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It conjures up images of ragged vagabonds pulling carts full of knick-knacks, but what is a peddler? Simply put, a peddler (or pedlar for our British readers) is a traveling vendor who sells goods from door to door or street to street, not limited to single place or property. You’ve probably seen them at parades hawking their wares, outside stadiums before a big game, or in touristy areas with heavy public traffic like Times Square and the Las Vegas Strip.
It’s a low-cost, portable way to start a business, but just like any other business, you’ll need licenses and permits. In this case, you’ll need a pedlars license/peddlers permit (or transient merchant license as it’s sometimes called) to legally operate.
The content of this blog post will not only answer the question “what is a pedlars license?” it will explain how to obtain a peddler’s license as well.
What is a Peddler’s License?
In most states, a peddlers license is the exact same thing as a business license. The main difference is that a business license is issued to home, online, or brick and mortar companies, while a peddlers license is issued for businesses that go door to door, sell on the streets, or generally are a business that does not have a permanent site.
How Much is a Peddler’s License?
The fee varies from state to state, but generally, a peddlers license runs less than $100. In some states, a number of other factors are considered to determine the fee. For an example of factors affecting fees for a peddlers, Florida generally bases their fee on the industry, geographic service and a few other factors.
Keep in mind that just like a business license, the fees for a peddlers license are annual and subject to change.
How Do I apply for a Peddler’s License?
A lot of cities allow you to apply and/or print their online application, but most require you to apply in person. So, before you do anything else, contact your city licensing department to find out what your city requires.
Once you’ve determined how you’re going to apply, the next step before going forward with the application is to contact the city licensing office to see if a bond is required. Some states require a small bond for yourself and anyone you may have working for you.
If your state requires a bond, you can apply in person at a bonding company for a $5,000 surety bond (this is the minimum amount). To avoid having to go in person check and see if you can apply through the bonding company’s website.
Some states require a surety bond because they protect the obligee against losses resulting from the principal’s failure to meet the obligation.
It’s basically a promise by a surety or guarantor to pay one party a certain amount if a second party fails to meet some obligation, like fulfilling the terms of a contract.
Once you’ve secured your surety bond, the next step is getting your license and compiling a number of important personal documents. It’s always smart to contact your city licensing office to see what your specific city requires, but general guidelines require:
- Copy of criminal record
- Proof of bond
- Proof of Identification
Depending on your state, you may also be required to wear a special peddler’s identification card. This is a quick and easy way for you to prove to the authorities that you’re legally allowed to peddle your merchandise. Failure to prove the legitimacy of your peddling business can result in fines and your peddler’s license being revoked.
If your state requires this form of identification, take two ID-sized photos with you to the licensing office. Anyone who works with you will also need to have this ID card. There is a small ID fee.
Please note that if you plan on selling food, there are additional licenses and requirements as well as a number of food service and health code practices you must abide by.
Form an LLC or Corporation
Every business, no matter how small, should form an LLC. Matter of fact, it’s the most important thing you could ever do for your business. Why? Because forming an entity grants you:
- Personal asset protection
- Additional credibility and name protection
- Tax flexibility
- Perpetual existence
Related Article: LLC vs Inc — Which is best for your business?
Who Should Start a Peddling Business?
Peddling isn’t for everyone. There are some limitations, the biggest being never having a fixed location for your business. This means you’ll always need to search for new areas to operate. But this could also work in your favor, allowing you to center in on high traffic areas on a whim and take advantage of special events and holidays.
For this reason, peddling is great for entrepreneurs who only sell one or two items (i.e., flowers, art, food, handmade crafts, toys, etc.). It’s an inexpensive way to launch your business, with very little overhead and upkeep costs.
So, if you like being on the move and going where the action is, starting a peddling business and obtaining a peddlers license is the right move.
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Incorporating is the most powerful thing you can do to legitimize your business. And at IncAuthority.com, our setup LLC services are 100% free. Always. So, don’t wait. Form your free LLC today and enjoy the protection due to you and your business under the law.