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3 Things to Know Before You Sell Homemade Goods

By Stephanie Rabiner, Esq. | Last updated on

An increasing number of people have set up home businesses that allow them to sell homemade goods, but with sales occurring on a hyperlocal basis and over the Internet, few consider the legality of their actions.

As shown by recent stories of officials shuttering lemonade stands, there are a number of prerequisites one must meet before selling homemade goods--even if done on a small scale.

So before you go out and sell your goods, be sure to do the following:

1. Obtain a business license.

No matter what you sell, where you sell it, and what form your business takes, you almost certainly need a business license or vendor's permit to legally sell homemade goods. Contact your city or county to find out about where and how to apply.

2. Purchase liability insurance.

Whether you're selling cupcakes or candles, product liability issues may arise. Instead of opening up your personal assets to liability, purchase a policy to cover your business activities.

Note that most homeowners' policies will not cover in-home businesses.

3. Complete a health inspection.

If you are going to sell homemade food, you will need to have the state or local board of health inspect your residential or rented kitchen to ensure that you are adhering to proper sanitation procedures. You may also need to provide a standard recipe in order to comply with FDA labeling regulations.

As you can see, just because you want to sell homemade goods, it does not mean that you are exempt from traditional business regulations. So do your research and stay on the right side of the law.

If you haven't formed your business yet, you can complete business formation documents from home with simple, DIY options customized for your state.

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