Selling to Wayfair as a supplier: requirements, AllModern and the other brands, CastleGate, platform comparison, tax and entity planning (2026)

Wayfair is a retailer, and suppliers sell to it. In Partner Home you set each product's base cost, which is your price to Wayfair; Wayfair sets the retail price, takes the customer's payment, collects sales tax and handles customer service. Third-party sellers on Amazon, Walmart and TikTok Shop sell to the customer themselves and the platform takes a commission. That difference drives the sales tax, 1099 and profit math in the rest of this guide.

• Purchase-order model: a customer orders on Wayfair, Wayfair sends you a purchase order, you ship and invoice, and Wayfair pays under the agreement. Wayfair's 2025 annual report describes over 40 million products from about 20,000 suppliers, with most orders shipped directly by suppliers.
• No open marketplace: as of November 2026, Wayfair's supplier site (sell.wayfair.com), its supplier agreement updated November 14, 2025, and its 2025 annual report all describe the supplier model only; we found no program where third parties set prices and pay a commission. Partner Home and Wayfair's team have the final word.
• Where it sells: the U.S. (wayfair.com), Canada (wayfair.ca), the U.K. (wayfair.co.uk) and Ireland; Wayfair left Germany on January 10, 2025. It also runs physical stores in the U.S. A U.S. catalog can be replicated to Canada; Europe needs separate selection and translation.
• South Dakota v. Wayfair: the 2018 Supreme Court case that let states tax remote sellers was this Wayfair. Today Wayfair collects sales tax from customers as the retailer in the states that have one.

Description: the rows follow an order from inventory to after-sales, comparing drop ship with CastleGate and showing who collects, who pays and who files. Your supplier agreement and Partner Home rules control.

Step	Drop ship	CastleGate Fulfillment	Tax and compliance
1. Inventory	Goods sit in your own North American warehouse or a 3PL	Goods are forward-positioned in Wayfair's CastleGate warehouses (U.S., Canada, U.K.)	Inventory state: physical presence, possible sales tax registration and income or franchise tax
2. Import	You, your forwarder or your U.S. company clears customs	CastleGate Forwarding can consolidate from China, Vietnam and elsewhere; brokerage through designated brokers	Customs documents, classification and valuation risk sit with the supplier; duties go into inventory cost
3. Customer order	Wayfair sends a PO; you pick, pack and ship on Wayfair's label	CastleGate picks and ships	Wayfair charges the retail price and sales tax
4. Invoice	You invoice Wayfair at base cost	Same	Your sale to Wayfair is for resale; keep Wayfair's resale certificate
5. Payment	Within 60 days of the invoice; Quick Pay within 30 days for 2%	Same; CastleGate services are invoiced separately, due in 30 days	Payments arrive net of allowances, ads and chargebacks; book gross
6. After-sales	Freight damage and one-off defects: handled by Wayfair under the 5% allowance; packaging failures and parts are yours	Same	The allowance reduces revenue; parts and returns are costs

Wayfair has six brands: Wayfair, AllModern, Birch Lane, Joss & Main, Perigold and Wayfair Professional. There is no public, separate application for AllModern, Joss & Main or Birch Lane: you supply through the same Partner Home account and catalog, the supplier agreement lets Wayfair sell your products across its "family of websites" and other channels, and Wayfair decides which products appear on which brand site by style and price point. Perigold, the luxury line, has its own rules.

Wayfair's 2025 annual report describes the brands as different storefronts with their own identity, style and price point, stocked with strategically selected products. Section 3 of the supplier agreement (updated November 14, 2025) says you tell Wayfair in Partner Home which regions your products are compliant and authorized for, and Wayfair may sell them in any sales channel in those regions, defined to include its family of websites, physical stores, liquidation channels and shoppable marketing channels. Only the Wayfair brand currently operates outside the U.S.

