LLC Vs S Corp for eCommerce business?

Video Transcript

Hey everyone, Anton here from Today I wanted to answer a quick question that just came in from Mike. The question is:

I plan to devote myself to being successful and eventually operating multiple stores (he says he is being confident not cocky – I like that) and he asked if I could talk about incorporation.

He wants to know if he should incorporate a single holding company that all his stores will be under. He wants to know if I recommend an LLC and basically, the process of getting this all set up legally as an official LLC or business entity.

I’d recommend doing what I started with; just because, I did it and it worked for me. I am a big fan of launching businesses fast without getting yourself wrapped up in the details. If you are just getting started out I would recommend starting as a sole proprietor.

All that means is that you are doing business as an individual and you are doing business under your own name. Of course, you have your website, which is not named after you, but you don’t have any type of legal entity – that’s what I recommend.

After that, once you are getting sales and once you are profitable: go pay or pay an accountant a few hundred bucks to set up an S corporation for you.

I personally recommend S Corporations over LLCs. I am not an accountant; I am not an expert but the reason I recommend an S Corp is because that is what I run my businesses through.

It is definitely beneficial when it comes to different tax legalities and how you can pay yourself as an employee and as a business. It is different than an LLC. Of course, do your research, do your due diligence but I do recommend an S Corp because that’s what I use in my businesses.

As far as creating one that all your business run through or creating multiple – I recommend creating one. Let’s say you are in eCommerce, which is what Mike is doing, create one entity and all your businesses can go through that. If you want to eventually expand out into other industries and other markets doing things like importing, then I would recommend starting a new entity for that.

For all your drop shipping stores, I would recommend keeping them under one business entity that is an S Corp.

Any other questions, please just contact me at [email protected] or go visit our website at We have over 20 hours of video content in our member’s area. We have a forum with over 3000 members so it’s very active over there if you want more information on eCommerce, specifically on drop shipping. I’ll see you on Thanks.

Anton Kraly

Anton is a the Founder & CEO of Drop Ship Lifestyle - an online coaching program for eCommerce entrepreneurs. He began selling online in 2007 and has built and sold multiple seven-figure businesses while leveraging the power of drop shipping.