Wholesale companies provide products to retailers.
Wholesalers sell to licensed retailers. It is important for tax purposes that the wholesaler be diligent about checking the credentials of the companies that get products. Some wholesalers choose to sell in bulk to private parties, but usually require some form of membership for the privilege and must charge tax to individuals. As more trade happens on the Internet, it has become challenging to verify the credentials of those official "retailers," yet still just as important in order to protect your wholesale license. As a representative, you should know what the wholesaler wants and frame your questions around the needs of the company.
General Information Questions
The person attempting to set up the account with you needs to provide all the basic information about the company. Ask questions regarding where the company does business, as well as its name, address, mailing address and any other contact information. The easier it is to follow up with the company, the better. It helps to ask how the company prefers contact, such as email. Email gives you a clear paper trail and sometimes elicits faster response times.
Acquire State Tax ID Number
The tax ID number is key. As a representative, you need to have this number before moving forward with any business -- otherwise, the wholesaler needs to charge tax. Also, depending on the rules of your state and your wholesale license, you may only be able to sell to retailers. If your company has an additional seller's permit, you can sell to both businesses and private parties. You need to decide whether holding both a license and permit is worth it to you.
What is the Size of the Account?
Wholesalers should ask the expected size of the account, how much the business will require on a regular basis. If you are a small wholesaler, the company might be requesting more than you can handle in your storage. If you are a larger wholesaler, the account might not be worth the man-hours to provide the product. These things affect the overall profit margin of your business.
Expected Turnaround
A new account poses many questions when it comes to product expectation. If your company keeps mass amounts of product on hand your turnaround times might be limited. If you tend to predict the movements of the companies you provide for, you might have less inventory available. Ask what the company expects the turnaround to be and how often the business will place orders. An agreement needs to be reached. Depending on your business, you might have static days orders need to be in by, if you only ship once or twice a month. Ask the client if this situation works. Go over additional pricing for emergency orders.
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