AllModern: modern and simple

AllModern's tagline is "Modern made simple." It sells modern, minimalist and contemporary furniture, lighting and decor to urban households and young professionals who like clean lines and will pay a bit more for design. Suppliers don't apply to AllModern separately: products in your Partner Home catalog with strong attributes, style tags and imagery get picked by Wayfair's merchandising team and show up on AllModern. If AllModern is your target, make the images and style descriptions read as modern, and raise it with your account manager.

Joss & Main: a curated, trend-led edit

Joss & Main calls itself "the ultimate style edit for home." It leans toward trend-driven, design-forward pieces and styled inspiration, for shoppers who browse looks and room ideas. It started as a flash-sale site and is now one of Wayfair's specialty brands. Listing works the same way as AllModern: one account, one catalog, Wayfair's selection. Seeing your products on a brand site you never applied to is normal under the agreement.

Birch Lane: classic and traditional

Birch Lane's tagline is "Classic style for joyful living." It covers classic, traditional, cottage and farmhouse styles, for customers who want lasting solid-wood and traditional furniture. Listing works the same way. Suppliers of traditional solid-wood and upholstered furniture often find their products on Birch Lane.

Perigold: Perigold is Wayfair's luxury home brand, aimed at high-end shoppers and designers. Section 3.1 of the supplier agreement lets a Perigold supplier ask in Partner Home to limit sales to Perigold channels only. How luxury brands get onto Perigold, how it relates to Wayfair, and the tax issues of the trade channel are covered in the guide at yclcpa.com/perigold.

Wayfair Professional: the channel for designers, contractors, offices, hotels and other business buyers. Wayfair says every product on Wayfair is available on Wayfair Professional without a separate catalog; you can add a "Commercial Use" tag, commercial-setting images and pro-only pricing in Partner Home. Nothing changes on the tax side: you sell to Wayfair, and Wayfair sells to the business buyer.

Four steps: prepare your catalog and compliance, set up the Partner Home account, sign the supplier agreement and set up the inventory feed and insurance, then upload products and start selling. Wayfair verifies your business information during account review. Chinese suppliers most often stall on two things: no warehouse in North America, and incomplete product data or compliance documents.

Description: each row is a requirement, with what Wayfair asks for and what to watch on the tax and entity side. Partner Home and your signed agreement control.

Item	What Wayfair asks for	Watch out for
Business	Registration number and legal business details, verified at review	The entity you supply through decides where profit is taxed (Figure 4)
Tax ID and forms	Tax registrations tied to shipping locations; payers generally ask for a W-9 or W-8	U.S. companies give a W-9; foreign companies a W-8BEN-E; a foreign-owned single-member LLC's owner gives a W-8
Bank account	An account that can receive the selling currency (USD, CAD, GBP, EUR)	Account name matches the supplying entity
Warehouse	At least one warehouse or 3PL address in the selling region; or CastleGate	Wayfair: you need a warehouse or 3PL in North America to deliver
Product content	At least 3 images of 1000×1000 px or more; materials, dimensions, carton sizes, weight, wholesale cost, warnings	The wholesale cost is your revenue per unit; keep it consistent with invoices and books
Insurance	$1,000,000 per occurrence, $2,000,000 per year; Wayfair as additional insured; certificate of insurance	Premiums are an operating expense; tell Wayfair if coverage lapses
Compliance	Supplier Code of Conduct; products meet local rules	Test reports and certificates come from labs; product compliance is a legal matter
Integration	Partner Home by hand, or EDI/API for orders, inventory and tracking	Inventory updates per warehouse; multiple warehouses are managed separately
Returns	A return address, or Wayfair-managed returns	Returns, parts and allowances all go into the books
Agreement and fees	Supplier agreement; a monthly platform fee per supplier account (SUID) under the program terms	The amount is in the Partner Home program terms

• Who can apply: Wayfair recruits manufacturers, brands and wholesalers of home goods and furniture worldwide, and its supplier site has a Chinese version; exercise machines, medical devices, bicycles, power tools and computer hardware and software are among the excluded categories.
• Review time: Wayfair publishes no fixed timeline; third-party sources commonly say a few weeks.
• One account per supplier: the Supplier Code of Conduct generally allows a single account unless Wayfair approves a business need.
• The agreement: Wayfair's Master Platform Agreement is public at sell.wayfair.com; changes take effect 15 days after notice. Negotiating terms and allocating liability is work for a lawyer.

