Selling baits?

Just wondering here, teacher retirement is still a long way off but.....Do you have to have a special permit or license to produce and sell artificial lures? I have been dabbling in jig and fly tying and now I'm starting to fool around with plastics and was wondering if I wanted to start selling them when I retire if I needed something like that. I don't really want to go big cause it would cut into my fishing time, but maybe make a little for boat gas and such. Any info would be appreciated.

I was also wondering about bait names? Can they be copyrighted or are designs copyrighted or trademarked? I'd hate to step on anyones toes.

best thing to do is contact your state tax dept. i just went an got my wv lic. It was free for the 1st 2 yrs. And as long as you keep your sales below 4000 there free. Sole proprieter is what you want.

My understanding is that you will just offset your costs if you don't go large. I've sold a few and can see this is about where I'll fit in. It's something that occupies my busy mind and keeps my hands busy. Good luck with it all.

Trademarks can be done on the design like Blakemore has on the Roadrunners, but enforcing that is a big pain and costly. I spoke with a guy that they got after though and he use to make the old Stump Jumpers for Bass Pro and he lost everything over that. So enforcing it can be done and very effectively if they want to pursue it as he would tell you since he lost his company over that.

I do know that if or when Blakemore decides to jump on people there is a lot of them right now that are in harms way and could loose everything for selling Pony heads as they are the only one that has the right to sell them. You can buy a mold for who ever and make them for your self, but selling them is when you could have a big problem. Blakemore's Trademark spells out the design and that it is a 90 degree hook and where the eyes are placed, but I don't remember all of it. I change blades sometimes when people want a willow leaf blade, but if I use blades other than Blakemore's imprinted Roadrunner blades and I ho put a stick on the package that states their Trademark number and that this falls under that trademark.

I have some pony heads I bought before I know the deal on them and they became for my use only and I finally got the real Roadrunners to tie and sell with Blakemore's blessing, but that took about 2 years, LOL!

However if you are not going big then I would suspect it wouldn't be worth it to you, but that would be something you would have to check and decide on. I can't see how anyone going small could afford to not just get the trademark or patent, but to enforce it is a lot so selling small amounts couldn't pay for that and still put gas in your boat.

Now as far as just the name, maybe so on a copyright, but I don't really know what kind of cost are involved, but it would be something to check with an attorney about and also ask them how much it would cost to enforce it because that is where the tires hit the road so to speak.

Skip

Let Me give You the straight the Gov. draws a thin line between hobbie and Business ? who know's where it is as a Manufacture and retailer I know if You sell a Fair amount? a 10% excise tax has to be collected and paid on a form 720 quaterly no if or ans here Any and All types of artifical baits from fly's to plastic's I keep a list on My desk when searching new or designing new products this even includes plastic skirts AKA sili legs they can by them selves attract fish? don't end up like many and not do this pay up front it's alot cheaper.

Thanks to Flat Im legal I would of never known about the excise tax tell he told me about it awhile back and also you will need a state Id # for sales tax (if your state has one) And just make sure to keep very accurate records it will help your tax guy out.

JJ

Thanks guys, it sounds like it could be a big headache. Thanks for all of the info.

Well. Get a Million dollar insurance policy about $500 a year. Covers products and workplace. Then Incorporate so the person or company can only sue your company and not you. 720 form from the IRS. Free. 10% tax at the price you sell. On the 720 form if you make one fishing lure or anything along that line no matter what your sales are you have to pay 10%. State tax no. and tax info for you state. Should be free. Go to U.S. trademark and patent and do a search for names for products you wish to name. You can learn alot from reading their info. Lots of learning to do. Ha.

P.S. Forgot if you sell in Ca. must be labeled with the lead warning unless 100% leadfree.

TT

mepperson,
Be very careful as to what designs you sell. Patent infringement can be quite costly. They can sue you for 3 times the amount they have made off of them from the time they started making the products. Plus attorney fees, and fees can go into the millions. The company really might not want to mess with you but the law says they have to enforce the patent or it could nullified. These guys are telling you straight, listen to them.
To get any price breaks on hooks, 50,000 will start to get a very small break, but you really need to start at 100k for them to really work with you.
Plastics: you can do it by the 5 gallon amount but your not going to make that much off of them by the time you add all your overhead into it. So now you are talking by the drum and the pvc companies want you buying 3 drums at a time.

