Do You Have to Have Rights to Sell a Product?
In a free market, buyers and sellers are allowed to come together to perform transactions with minimal government interference. However, this doesn't mean that all selling and buying is free from regulation. In many cases, sellers need special rights and proof of these rights in order to offer merchandise or services for sale to the general public.
Other People Are Reading
-
Businesses Licenses
-
Individual states may require businesses to apply for business licenses before they have the right to sell products within the state's borders. State retail licenses are generally inexpensive but ensure that all sellers are registered with the state for tax purposes. Some states, such as South Carolina, offer different types of retail licenses, including temporary, permanent and transient licenses. Some sellers, such as homeowners who host infrequent garage sales, do not need business retail licenses to sell merchandise.
Product Licensing
-
A product license allows you to sell a product that another business or individual developed or manufactures. By licensing existing products, you can avoid copyright infringement lawsuits when you sell another business' patented products or copyrighted intellectual property. Licensing fees vary based on the value of the products you want to sell and the terms of your agreement, which may restrict the region in which you can legally sell the product.
-
Distributor Agreements
-
Distributor agreements are similar to product licenses but apply specifically to one business distributing another business' products for sale. Distributor agreements, also known as distribution agreements, include legal requirements governing profit sharing, sale methods and competition. For example, a retailer that enters into a distribution agreement with a computer manufacturer may need to agree not to sell certain competing computer models. The same retailer may also agree to adhere to pricing guidelines within a limited range to keep prices consistent from one region and seller to another.
Special Cases
-
In certain special cases, a business needs additional rights from a government agency to sell regulated products. This is the case with products such as firearms, which only dealers registered with the Federal Bureau of Alcohol, Tobacco, Firearms and Explosives can legally offer for sale to the public. Controlled substances, including prescription drugs, as well as fireworks, lottery tickets and alcohol all require sellers to file for licenses before receiving the right to sell and profit from these products.
-