Wayfair requires every product to meet the rules where it's sold. For furniture and home goods the usual ones are the tip-over standard for clothing storage units, formaldehyde rules for composite wood, flammability standards for upholstered furniture and mattresses, California Prop 65 warnings, and children's product certificates (CPC). Labs issue the reports and lawyers advise; we cover only the bookkeeping and tax side.

• Tip-over (STURDY Act): dressers, chests and other clothing storage units must meet the mandatory CPSC standard (16 CFR 1261, adopting ASTM F2057-23) and carry warning labels.
• Formaldehyde (TSCA Title VI): furniture containing hardwood plywood, MDF or particleboard needs certified composite wood labeled TSCA Title VI compliant.
• Flammability: upholstered furniture must meet 16 CFR 1640 (adopting California TB 117-2013); mattresses fall under 16 CFR 1632 and 1633.
• Prop 65: products sold into California that contain listed chemicals need a warning.
• CPSC eFiling: since July 8, 2026, certificate data for CPSC-regulated imported consumer products is filed electronically through ACE at import.
• In the books: testing and certification fees are expenses or product development costs; recalls and claims are recorded when incurred.

Three options: ship from your own North American warehouse or 3PL; forward-position inventory in Wayfair's CastleGate warehouses and let Wayfair ship; or use CastleGate Forwarding to consolidate freight from Asia. Whichever you choose, inventory in a U.S. state gives you physical presence there, and the importer of record (IOR) decides who pays duty and who can claim refunds.

• Drop ship: Wayfair's primary method. You run or contract a warehouse and ship against Wayfair's purchase orders. Some 3PLs can't ship direct to consumers, so check first.
• CastleGate Fulfillment: Wayfair's warehouse network covering the U.S., Canada and the U.K., available once you have onboarded and started selling. Since 2025 its multichannel program can also ship your orders from other sales channels out of the same inventory.
• CastleGate Forwarding: Wayfair's freight arm, with 5 consolidation centers in China, 2 in Southeast Asia and 1 in India, offering ocean freight, customs brokerage through designated licensed brokers, and drayage to the warehouse.
• Who imports: Wayfair's CastleGate terms put customs documentation on the supplier, along with the risk of classification, valuation and compliance. So the importer is normally on the supplier's side: the Chinese factory as a nonresident importer, or its U.S. company. The entry summary shows who it is; confirm with the broker.
• Tariffs: as of November 2026, Section 301 duties on Chinese-origin goods remain; furniture also faces Section 232 duties of 25% on upholstered wooden furniture and on kitchen cabinets and vanities (the increase planned for January 1, 2026 was postponed to January 1, 2027, when the rates are set to reach 30% and 50%), and 10% on softwood lumber. The $800 de minimis exemption is suspended. The full tariff stack and refunds are in the guide at yclcpa.com/fba.
• Duties are inventory cost: duties, ocean freight, brokerage and delivery to the warehouse go into inventory and become cost of goods sold when units sell.

Wayfair pays within 60 days of receiving your invoice; Quick Pay pays within 30 days for a 2% fee. Payments arrive net: the damage allowance, advertising, CastleGate fees, returns, replacement parts and other deductions can be set off against what Wayfair owes you. Record revenue at the gross invoice amount and book each deduction separately.

