Businesses resell goods to the public from wholesale suppliers.There are more than 300,000 wholesale suppliers in the US.You can buy from a wholesale company without paying sales tax if you have a reselling permit.There are different directories where you can find wholesale companies.Negotiating a contract that fits your needs is important when buying from a company.
Step 1: You should establish a business entity.
The legal form of your business should be a corporation, limited liability company, partnership, or sole proprietor.You may have to file with the Secretary of State in your state.You have to pay a fee if you want to form an limited liability company.You will need to pay a fee to form a corporation.
Step 2: Obtain a tax payer's identification.
You should get a taxpayer ID number if you have to pay taxes.You can use your Social Security Number if you are a sole proprietor.You should apply for a FEIN with the IRS.You can apply for your FEIN at theirs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.
Step 3: Get a permit.
It is possible to buy goods from a wholesale supplier without paying a sale's tax.When you sell to the public, you have to collect sales tax.You end up paying taxes to the wholesaler if you buy from them without a permit.Some wholesalers will not sell to the public because they don't want to collect taxes.Depending on the state, this permit or license goes by different names.It could be called a resale permit, resale certificate, or sales tax permit.Call your state's taxing authority to find out how to get the permit.You will need to complete an application.Some states will use your taxpayer ID as a sales tax ID.
Step 4: You can search online.
The easiest way to find companies is on the internet.To narrow the results, you should search by the product you want to buy and include your zip code.If you want to buy T-shirts in Brooklyn, you can type "t-shirt wholesale Brooklyn."You can use advanced search to find location and merchandise.
Step 5: Visit trade shows.
Suppliers attend trade shows.You can find upcoming trade shows by looking at trade show directories.You can search by location and industry.If you are in the bridal/marriage business, don't search for trade shows that cater to the insurance industry.Think broadly.You might use a lot of printing and graphics in your bridal business.If you need to buy printing supplies in bulk, you could attend a trade show.
Step 6: Take a look at trade magazines.
There might be a few trade magazines in your industry.They can be found in your library or online.Look at the ads if you want to locate a physical copy of the magazine.Advertisers put ads in these magazines.If you have a small library, it probably doesn't carry trade magazines.If you can get a copy from another library, ask the interlibrary loan department.
Step 7: Business owners can give you referrals.
Other business owners can help you find the best wholesale suppliers.Write down the names and contact information of the suppliers.Competitors don't want to let you know where they get merchandise for rock bottom prices so it's difficult to get referrals this way.You can connect with other business owners at out-of-state networking events.Ask business owners in other industries.You could sell T-shirts as part of a youth apparel business.Someone else might give away T-shirts when consumers buy computer services.Both of you use T-shirts, but you aren't competitors.
Step 8: Ask the brand manufacturers.
Brand manufacturers only sell directly to large businesses.If you want to buy from a small business, you can still call.The names of distributors can be given by the manufacturer.You can find the brand manufacturer's contact information online.Some of the products may have a manufacturer's contact information in the packaging.
Step 9: Determine potential wholesale suppliers.
It's hard to find information about wholesalers.There are many shady middlemen who hold themselves out as wholesalers.Is the wholesaler selling to the public?Wholesalers only sell to retail establishments.Are you charged a monthly fee?There are legitimate companies that do not charge a monthly fee.If you are running a drop-ship business, they will charge you a fee.
Step 10: You can open a wholesale account.
You should tell the company you want to create an account when you find them.They want to know if you are a legitimate business.They want to see your tax ID and legal documents.They will probably negotiate with you about prices before you are approved.
Step 11: Multiple suppliers will give you quotes.
Don't go with the person you find first.Get quotes from at least three different companies.You should be sure to get the best deal.This is not always possible.If you need a certain brand, you might be stuck with one distributor.
Step 12: Discuss the price.
It is difficult to find a good price for a small business.When you buy a large number, the price per item is reduced.As a small business, you may not be able to store thousands of products at the same time.If you're an established business, you need to prove it to the wholesale company.Someone with a track record of selling large quantities of products is more likely to do business with them.Inform the company that you are getting other quotes.They might be able to lower their prices because of this knowledge.You can offer to pay more.You might have more leverage if you pay more.It is a sign that the goods are low-quality to have extremely low prices.Before you sign a contract, you should ask for samples.
Step 13: Negotiating other terms lowers prices.
If the wholesale supplier won't budge on price, you should try to negotiate other favorable terms which can collectively lower your price.Try to get a better deal on faster shipping for free.Getting the products faster can improve your client satisfaction.A longer warranty.There are larger discounts when buying in bulk.
Step 14: Analyze other terms.
The following terms are in the wholesale contract.You need a contract that works for your business, and you should be prepared to negotiate changes to the delivery schedule if necessary.Will the goods be sent when you need them?If you can only accept goods in the morning, make sure the wholesaler doesn't only deliver after noon.There are minimum orders.Minimum purchases may be required by some wholesalers, e.g., 5,000 items.If the minimum is not reasonable, go with someone else.Return policy.It is possible that the products are not what you were expecting.Make sure the contract allows for a return.
Step 15: A lawyer can review a wholesale agreement.
You can find a business attorney.Show the lawyer the contract and ask how you can protect yourself.You can get referrals from other business owners.Ask your local Chamber of Commerce if they can refer you to someone.You can get a referral by contacting your nearest bar association.