to open a business bank account and to file your taxes.
Get a registered agent address
As an LLC, you'll need to have a registered agent address. This is a physical address where legal notices and other important documents can be sent to your business. You can either use your own physical address or hire a registered agent service to handle this for you. If you sign up with INCFile, they include this service along with the option for a virtual mailbox service.
Get a virtual mailbox service
A virtual mailbox service is a must-have for high-ticket drop shipping businesses. It provides you with a physical mailing address where you can receive mail and packages, even if you don't have a physical office. You can also use the virtual mailbox service to scan and forward your mail to you electronically, making it easy to manage your mail from anywhere. I use and recommend Traveling Mailbox.
Get a business checking account
To manage your business finances effectively, you'll need a dedicated business checking account. This will help you keep your personal and business finances separate, making it easier to track your income and expenses for tax purposes. You can set up a business checking account with a bank or credit union. Here is a list of the best business checking accounts for high-ticket dropshipping.
Get a business credit card
A business credit card can be a valuable tool for managing your cash flow and building your business credit. Look for a credit card that offers rewards or cash back for your business expenses, and make sure to use it only for business-related purchases. Here is a list of the best credit cards for high-ticket dropshipping.
Get a sellers permit
If you plan on selling physical products, you'll need to obtain a seller's permit from your state's taxing authority. This will allow you to collect sales tax on your sales and remit it to the appropriate taxing authority.
Get a business phone number
A business phone number can help you establish a professional image and provide your customers with a way to contact you. You can use a virtual phone service to set up a business phone number that's separate from your personal number. I use and recommend Grasshopper.
Hire a bookkeeper or accountant
As your business grows, it's important to have a professional bookkeeper or accountant to help you manage your finances. They can help you with tasks like managing your cash flow, creating financial reports, and preparing your taxes. You can hire a bookkeeper or accountant on a part-time or full-time basis, depending on your needs and budget. I use and recommend Bench.
Starting a high-ticket drop shipping business requires careful planning and attention to detail. By following these essential steps, you can establish your business as a legal entity, manage your finances effectively, and set yourself up for success in the world of e-commerce.
Sign up for my free High-Ticket Drop Shipping for beginners course to learn more about high-ticket drop shipping.