• Damage and Defect Allowance, 5%: Wayfair's published policy deducts 5% from the wholesale cost of every product in exchange for Wayfair handling freight damage and one-off manufacturing defects reported within 30 days of delivery; replacement parts ship at your expense, packaging failures and other incidents stay with you, and Wayfair can change or end the arrangement. Book it as a reduction of sales.
• Monthly platform fee: the supplier agreement requires a monthly Platform Access Pass fee per parent supplier ID (SUID) unless an exclusion applies; the amount is in the program terms. Book it as an operating expense.
• Advertising: Sponsored Products (pay per click), Sponsored Shops and display ads are advertising expense.
• Quick Pay's 2%: the cost of early payment; book it as a finance cost or sales discount, consistently.
• Annual reconciliation: the agreement asks for a statement of open balances within 30 days after each year ends, and adjustments Wayfair proposes become final if not disputed within 30 days. Match Wayfair's remittance details to your invoices and deductions every month.
• Inventory and COGS: with average gross receipts of $32,000,000 or less over the prior 3 years (the 2026 threshold), you can skip UNICAP and use a simplified inventory method, but costs are still deducted when goods sell. On the accrual method, Net 60 leaves a large receivable at year-end; revenue is recognized on shipment or invoice, not on payment.

The big difference is who the seller is. Wayfair is your customer and you sell to it wholesale; on the other platforms you sell to the consumer, and the platform takes a commission, collects sales tax and issues a 1099-K. Wayfair fits furniture and home goods factories and brands that can supply steadily, accept wholesale pricing and 60-day terms, and have a North American warehouse or are willing to use CastleGate.

Description: each row is a point of comparison; the five columns are Wayfair, Walmart Marketplace, Amazon third-party selling, Etsy and TikTok Shop.

Item	Wayfair	Walmart	Amazon	Etsy	TikTok Shop
Who sells to the consumer	Wayfair (you sell to Wayfair)	You; Walmart is the marketplace	You; Amazon is the marketplace	You; Etsy is the marketplace	You; TikTok is the marketplace
Your revenue	Base cost; Wayfair sets retail	Retail price less fees	Retail price less fees	Retail price less fees	Retail price less fees
Main costs	No per-sale commission (the markup is Wayfair's margin); 5% damage allowance, monthly platform fee, ads	Category referral fee: furniture 15% on the first $200, 10% above; no monthly fee	Category referral fee: furniture 15% on the first $200, 10% above; $39.99 a month for Professional	$0.20 listing fee, 6.5% transaction fee, payment processing	About 6% in most categories
Fulfillment	North American warehouse drop ship or CastleGate	Self-fulfilled or WFS	FBA or self-fulfilled	Seller ships	Platform logistics or approved warehouses
Who can join	Home goods manufacturers, brands and wholesalers worldwide	Sellers in the U.S., China and 12 other countries, after approval	U.S. and international sellers	Handmade, vintage and craft supply sellers	U.S. local, cross-border and other store types
Sales tax	Wayfair collects as retailer; your sale is for resale	Platform collects	Platform collects	Platform collects	Platform collects
1099	Merchandise payments: generally no 1099-K or 1099-NEC	1099-K ($20,000 and 200)	1099-K (same)	1099-K (same)	1099-K (same)
Payout	60 days after invoice; Quick Pay 30 days for 2%	Generally every two weeks	Generally every two weeks, with a reserve	Per platform schedule	Per platform schedule

• Walmart: many home goods sellers run both. Walmart's entity, W-9/W-8 and 1099-K questions are covered in the guide at yclcpa.com/walmart.
• Amazon: third-party selling is in the guide at yclcpa.com/fba. Amazon also runs Vendor Central, where Amazon buys from you; for tax that is a wholesale sale, like Wayfair.
• TikTok Shop: see the guide at yclcpa.com/tiktok.
• Etsy: suits handmade and small batches, not usually volume furniture factories.
• 1099-K reconciliation: matching other platforms' 1099-Ks to settlement reports is in the guide at yclcpa.com/1099k.

Usually not. Your sale to Wayfair is a sale for resale, and Wayfair collects tax when it sells to the customer. The exemption needs paper: in states where you're registered or have nexus, keep Wayfair's resale certificate, or the state can treat the sale as taxable. Inventory in a state gives you physical presence there, and some states count wholesale sales toward their economic nexus thresholds.