Okay, you guys have just about scared me to death on trying to sell baits, but just in case I wanted to search patents to see if there is one what do I do? Do bait makers have to identify a patent if they have one on a bait?

I have a friend in Alabama who was pouring plastic bass baits. He got legal and all of that. He sold to small fishing shops for years. He finally got a contract with a big box store and thought he would make some money. End result was after 3 years he gave it up and stopped selling all together. Payments were slow coming and the big store would have oodles of returns just before they paid him. He lost over $120 kk in 2 years.

I started doing this as a hobby and thats all i wanted it to be but thanks to uncle sam it is becoming work lol but i like tying and I like seeing people catch fish off jigs i make so I follow the rules and make the best of it. will I get rich HELL NO but thats not why I do it so if you think you wanna try making a living at this just remember it wont be fun no more if you do.

JJ

If you want to make a few bucks try selling on ebay. Lot's of competition there,but you can make a few bucks if you put out a good product. I've been selling jigs on ebay for over 5 years and in that time the jig listings have gone from about 400 to around 2200-2500. I think there are several cc members that sell on ebay.

just fly under the radar, keep it small,and don't get crazy. there looking for the big boys

Yes, if they have a patient, they do have to display the numbers with the product. Or have a pat pending if one has been filed. Also, the patent & trademark web page is not always up to date.

mepperson,
I think my brain is going to mush from all the snow or just sitting on it too much this winter. Let me make my last statement more clear. The law states: If you properly mark the product patented with the numbers you can receive damages from the date you began marking the product. Wether they see your notice or not.
If you make or sell your products but don't mark them with your patent number, or mark them patented without the numbers, you can recover damages only from the date you notified the infringer of infrigement or from the date you file suit, whichever comes earlier. Hope this makes the mud a little clearer.

Keep it small and low key and you will be fine. Be sure you have your local tax license. If you have a website you may want to pay for your own dot com domain name. It eliminates a lot of pop up ads on your site.

Now when you have a booming business like Skip and some of the other tiers on this site and sell wholesale or sell to Cabelas or Bass Pro Shops etc, then I would advise you to seek legal counsel for licenses and taxes.

Most tiers, like me, tie for fun or for personal use. The few they sell usually goes to purchase more materials so you really can't say you are "In the business."

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Originally Posted by shipahoy41

Keep it small and low key and you will be fine. Be sure you have your local tax license. If you have a website you may want to pay for your own dot com domain name. It eliminates a lot of pop up ads on your site.

Now when you have a booming business like Skip and some of the other tiers on this site and sell wholesale or sell to Cabelas or Bass Pro Shops etc, then I would advise you to seek legal counsel for licenses and taxes.

Most tiers, like me, tie for fun or for personal use. The few they sell usually goes to purchase more materials so you really can't say you are "In the business."

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I'm not so sure about that ship. when I called the IRS to see if there was a limit on when it stops being a hobby and starts becoming a business they told me if I sold 1 jig I had to claim the income and charge the %10 excise tax.

so with that said I would suggest that if you have a site and sell on it you might wanna do it right or take the chance and possibly get fined out the butt. Me I wont take that chance.

oh 1 more thing if you have a state tax id # and charge the sales tax and claim all that its even easier for the feds to track your sales so i would for sure get a EIN# from the IRS Then

JJ

I can see that this stuff can get pretty complicated. Thanks for all of the input guys.

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Originally Posted by mepperson

I can see that this stuff can get pretty complicated. Thanks for all of the input guys.

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I'm not trying to talk anyone out of selling because it is alot of fun. I just dont want to see any of my fellow tiers that I think are some alright guys get burned. I'm just letting you know what was told to me by other sellers and my accountant and it may seem like a big pain but it really aint takes like 15 minutes to get a state tax id number and apply for a EIN# after that just keep good records of your sales and cost.

