There are different niches in the world of commerce that must be filled by those with the will. Distributors store products on mass and resellers play the role of middle man between the distributor and retailers. Resellers are also growing in the capacity of selling directly to consumers which saves money when compared to a traditional brick-and-mortar storefront. Becoming a merchandise reseller may seem complicated and difficult but almost anyone can do it.
Apply for a resale license, reseller certificate or a seller's permit. Different states have different names for the same basic certification. This license allows you or your business to buy any product without having to pay sales tax. To avoid paying taxes, present your certificate to any store or license ID number to any website when purchasing products.
Apply for a DBA inside your county's court house. A DBA is also known as an assumed name or a business name. To operate as a business for tax purposes a DBA is required. Having a DBA also adds a professional image to your business.
Open a separate business checking account. Some states allow business acounts to require only a DBA while others require both a DBA and tax-ID number. This will allow your business' finances to be separate from your individual finances. Having a reseller tax-ID allows your business to operate separate from your personal taxes filed under your social security number.
Apply to distributors and wholesalers that specialize in products you wish to resell. All distributors and wholesalers require resellers to provide a copy of their tax-ID certificate/permit. Some require a business checking account as well as a copy of a DBA. Once approved, your business will be able to purchase large quantities of merchandise with the tax benefits that your reseller certificate/permit provides.
Tips & Warnings
- Keep precise financial records. Most states require quarterly tax payments for purchases made under your tax-ID.
- Photo Credit back of a resale shop image by Steve Johnson from Fotolia.com
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