What's the difference between AliExpressLocal Direct and Marketplace?

Under Direct, AliExpress helps with marketing, merchandising and pricing at no extra cost and handles customer service and after-sales disputes. Marketplace is self-serve: you set prices, run marketing and control MAP. Both come with a three-month free trial, and trade press reports you can switch between them.

What commission does AliExpress charge U.S. local sellers after the free trial?

AliExpress has published only the three-month free trial and, at the 2024 launch, 0% commission and $0 onboarding during an introductory period. Post-trial commissions, any monthly fee and payout timing aren't public, so get them confirmed in writing before signing and keep the agreement.

Can a foreign-owned U.S. LLC join AliExpressLocal?

A U.S.-registered company can apply as a U.S. business. An LLC owned by one foreign person is a disregarded entity, so under the W-9 instructions the owner gives a W-8, and the LLC files pro forma 1120 + 5472 every year, with each missed form starting at $25,000. An LLC electing corporate treatment on Form 8832, or a C corporation, gives a W-9 under its own EIN.

Will an AliExpressLocal seller receive Form 1099-K?

U.S. sellers paid more than $20,000 in more than 200 transactions in a year should receive a 1099-K from the platform or its payment processor; which AliExpress entity issues it is per the back end. It shows gross amounts and should be reconciled to settlement reports, and income below the threshold is still taxable.

AliExpressLocal U.S. Sellers: Direct vs Marketplace and Taxes

AliExpressLocal is AliExpress's seller program for U.S.-based businesses. The Direct model launched on October 30, 2024 (then called AliExpressDirect), and the self-serve Marketplace model was added on March 17, 2025. Both come with a three-month free trial, 1:1 onboarding and launch assistance; post-trial fees are not published. Under AliExpress's membership agreement, U.S. sellers contract with AliExpress International (United States) Corporation. Before you onboard, choose your entity and align your EIN and W-9. Before the trial ends, get the fee rate, payout timing and who issues your Form 1099-K confirmed, ideally in writing.

Who the program is for

AliExpress's October 30, 2024 press release invited "local, U.S.-based businesses" to open shops, the first time AliExpress recruited U.S. merchants, with 0% commission and $0 onboarding costs during an introductory period. Its March 17, 2025 release renamed the program AliExpressLocal and split it into Direct and Marketplace. AliExpress says U.S. merchant participation rose 358% from the end of Q4 2024 to the end of Q1 2025 (a company figure).

The release describes onboarding as registering an account, completing authentication, setting up payment processing and listing products. AliExpress hasn't published a complete U.S. document list; third-party guides mention the company name, registration number, tax ID, incorporation date and address, representative details and a bank account. The working rule is simple: the platform registration name, EIN, address, bank account holder and W-9 name should all match. If you've lost your EIN confirmation letter (CP 575), call the IRS business line for a 147C letter; if your address changed, file Form 8822-B first.

How Direct and Marketplace differ

Direct is the hands-on model: AliExpress helps with marketing and merchandising at no additional cost, provides price management tools and handles customer support, including after-sales disputes. It suits U.S. merchants without a dedicated e-commerce team who want to test the channel.

Marketplace is self-serve: you decide pricing, marketing and merchandising, see sales and traffic data, send personalized post-purchase emails and keep full control of the minimum advertised price (MAP). It suits brands already running Amazon, Walmart or their own store that care about price consistency.

Trade press reports that sellers can switch between the two at any point. From November 2025, AliExpress added a labeling service for U.S. sellers (buy labels in the portal, compare rates and track parcels, optional photo proof of delivery, and return labels) and integrations with Linnworks, StoreAutomator, Quipt and other software.

The tax-relevant difference is pricing and promotions. Under Direct, AliExpress takes part in pricing and promotions, so settlement reports may show list price, discounts, platform subsidies and commissions as separate lines. A discount you fund reduces revenue; a subsidy the platform funds may be an amount the platform pays you. Book them separately from the agreement and settlement reports so the 1099-K reconciles.

What to ask before the free trial ends

The three-month free trial is stated in AliExpress's press release, but the post-trial commission rate, any monthly or annual fee, payout timing, who pays return shipping and how deductions work are not in public sources. Ask your onboarding contact to confirm each in writing before you sign, and keep a copy of the agreement.

Also ask who issues the 1099-K. Under federal rules, a platform or its payment processor issues Form 1099-K to U.S. sellers paid more than $20,000 in more than 200 transactions in a year. Which AliExpress entity issues yours is per the back end and the form you receive; note the payer's name and EIN in your books to make reconciliation easier.

Which entity to use

U.S. residents starting out. Citizens, green card holders and resident aliens often start with a single-member LLC, which reports on Schedule C like a sole proprietorship. Net profit bears self-employment tax (15.3% in total, computed on 92.35% of net profit, with the Social Security portion capped at the wage base) plus income tax at individual rates, and with no employer withholding you generally pay quarterly estimated tax. As profits grow, an S corporation election can help: you pay yourself a reasonable salary and the remaining profit avoids self-employment tax, at the cost of payroll filings and Form 1120-S.

U.S. companies owned by foreign persons. A U.S.-registered company owned by foreign persons can also apply as a U.S. business. An LLC owned by one foreign person that hasn't elected corporate treatment is a disregarded entity; under the W-9 instructions the owner gives a W-8, not a W-9 under the LLC's EIN, and the LLC files pro forma 1120 + 5472 every year, with each missed form starting at $25,000. Many owners elect corporate treatment on Form 8832 or form a C corporation, which files Form 1120 at 21% and gives a W-9 under its own EIN. After a change in classification, you generally can't change again for 60 months.

The cost of a wrong W-9. The W-9 name and TIN must match IRS records exactly; if they don't, the platform must withhold 24% from payouts as backup withholding.

Sales tax and state taxes

Under state marketplace facilitator laws, the platform generally collects and remits sales tax on platform orders, and AliExpress charges sales tax at checkout on U.S. orders. Sales on your own site, wholesale or in person are yours to assess, and some inventory states require the seller to register anyway. Wherever your inventory sits, you may also face state income or franchise tax, such as California's $800 minimum franchise tax or Texas franchise tax, whose no-tax-due threshold for 2026 and 2027 reports is $2,650,000 (an information report is still due below it).

An example

Example (hypothetical numbers, to show the method): Li, a green card holder, sells auto parts through a single-member LLC on AliExpressLocal Direct. In the first year after the trial, his 1099-K shows $64,000. Refunds are $3,000, commissions and platform deductions $5,000, and promotional discounts he funded $2,000 (included in the 1099-K gross and deducted in settlement). Product cost is $28,000, shipping and labels $9,000, packaging and software $2,000.

Schedule C net profit = $64,000 − $3,000 − $5,000 − $2,000 − $28,000 − $9,000 − $2,000 = $15,000. Self-employment tax is about $15,000 × 92.35% × 15.3% ≈ $2,119, plus income tax at his individual rates, with half of the self-employment tax deductible in computing income tax. Treating a platform subsidy as his own discount, or missing his discounts entirely, would leave the 1099-K and the return out of step.

AliExpressLocal for U.S. Sellers: Direct or Marketplace, What to Ask Before the Free Trial Ends, and How to Set Up Your Entity and Taxes

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