Its part of the hobby that sucks but i figure its worth it.

JJ

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Originally Posted by Jiggin_Joe

I'm not trying to talk anyone out of selling because it is alot of fun. I just dont want to see any of my fellow tiers that I think are some alright guys get burned. I'm just letting you know what was told to me by other sellers and my accountant and it may seem like a big pain but it really aint takes like 15 minutes to get a state tax id number and apply for a EIN# after that just keep good records of your sales and cost.

Its part of the hobby that sucks but i figure its worth it.

JJ

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Thanks Joe, I'm not talked out of it, just commenting on all of the posts. There's a lot more to it than I thought. I'm still gonna make baits because I enjoy it, but I like fishing a lot more. It sounds like it will be a lot of work trying to more than the hobby thing.

Quote:

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Originally Posted by Jiggin_Joe

I'm not so sure about that ship. when I called the IRS to see if there was a limit on when it stops being a hobby and starts becoming a business they told me if I sold 1 jig I had to claim the income and charge the %10 excise tax.

so with that said I would suggest that if you have a site and sell on it you might wanna do it right or take the chance and possibly get fined out the butt. Me I wont take that chance.

oh 1 more thing if you have a state tax id # and charge the sales tax and claim all that its even easier for the feds to track your sales so i would for sure get a EIN# from the IRS Then

JJ

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I paid the 10% taxes etc. Last year on Dec.31st I quit selling and just tie for a few friends. My site is now into teaching people how to fish.

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Originally Posted by shipahoy41

I paid the 10% taxes etc. Last year on Dec.31st I quit selling and just tie for a few friends. My site is now into teaching people how to fish.

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Cool, I need some lessons!

I'd like to pose the following questions to CDC's commercial tyers for input if you Fellows have the time.

1. Do companies like Wapsi or Danville pay the 10% federal excise tax (FET) on their finished materials (e.g. thread, chenille, flashabou) sold at retail?
2. Does holding a federal (or state) tax number allow you to purchase tools and materials at wholesale prices?
3. Do wholesale tool and material prices exclude the FET?
4. What do you do in the case where a manufacturer of material has paid the 10% FET and you use their material to complete your finished product in terms of FET payment?
5. Does the FET go toward Sport Fish Restoration projects? Are these the Dingell-Johnson/Wallop-Breaux monies?

Just curious. Thank you.

well pup im new to this but when you purchase from suppliers they do add the FET to the items that require it and you dont have to pay them the excise tax as long as they have the proper forms showing you charge the tax when you resell those items. Now I have been paying them the excise tax because i have'nt yet figured out what forms i need to send my suppliers to get me exempt from having to pay it so if someone knows the process please let us know.

JJ

I do believe it is a 637. You will have to meet with a IRS agent to obtain this form. You can get a break on excise tax from companies that offer it. Wholesalers and Manufacturers that is. You actually hide the 10% in your sale price to distributors, retail stores or end users (fishermen). Hiding the tax is stupid but if you get a 720 you will see alot of hid taxes on products. If you sold $550.00 this quarter you pay $55.00 to IRS. It is due per quarter. It has a grace period of one month. So the last quarter of 2009 is Oct. Nov. Dec. and forms and payment are due by Jan. 31 2010.


Pup

1. I would think 100%. Yes
2. Yes and no Depends on what they want. Min. orders and all tax papers/numbers.
3. Depends on tool.
4. Get 637. You still have to pay 10% at your selling price. No ifs or butts about that one.
5. Not sure about breakdown of monies but all monies go to land/water management.

TT

Thank you for the information Jiggin_Joe and Timmy Tom.

Interesting stuff. :cool:

so what ever you make put it in an account and keep it there till tax time. keep all reciepts... let the accountant take care of it....thats how i do it

You have to file a 637 under a defined activity they will set up a appointment and come to Your place of business! and preform a audit on Your books and inventory! it took Me 4 hours and they can come back at any time with a 2 hour notice. Thats all!

I'll pay the %10 still lol

JJ