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How to Source Wholesale Products
If you’re starting a retail business and looking for products to sell, you’ll need to find reliable wholesale suppliers. Sourcing wholesale products can be challenging, and there are certainly lots of pitfalls that business owners need to look out for. This serves as a guide with some helpful tips for finding the right wholesale product sources for your business in the US.
- Manufacturers: Most times buying direct means a high minimum order. Usually manufacturers will have smaller retailers buy their product through one of their local distributors. You can find this information either on the manufacturer's website or by contacting them directly.
- Distributors: Usually distributors tend to carry a large variety of products in a certain category (say pet products) from several manufacturers. Their prices are slightly higher than buying direct, but minimum quantities are usually low and you have the convenience of purchasing products from different manufacturers on one purchase order.
- Liquidators: If you are flexible about your product needs, this is a fantastic way to get a real break on price. Many times you can purchase a bulk load of product for up to 75% off the original wholesale price. Consider your purchases carefully because once a product is sold out it's usually gone for good.
- Importers: If you plan to sell specialty products from another country, you’ll likely have to go through an importer to get them.
- Drop Shippers: If you have an online business, drop shipping is one of the best ways to supply products for your business without worrying about manufacturing processes or warehousing costs. Drop shippers are basically distributors in that they buy from manufacturers or other distributors, but they will ship orders directly to your customers for you, as orders are placed.
- Local Business License: Typically, the city or county where you are operating your business will require that you have a local business license. Just call or visit your city hall to find out what the requirement is in your jurisdiction.
- State Business License: Unless you are selling products such as alcohol or cigarettes, you probably won't be required to have this license. You can find out your state's requirements by simply calling your local government offices.
- Sales Tax License:If you live in a state that collects sales tax, you will most likely need this license. Having it will allow you to legally charge sales tax to customers purchasing your items. By calling your State Franchise Tax Board you can find out how to get this license.
- Federal License:This license really only applies to a very small portion of businesses that are selling products or services that are highly regulated by government agencies (i.e., if you are selling firearms or offering investment advice). If you think your business falls into that category, you can call your state government offices for more information. However, if your business is required to have this type of license, it may be best to hire an attorney to make sure you are complying with every law and have all the necessary licenses, permits and documentation.
Seller's Permit (also referred to as a reseller's permit or sales tax permit):This permit is typically required for businesses that are purchasing wholesale products for resale. Usually your State Franchise Tax Board is the agency that grants this permit.
You can also set up payment terms and arrange credit with your suppliers, so make sure to ask them what kind of options they can offer you.
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