Etsy shop selling baked goods from home online is Illegal What?

Do you sell baked goods on Etsy or any type of food product and you do it from home and you ship it to your customers? Well, got some bad news for you, that was probably illegal. So I’m gonna go into it right now and explain why to help you cover yourself.

All right, welcome back. This is Damian from Marketing Food Online and I’m gonna tell you exactly why I say you need to be really careful if you’re selling food from home, if you’re making baked goods and selling them online through Etsy and shipping them to a customer, technically that’s illegal.

It’s actually not allowed under cottage food law and that is what you would fall under if you’re producing a food product at home. Cottage food laws do not allow nor do they permit the sale of food products being shipped out of state. Or even through the mail. So there are a lot of, and of course, I’m very familiar with Etsy, I’ve been selling on them for eight years.

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We are actually in a commercially licensed facility and when you first start out, a lot of people don’t think about it and they think well, they’re just cookies and brownies and whatever it may be. But if you’re doing it from home as kind of a side business, if somebody were to get sick, and you’re not incorporated as a business, you’re also not.

Don’t have any food business insurance, and you’re doing it from your home kitchen and shipping it to somebody, all three of those things are hugely potentially dangerous to your financial wellbeing because somebody could sue you and sue you really bad if they were to get sick. And, the fact that the state would shut you down, and potentially fine you if you were shipping products from your home via Etsy. 

Now, to understand this, Etsy itself let’s you know that you need to make sure upfront if you’re selling food products and you’re hand making food products and selling them on Etsy, they let you know that you need to make sure that you double check and that you’re follow all the guidelines.

And I see there’s a lot of sellers on Etsy who are doing this from their home and I know they’re just trying to make some extra money, but there’s potentially a huge risk factor involved with this and if you’re not careful, you could get into some serious trouble.

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Even on Ebay, there’s a lot of people on Ebay selling homemade chocolate chip cookies and brownies, selling cakes and those types of things, that too is also completely illegal. And if you’re not, again, if you’re not a commercially licensed kitchen, and you’re not insured, you’re not licensed as a business and you’re just doing this, kinda freelancing if you will, you could run into some serious trouble.

So how do you get around this and how do you not get into trouble, how do you follow the law? Well you can rent out a commercial kitchen. That’s an option. You could produce products from a commercial kitchen. You could rent a commercial space, create a kitchen for it, and then go online and make sure you’re licensed as a food business with insurance and a business license.

And then that would be the only way to really kind of, to follow the rules and the regulations in regards to shipping product outside of the state or even doing business online period. But I actually have spoken to quite a few of my friends and some other people who were wanting to do this and I told them, I said you really honestly can’t, legally.

Cottage food laws that are pretty much in every state allow you to produce a food product at home, but based on the state, they’re going to tell you what type of food products and they’re gonna tell you what type of venues, where you can actually do this from.

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And once you create a food product locally, you have to kind of sell it locally and if you’re doing it from home, you have to transact it with the customer and you have to be there in person transacting and giving it. You cannot ship a food product under the cottage food law almost every state, every state that I’ve ever heard of or looked into or researched or known of, doesn’t allow interstate sales, which would constitute you actually shipping a food product.

So you go to Etsy, you open up a shop, and they’re like hey, you should sell those cookies on there and sell ’em from home and you start doing it, you’re risking a huge financial and legal problem if you ever get caught doing that. So, and of course, this video’s not about scaring you, it’s about informing you and educating you.

So, if you’re listening to this and you happen to have a shop on Etsy, be very, very careful about what you’re doing from home. I personally am not telling you to do this at all, I would tell you to stop doing it from home, because it’s illegal. But also, it’s something that can get you into some serious trouble.

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So, I would recommend take the time to understand the cottage food laws, look into them more and sell locally and then get yourself into some commercially licensed facility. Etsy’s website, it’s not their job to actually monitor all of this, they do give you kind of a warning or an understanding before you start to sell food on there.

They tell you, in a really quick message that comes on the screen, make sure that you’re following all regulations, state, local, and such in regards to food because food is different. If you’re crocheting or you’re making necklaces, that’s totally different than baking a food product and then shipping it to somebody.

So, I was gandering, looking through, looking at Etsy, and checking out some of the food sellers on there, and I see a lot of them are taking pictures that looks like it’s really not from a commercial facility, it’s probably from home. And a lot of these people can get into some serious trouble if they’re ever caught or if someone gets sick.

I mean if someone’s hospitalized, god forbid, but if somebody gets really ill and you don’t have any type of insurance for your business that you think that you’re running, they could sue you personally and take everything you’ve got, so, be informed and be educated and understand that. I’m not gonna make this video too to much longer.

But I wanted to address it because I had some questions actually from some of my subscribers about baked goods and making stuff on Etsy and Ebay even and selling it and I wanted to let them know for sure that you can’t be doing that under the cottage food law. And they need to find some other form, some other way to produce it and ship it.

Of course you can sell, you can sell on Etsy and Ebay if you’re making a food product out of a commercial kitchen and you’re licensed as a business and you’re insured, I would highly recommend you pursue that. That’s very profitable business.

But make sure you’re doing it out of the right venue, and that’s not your home kitchen. So with that being said, I wanna wrap it up really quick, and let you guys check out the next video. And as always, I’ll see you on the next video.

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