Do You Need a Wholesale License to Sell?

If you plan on starting a business where you will be selling products, you most likely will want or need a wholesale license (also called a seller’s permit or resale license).

A wholesale license enables a person to buy merchandise at discounted wholesale prices with the intention to resell the products to customers at higher retail prices.

One benefit, of course, is being able to pay less for your inventory. Many of these wholesale supplies will not sell to you at the significantly discounted prices unless you have a wholesale license.

A second benefit is that a wholesale license enables retailers to avoid paying sales tax when they acquire the merchandise – instead they collect the sales tax from their customers. As you collect sales tax from your customers, you submit that money to your state on a quarterly basis.

If you develop your own products or design your own retail items using supplies that you do not get from wholesale sources, a wholesale license may not be necessary.

Since each state handles sales tax differently, check with your state’s Board of Equalization, which is where you obtain a wholesale license anyway.

Before applying for a wholesale license, you will need a Tax ID number and a sales tax license so that you can collect taxes.

More instructions on getting a seller’s permit/resale license.

For more small business ideas, visit The New Business Idea. You can also get start-up instructions for 200+ businesses and download the Home Business Start-Up Checklist free from HomeBusinesscenter.com.