Business Formation
Do you need to register a company to sell on Amazon FBA?
No. You can start as a sole trader with just a business name and a Professional seller account, at no setup cost, and most beginners do exactly this. Once profit becomes significant, often cited as somewhere above roughly £50k a year, incorporating as a limited company tends to become financially worthwhile through more favourable tax treatment and limited liability protection, where the company rather than you personally carries legal and financial responsibility. If you're planning to scale seriously or sell higher-risk products, incorporating earlier is often sensible even below that threshold.
What documents do you need to set up a limited company?
Companies House needs each director's full name, date of birth, and residential address, a unique company name ending in "Ltd" or "Limited," a UK registered office address (your home address is fine and commonly used), at least one director aged 16 or over, and Articles of Association, for which the standard template suits most small sellers. An annual confirmation statement is also required, filed with a small fee. Formation agencies can handle the paperwork for a modest fee if you'd rather not deal with Companies House directly.
Can you use your home address as your registered office?
Yes, it's legal and common practice for small UK sellers, though it does become part of the public record on Companies House. If privacy matters to you, virtual office address services exist for a modest annual fee and provide an alternative mailing address for official correspondence.
What are a company director's core responsibilities?
Directors are legally required to act in the company's interests, keep proper financial records, file tax returns (including a Corporation Tax return every year, even with no profit), and avoid conflicts of interest. Breaching these duties can create personal liability, and repeated breaches can lead to disqualification from running a UK company. For most Amazon sellers this boils down to keeping good records, filing on time, being straightforward with HMRC, and making sure products are safe and compliant, an accountant is often hired specifically to manage this administrative load.
Insurance
Do Amazon sellers need insurance?
Product liability insurance isn't a legal requirement to sell on Amazon, but it's strongly advisable and increasingly expected. Amazon can restrict or suspend an account over an injury claim if no insurance is in place, and many suppliers and brands won't work with sellers who can't show proof of cover. Without insurance, a successful injury claim comes out of your own pocket; with it, legal defence and compensation up to your policy limit are covered. Given the relatively modest annual cost against the scale of potential liability, most sellers treat it as standard business overhead rather than optional extra.
What is Policy Bee?
Policy Bee is a UK insurance broker that specialises in product liability cover for online and Amazon sellers specifically, rather than being a generic business insurer. Quotes are typically available online within minutes based on product category, annual sales, and desired coverage limit, with policies commonly covering £1–10 million in liability and certificates of insurance issued promptly enough to hand to Amazon or a supplier on request. It's one of several brokers worth getting a quote from if you're shopping for FBA-specific liability cover.
What does product liability insurance actually cover?
It covers compensation if a customer is injured by a defective or unsafe product (medical costs, lost earnings, and so on), legal defence costs, and investigation or recall expenses arising from a genuine product safety issue. It won't cover intentional misconduct, regulatory fines, or knowingly selling a product you already understood to be dangerous. Coverage limits are typically chosen in the range of £1–10 million depending on product risk and sales volume, higher-risk categories like electronics, consumables, or children's products generally warrant higher limits.
How much does Amazon seller insurance typically cost?
Cost scales mainly with annual sales volume and product risk category, low-risk items like books sit at the cheaper end, higher-risk categories like electronics or children's products cost more, and coverage limit and claims history also factor in. As a rough starting point, budgeting a few hundred pounds a year for basic cover is reasonable for a smaller seller, but get an actual quote rather than relying on a fixed figure, since rates vary by insurer and change over time. It's also generally tax-deductible as a business expense.
When does Amazon effectively require insurance?
Amazon doesn't mandate it outright, but it becomes practically necessary in high-risk categories under increased scrutiny, and can be requested as a condition of reinstating a suspended account following a safety complaint. Many wholesale suppliers and brand owners also require proof of cover before they'll deal with you. Getting insured within your first few months of selling, rather than waiting for a problem to force the issue, is generally the sensible approach.
Legal Essentials
What is product compliance and why does it matter?
Products sold on Amazon must meet applicable UK and EU safety standards, covering areas like CE marking for electronics, toy safety testing, cosmetic ingredient labelling, and flammability standards for clothing. Selling non-compliant products risks listing removal, a Trading Standards recall notice, fines, and potential customer injury claims your insurance may not cover if the breach was knowing. Before launching any new product, checking the applicable standard and requesting compliance documentation from your supplier is worth the time it takes.
What are your obligations under UK consumer rights law?
Under the Consumer Rights Act and Distance Selling Regulations, products must match their description, be of satisfactory quality, be fit for purpose, and be safe, and customers get a 14-day cooling-off period to return an online purchase without giving a reason. Faulty products must be repaired, replaced, or refunded at the customer's choice. Accurate listings, honest photography, and generous, prompt returns handling aren't just good practice, they're what keeps you on the right side of these obligations and out of A-to-Z disputes.
What are your GDPR obligations as an Amazon seller?
Customer data Amazon shares with you (names, addresses) may only be used to fulfil that specific order, not for marketing or added to a mailing list without explicit opt-in consent. Data should be kept secure, used only for its intended purpose, and not shared with unauthorised third parties. If you run your own mailing list separately, only email people who've genuinely opted in, always include an unsubscribe option, and maintain a clear privacy policy. Serious breaches carry substantial regulatory penalties, so treating customer data carefully from day one is worth the small discipline it requires.
Should you register a trade mark?
Registering protects your brand name or logo legally and unlocks Amazon's Brand Registry, which gives real enforcement power against counterfeiters and copycat listings. In the UK this goes through the Intellectual Property Office, involves a search to confirm the name is free, an application (single-class registration currently costs around £200, though check the IPO's current fee), and roughly four to six months for examination. If you're reselling existing branded products, registration isn't urgent; if you're building your own private-label brand and plan to scale, registering within your first year is generally worthwhile.
What should you do if you receive a legal complaint?
Don't ignore it, acknowledge receipt and get advice even if you can't respond substantively straight away. Read it carefully to understand exactly what's being claimed and the response deadline, gather every relevant document (photos, supplier confirmations, communications) without deleting anything, and if it's a product liability matter, contact your insurer immediately, that's precisely what the policy is for. Never admit fault in writing before taking advice, and for anything complex or high-value, a solicitor consultation is worth the modest upfront cost to protect your position properly.