Many entrepreneurs wonder, "Do I really need a license for this?" when starting a business involving used goods. In this article, we introduce specific criteria published by the National Police Agency to clarify these boundaries.

With the explosion of online platforms like Mercari and Yahoo! Auctions (Japan's equivalent to eBay), it has never been easier to buy and sell used goods. These platforms are popular not just with Japanese locals but also with the foreign community here. To ensure you can trade safely and legally, it is vital to understand the rules.

The Secondhand Articles Dealer Act exists primarily for one reason: crime prevention. Its purpose is to prevent the buying and selling of stolen goods, aid in their speedy discovery, and ensure victims are compensated.

What is "Secondhand Goods" (Kobutsu)?

Article 2, Paragraph 1 of the Act defines "Secondhand Goods" broadly. It covers three main states:

1. Items that have been used.
2. Items that have not been used but were traded for the purpose of use.
3. Items from the above categories that have been maintained or repaired.

The "New but Used" Trap
The phrase "traded for the purpose of use" is the critical legal standard. It means that once an item has passed from a retailer to a consumer, it becomes "Kobutsu" (Secondhand) even if the box has never been opened.

• Example: A gift voucher or a boxed tableware set bought by a consumer for gifting purposes is legally considered "Secondhand" if that consumer tries to resell it.

Maintenance vs. Alteration
The law also covers items that have undergone "some maintenance." This refers to repairs that do not change the item's fundamental nature or utility.

• Examples: Cleaning the surface of a painting or re-sharpening a Japanese sword.

What is "Secondhand Business"?

Article 2, Paragraph 2, Item 1 defines "Secondhand Business" as the business of buying, selling, or exchanging secondhand goods (or doing so on consignment).

However, the law explicitly excludes operations that "only involve selling secondhand goods" or "only involve buying back items legally sold by oneself to the counterparty."

What does this mean in practice?

• Selling Personal Items: If you are simply selling items you used yourself, this is not considered "Secondhand Business." No license is required.
• The Buy-Back Exception: If Company A sells a product to Customer B, and then Company A buys that specific product back from Customer B, this does not require a license. (However, if A buys the product back from Customer B via a third party C, the exemption does not apply).

The Grey Area: Reselling, Flea Markets, and Recycling Shops

The National Police Agency's interpretation guidelines state that determining whether trades at recycling shops, bazaars, or flea markets constitute a "business" requires looking at the specific reality of the transactions and the intent for profit.

Case Study 1: The "Free Retrieval" Recycling Shop
Consider a shop that collects items for free (or charges the owner a disposal fee to take them), repairs them, and then sells them.

• Verdict: This shop is engaged only in "Selling." Since they did not "Buy" the inventory, they are generally exempt from the licensing requirement.
• Caveat: If they pay even a small amount to acquire the stock, it becomes "Buying," and a license is required.

Case Study 2: Flea Markets and Online Reselling
Whether selling at a flea market counts as a regulated business depends on a comprehensive judgment of factors: the value of goods, frequency of sales, volume of purchasing, and profit motive.

If it is recognized that you are repeatedly and continuously trading for profit, it constitutes "Secondhand Business."

The "Reseller" (Tenbai) Distinction
This is the point most readers need to watch carefully.

• Scenario A: You buy clothes for yourself, wear them for a year, and then sell them on an app or at a flea market. Result: No License Required (Selling personal belongings).
• Scenario B: You go to a thrift store specifically to buy underpriced clothes with the intention of selling them on an app or at a flea market for a profit. Result: License Required.

Even though the act of selling at the market looks the same in both scenarios, Scenario B involves "Buying for the purpose of selling," which triggers the licensing requirement.

Summary

The secondhand business is attractive because the barrier to entry is low. It is common for a hobbyist selling their own unwanted items to gradually drift into buying items specifically to resell as they realize there is money to be made.

Because the transition from "decluttering" to "business" is seamless, many people operate without realizing they have crossed a legal line and now require a license.

Operating without a license can lead to arrest or fines. If you are unsure whether your side hustle has evolved into a regulated business, we strongly recommend consulting the police or a legal specialist before proceeding further.

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