• Resale certificates: ask Wayfair for its certificate for the relevant states, or a multistate certificate, and keep it on file. North Carolina's form is E-595E; North Carolina rules are in the guide at yclcpa.com/salestax. Some states don't accept the multistate form and want their own.
• Where a drop-ship sale is sourced: generally where the goods are delivered. If you ship from a North Carolina warehouse to a California customer, your sale to Wayfair is usually a California sale.
• Where to register: look at every state holding your inventory (your own warehouse, a 3PL, CastleGate) and every state where sales reach an economic nexus threshold, usually $100,000 a year; some states measure gross sales. Once registered, report the sales to Wayfair as exempt sales for resale.
• Other channels: if the same company sells on its own website, Amazon or Walmart, marketplaces collect on platform orders and you collect on your own site (see the guide at yclcpa.com/stripetax).
• Samples and own use: goods you use yourself or give away as samples and displays may owe use tax.

Generally not. A 1099-K is issued by a payment settlement entity paying sellers for customer transactions; Wayfair is the buyer, paying its own purchase invoices. The Form 1099-MISC and 1099-NEC instructions also list payments for merchandise as not reportable. So a Wayfair supplier usually has no platform 1099 to reconcile, and revenue rests entirely on its own books. Go by whatever Wayfair actually sends.

• W-9: U.S. persons, U.S. companies, multi-member LLCs and LLCs taxed as corporations give a W-9, with the name and EIN exactly as on IRS records.
• W-8: a foreign company gives a W-8BEN-E, or a W-8ECI if it has effectively connected income.
• A foreign-owned single-member LLC: without a corporate election it is disregarded for tax, so its foreign owner gives a W-8, not a W-9 under the LLC's EIN. If a payer's system offers only a W-9, ask first and follow your CPA's advice (see the guide at yclcpa.com/w8ben).
• No 1099 doesn't mean no income: Wayfair's payments are business income and all of it is reported. For comparison, other platforms issue a 1099-K at $20,000 and 200 transactions a year.

It depends on the entity and the facts. Supplying through a U.S. company makes that company a U.S. taxpayer filing Form 1120 at the 21% federal rate. Supplying directly as a Chinese company, or through a foreign-owned single-member LLC, means asking whether you are engaged in a U.S. trade or business, whether the income is effectively connected (ECI), and whether the U.S.-China treaty's permanent establishment rules apply. State taxes ignore treaties and need their own review.

• Produced inventory is sourced where it's made: under IRC §863(b), income from selling inventory you produce is sourced by where the production activity happens; goods made in China generally produce foreign-source income. Foreign-source income is generally not ECI unless the foreign business has a U.S. office or other fixed place of business and the sale is attributable to it (IRC §865(e)(2), §864(c)(4)(B)).
• Facts that change the answer: U.S. employees, an office or showroom; someone in the U.S. negotiating, pricing or signing for you; a U.S. company acting in your name. Any of these can create a U.S. office or permanent establishment.
• The treaty: the U.S.-China treaty generally says facilities used only to store, display or deliver goods are not a permanent establishment. Goods in a 3PL or CastleGate warehouse generally don't create one on their own, but read that together with the facts above.
• State taxes: inventory in a state generally takes you outside P.L. 86-272; it doesn't cover gross-receipts taxes such as the Texas franchise tax (no tax due for 2026 and 2027 reports at $2,650,000 or less, with nexus at $500,000 of Texas receipts) or Washington B&O. Companies and LLCs doing business in California (sales, property or payroll above California's annual thresholds) pay at least $800 a year in franchise tax.
• Profit doesn't disappear: a Chinese resident enterprise pays Chinese enterprise income tax on worldwide profit (generally 25%). Planning is about a reasonable, documented split between the two countries, not profit taxed nowhere.

Four common setups: the Chinese factory supplies directly; the factory forms a foreign-owned single-member LLC; it sets up a U.S. C corporation subsidiary that imports, warehouses and supplies; or a U.S. resident uses an LLC, S corporation or C corporation. Small volumes going entirely through CastleGate can start with the Chinese company; larger volumes with U.S. warehouses and staff usually use a U.S. C corporation. The foreign-owned single-member LLC looks simplest but is where filings and tax treatment most often go wrong.

