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Advantages of Structuring Your Online Business as an LLC and What is Drop shipping

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shanti1 Offline referral

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A limited liability corporation (LLC) is so named because its owners are not personally responsible for the business’s debts.

This structure differs from a general partnership or a sole proprietorship, in which the business and its owners are legally one and the same. Under the laws for those business structures, any assets owned personally can be used to pay debts incurred by the business.
This structure protects the owner’s assets, such as a house, car, artwork, or other valuables.

LLC owners pay taxes at the personal rate, rather than the business rate; this is referred to as a “pass-through.”
An LLC, as opposed to a full-fledged corporation, is subject to fewer governmental regulations and annual reporting requirements.

The owners of an LLC can set up their business using any structure they like. Owners can manage an LLC, or appoint a manager. An LLC, unlike a corporation, does not have a board of directors which must approve corporate decisions nor does an LLC have officers to handle everyday business.

The government imposes fewer restrictions on an LLC regarding who can own one, or how many owners are allowable; this is a marked difference from an S corporation.

An LLC can claim an income-tax deduction for many more items than a corporation, such as pensions, medical expenses, business entertainment, and trips. Because you can be both an owner and an employee of your own LLC, you do not have to file an IRS Schedule C

In addition, even if you are the only member of your LLC, you can deduct expenses for health insurance, travel, transportation, and entertainment. You can also structure your pension plan so that the money you save for retirement is tax-deductible.

This might be the best reason for choosing to start your online business as an LLC.
LLC owners have more funding sources than sole proprietorship or general partnerships. Investors are more willing to put their money into LLCs because the owners are not personally responsible for the companies. Investors don’t risk losing their own personal assets, as they would by investing in companies structured in other ways.
An LLC can survive its owners.
An LLC can make promissory notes, issue its own bonds, and take out secured or unsecured loans, for any legal reason.
An LLC can issue shares.
An LLC can make donations to charities.

What is Drop shipping

As you can see, there are many advantages to structuring your online business as an LLC. My advice to you is to consult an experienced attorney in your state for the best information about the privileges and obligations involved in this business structure

When you use drop shipping, a customer places an order for a product on your website, and the manufacturer or the distributor ships it. When you’re starting an online business, you might choose to have your products drop shipped because it lowers your costs and eliminates shipping from your end.

For a new online business, the biggest benefit of drop shipping might be that you don’t have to buy inventory. If your business doesn’t do well, and you decide to discontinue it, you won’t lose money on unsold products. The same goes for products that stop selling because they were trendy, and the trend has passed.

You can also offer less-popular products to smaller markets, in addition to bestsellers that you sell in larger numbers.
When you chose drop shipping, you can offer your customers the latest products. You won’t have to invest in manufacturing or take a chance on buying something that might not sell.
Your customers’ shipping costs may also be lower with a drop shipping arrangement than if you shipped them yourself. As a small business owner, you won’t have access to big discounts for quantity shipping.

Because you eliminate the middleman, fewer people handle your products. This decreases the incidence of damaged goods. Depending on the arrangement your online business has with the distributor or the manufacturer, you might be required to pay shipping on returned goods.
The fewer damaged products, the fewer shipping expenses you’ll incur.
If your online business is a one-person operation, you’ll appreciate the fact that you don’t have to pack and ship your products yourself. If your business grows, you won’t have to hire people to do those tasks.

A real plus to using a drop shipper is that you don’t have to store any inventory. If you don’t own a warehouse, or even a garage that’s large enough for your needs, you’ll have to rent a storage facility. Your inventory, and the number of different products you can offer, will be limited by the amount of space you can afford to rent.

You might have to forego selling large products because they just take up too much room. You might also decide against selling anything fragile or perishable, because you just can’t store it properly.

When you’re starting an online business, drop shipping might be the best option for you. Because manufacturers or distributors will put your business’s label on the products you sell, you’ll present a professional image to your customers, and give the impression that you have a large inventory at your fingertips.





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