How to Set Up as a Sole Trader Reseller in Australia

What Sole Trader Means

A sole trader is the simplest business structure in Australia. There's no legal separation between you and your business — you operate under your own name (or a registered business name), you're personally liable for business debts, and your business income is taxed at your individual tax rate. For the vast majority of resellers starting out, sole trader is the right structure.

The advantages are simplicity (minimal setup, minimal ongoing admin), low cost (no company registration fees), and straightforward tax treatment (everything goes on your personal tax return). The main disadvantage is unlimited personal liability, but for most resellers the risk is low.

Steps to Set Up

Here's what you need to do to set up properly as a sole trader reseller:

• Apply for an ABN: Free through abr.gov.au. Takes 10 minutes. You'll receive it immediately in most cases.
• Consider a business name: If you want to trade under a name other than your personal name, you'll need to register a business name through ASIC ($39 for one year, $92 for three years).
• Open a business bank account: Not legally required for sole traders, but highly recommended. It separates personal and business finances, making bookkeeping dramatically easier.
• Set up record keeping: Choose a system — spreadsheet, accounting software, or dedicated reseller tool — and start tracking income, expenses, and inventory from day one.
• Understand your tax obligations: Familiarise yourself with income tax, BAS lodgement (if GST registered), and PAYG instalments.

Income Tax as a Sole Trader

Your reselling income is added to any other income you earn (like employment income) and taxed at your marginal rate. This means if you have a full-time job earning $70,000 and your reselling business nets $20,000, you'll pay tax on $90,000 total income. The reselling profit is taxed at your highest marginal rate, which can be a surprise for some people.

When to Consider a Company Structure

Most resellers should start as sole traders and only consider incorporating when their profit exceeds roughly $100,000-$150,000 per year. At that level, the company tax rate (25% for base rate entities) may be lower than your personal marginal rate. But companies come with additional costs and compliance requirements (ASIC fees, separate tax returns, potential for double taxation on distributions). Discuss with an accountant before making the switch. For ABN details, see our ABN guide. For broader setup help, see our bookkeeping guide.