Description: each row is an entity, with the form it gives Wayfair, what it files every year, where profit is taxed, who it suits and what to watch.

Entity	Gives Wayfair	Files every year	Where profit is taxed	Suits	Watch out for
Chinese factory, direct	W-8BEN-E (W-8ECI with ECI)	Usually no U.S. federal return; Form 1120-F if there is ECI; state taxes per inventory state	Mainly China; the U.S. too if there is ECI	Starting out, all goods in CastleGate	Product liability lands on the factory; a nonresident importer needs a customs bond; states ignore the treaty
Foreign-owned single-member LLC (no election)	The owner's W-8, not a W-9	Pro forma 1120 + 5472; with ECI the owner files 1120-F or 1040-NR	For tax, the Chinese company or individual is doing the business	Needs a U.S. entity for banking and contracts, modest volume	$25,000 per missed 5472; U.S. staff or an office can create ECI, and a foreign corporate owner may owe branch profits tax
LLC electing C corporation status on Form 8832	W-9	1120 + 5472	U.S.: 21% federal; dividends to foreign owners withheld at 30%, 10% under the treaty	An existing LLC that wants corporate treatment	Generally locked in for 60 months
U.S. C corporation subsidiary	W-9	1120 + 5472; 1042 / 1042-S on dividends; BE-13	U.S. at 21%; the factory's profit on sales to the subsidiary is taxed in China	High volume, U.S. warehouses and staff	Arm's length pricing with documentation; §1059A caps cost at customs value
U.S. resident's LLC / S corp / C corp	W-9	Schedule C, 1120-S or 1120	U.S.	U.S. residents building a home brand	No foreign S corporation shareholders; buying from China is an ordinary import

• Electing corporate status on Form 8832: a foreign-owned single-member LLC can file Form 8832 to be taxed as a C corporation, effective as early as 75 days before filing and no later than 12 months after. After a change in classification, another change by Form 8832 is generally barred for 60 months; an initial election effective on formation doesn't count. It then files 1120 + 5472, pays 21% federal tax, and withholds 30% on dividends to foreign owners, generally 10% under the U.S.-China treaty (see the guide at yclcpa.com/ccorp).
• U.S. subsidiaries: filings for foreign-owned U.S. companies, BE-13 and dividend withholding are in the guide at yclcpa.com/subsidiary; Form 5472 is at yclcpa.com/5472.
• U.S. residents: choosing among LLC, S corporation and C corporation is in the guides at yclcpa.com/entity, yclcpa.com/scorp and yclcpa.com/ccorp; which state to form in is at yclcpa.com/llc.
• ITIN: a foreign owner filing Form 1040-NR because an LLC has U.S. business income can apply for an ITIN with the return (see the guide at yclcpa.com/itin).
• No S corporation: foreign individuals and foreign companies can't be S corporation shareholders.

This is the core cross-border question. The price the U.S. company pays its Chinese parent decides whether profit stays in China or the U.S.: a higher price means less U.S. profit and more duty; a lower price means less duty and more U.S. profit. The IRS can move the price to arm's length under IRC §482, and under §1059A the U.S. company's inventory cost for income tax can't exceed the value declared to customs. Use one price and one set of documents for both.

