Finding A Legitimate Wholesale Source

Finding a legitimate wholesale source is an extremely important part of your business. Without the right wholesale source you will find out that it's extremely hard to compete with other businesses. True wholesale sources offer low pricing which allows you to resell for a hefty profit. With all the scammers and middlemen out that there that pretend to offer true wholesale pricing, finding a good wholesale source can be extremely confusing. Hopefully this information will clarify this topic for you.

Acquiring A Business License and Tax Id

Prior to finding a wholesale source, you need to make sure your business is legal. Most legitimate wholesale sources are not willing to deal with you if you aren't a legal business. You do not need a storefront to acquire a business license. However, if you do not have a storefront, you will not be permitted to sell items out of your home. Visit your local neighborhood development office to apply for a business license. If you don't know where this is, call the information number for your city and they should be able to help you. After you acquire a business license, you can apply for your tax id or EIN (Employer Identification Number) online from the IRS. You should also apply for a resale certificate from your state's website.

Wholesale To The Public

Most legitimate wholesale sources DO NOT wholesale to the general public. Those that do are often middlemen who pretend to be wholesalers or are selling products that have been devalued and don't have a solid retail value. A lot of the people who purchase from these companies are not business savvy and often buy in large bulk to resell the products for a lower price than it would cost for you to buy from the wholesaler. True wholesale companies will offer lower pricing if you purchase in bulk, but solely to increase your profit margins. Companies that are caught devaluing their products will often get a harsh warning or will be suspended from using them as a source. Wholesalers to the public do not keep track of who's buying from them which makes it impossible for them to cut off these resellers. Many of these wholesalers like the business they're getting and will not cut off these resellers if you asked them. The only wholesale sources that you should purchase from that do wholesale to the general public are liquidators. These are basically companies who purchase and resell closeouts and business surplus. You can often purchase products from them for below wholesale pricing. The only problem with buying from a liquidator is that you may not be able to purchase a steady supply of the same product from them. Therefore if you find a product that sells really well, you may have to find a true wholesaler of that product.

Legitimate Sources Ask For A Tax Id

Almost ALL legitimate wholesale sources require a tax id or resale number. The is often required on their signup form. You may also have to fax them a copy of your business license or resale certificate for further verification. Most companies who do not offer true wholesale pricing don't choose this business model. This is mainly because most business owners are familiar with the wholesale trade and will immediately figure them out. When choosing a wholesale source make sure they require a tax id to verify you are a business owner. Some wholesalers require this simply for tax-exempt purposes if you live in their state. These companies wholesale to the public and add the tax id area on their sign-up form to mislead you.

Verify The Wholesaler

You should always verify that the wholesale source you are dealing with is legitimate. Make sure they give out all their contact information including their business name, address, and phone number. You may also want to call their customer service number and ask for their business license number. Check with the Better Business Bureau to verify that they don't have any serious complaints. You may also want to Google them to see what other people are saying about their company. With all the scams and fraud going on in this world, you can never bee too sure about who you're dealing with.