• Arm's length: the U.S. company is a distributor that imports, warehouses, manages the Wayfair account and bears inventory and damage risk. Comparable independent distributors usually earn a steady profit; a U.S. company that loses money every year, or earns far below comparables, invites adjustment. A common approach works back from comparable companies' operating margins to the purchase price.
• §1059A: for goods imported from a related party, the cost the U.S. buyer puts into inventory can't exceed the customs value. Declaring a low value to save duty while booking a higher cost for income tax doesn't work.
• Form 5472: a U.S. company 25% or more foreign-owned reports its transactions with foreign related parties every year on Form 5472, including purchases from the Chinese factory, loans and service fees; each missed form starts at $25,000.
• Penalties: underpayments from a §482 adjustment can draw a 20% or 40% penalty under IRC §6662(e) unless qualifying transfer pricing documentation existed when the return was filed and is provided within 30 days of an IRS request.
• Documents to keep: the purchase agreement (price, delivery terms, transfer of title, damage risk), the pricing method and calculation, comparable company data, customs entries and invoices. A small company may not need a full report, but it needs these.
• Both sides consistent: Chinese tax authorities look at export prices too. Keep the same position on both sides of the same transaction so neither country adjusts it.

Example (hypothetical numbers, to show the method): a Chinese furniture factory sells $2,000,000 a year to Wayfair at base cost. Goods move through CastleGate Forwarding into CastleGate warehouses. Production cost is $900,000; ocean freight and delivery $100,000; duty is assumed at 25% of the customs value; the 5% damage allowance is $100,000; CastleGate storage and fulfillment $120,000; ads and platform fees $50,000. A U.S. company adds $80,000 of U.S. staff, office and accounting costs. State taxes, exchange rates and the exact Chinese tax are left out.

How to read it:

• A1 versus A2: each $200,000 added to the purchase price cuts U.S. profit by $250,000 (including $50,000 more duty) and adds $200,000 to China. The right price isn't whichever side has the lower tax; it's the profit a comparable distributor would earn for the U.S. company's functions and risks. Whether 2.5% is too low has to be shown with comparable data.
• The §1059A limit: in A2 the customs value is $1,200,000, so inventory cost for income tax is capped at $1,200,000; you can't declare $1,000,000 to customs and book $1,200,000.
• Dividends: if A1's U.S. company pays its $237,000 after-tax profit to the Chinese parent, 10% treaty withholding is $23,700; profit kept in the U.S. for growth bears no withholding.
• B looks lightest on U.S. tax, but: the profit is taxed in China; the factory faces U.S. product liability directly, needs a customs bond as a nonresident importer, and owes state taxes in inventory states (no treaty protection); once it has U.S. employees, an office or agents signing deals, the income can become ECI, with Form 1120-F and possibly branch profits tax for a foreign corporation.
• C, a foreign-owned single-member LLC: without an election, the tax result is the same as B plus annual pro forma 1120 + 5472 filings; with a Form 8832 corporate election, it is the same as A. Forming a U.S. LLC doesn't by itself make you a U.S. corporation for tax.

The takeaway: settle the structure and the price before the first entry is filed. Once customs values are declared and Form 5472 is filed, changing course is expensive.

Start with who you are (Chinese factory, U.S. company or U.S. resident), how goods enter the U.S. and where they sit, then decide whether you need a U.S. company. Common situations:

• Situation A: a Chinese factory testing Wayfair. Apply with the Chinese company, give a W-8BEN-E, move goods through CastleGate Forwarding into CastleGate; decide the importer first and review state taxes in inventory states; no U.S. staff or office.
• Situation B: a Chinese factory that already has a foreign-owned single-member LLC. Catch up any missing pro forma 1120 + 5472 filings; check whether Wayfair has a W-9 or W-8 and correct it if wrong; at higher volume, weigh a Form 8832 corporate election or a separate C corporation.
• Situation C: a Chinese factory setting up a U.S. subsidiary for Wayfair and other platforms. Form a C corporation, get an EIN and a bank account; sign the purchase agreement and set the purchase price and customs value; the subsidiary is the importer; file 1120 + 5472 every year and BE-13 within 45 days of formation.
• Situation D: a U.S. resident's home brand sourcing from China. Choose LLC, S corporation or C corporation; get Wayfair's resale certificate; register for sales tax in inventory and nexus states; put inventory and duties into cost.
• Situation E: already supplying, with books kept on net deposits. Download invoices, remittance and deduction details from Partner Home, rebuild revenue at gross, and separate allowances, ads, returns and platform fees; for years with errors, consider amended returns.