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Business Tax IDs, Reseller Applications, & How To Get Started With A Wholesale Distributor |
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Business Tax IDs, Reseller Applications, and How to Get Started With A Wholesale Distributor
One of the single most important aspects of successfully selling products online is being able to obtain products and process them from a REAL wholesale supplier directly. When you get stuck using a middleman "service", you not only pay more in shipping and fees for your orders, but you also hurt your own profit margins. You can avoid these risks by working with Inventory Source, the largest and most trusted data service provider for drop ship resellers. We have been working to help resellers work directly with verified wholesale suppliers since 2002. You can see how much these middleman "services" cost you by using our Middleman Drop Ship Calculator: CLICK HERE
However, it is important to understand that trust works both ways. Many wholesale product distributors, especially those that offer drop ship products, know that some online merchant either do not want to dedicate the time needed to run a home-based business or they might simply create an account to get access to discounted prices for direct purchases. A large percentage of new wholesale accounts are created by resellers who are just looking to research prices or are not able to get setup with a website to sell products online. The application process and client management activities can be expensive for wholesale programs, so sometimes they are reluctant to take on the risk and cost of approving and maintaining accounts unless they know the applicant is committed to their new business venture. Some wholesalers might add additional steps to their application process to help weed-out the less serious applications. After all, if you are not willing to take 10 minutes to complete an application, you are likely to be less willing to put in the time need to market or manage your online product sales. What does this mean for you? Jut know that a wholesale reseller application does not have to slow you down, and it is not something to fear. With a little preparation you can start the application process correctly and make the impression you need to form a successful business relationship.
1. Business Name and Tax ID/Reseller ID:
It is surprising how many entrepreneurs let this simple step prevent them from successfully selling online. If you are looking for a way to sell products as a business, without actually being a business, you will quickly realize the only companies willing to sell to you are other resellers disguised as a product source. A legitimate wholesale distributor must verify that you are authorized by your state to collect sales tax, which is easily captured by any online marketplace or store platform. Real wholesalers can loose their business license if they sell to resellers without collecting a tax ID or reseller ID. Some distributors might be located in a tax exempt state or the specialty products they supply could be non-taxable, but this would be the exception rather then the rule. (It is important to note as well that while real wholesalers will ask for a Tax ID, there is nothing keeping a middleman or fake wholesaler from asking for this as well. After all, the more we educate drop ship resellers about how to find true wholesalers, the smarter these middleman companies try to become to get new accounts. Asking for a Tax ID, even when they have no use for it, is an easy step for a website to take to try to make themselves look more legit. Of course, you can avoid some of this headache by using our free verified wholesale drop ship supplier directory with your free account status.) Make the right impression when beginning your application and have these details on hand when starting your application process with a new distributor. Learn more about Tax and Reseller ID's here: CLICK HERE
Make the right impression when beginning your application and have these details on hand when starting your application process with a new distributor.
2. Trade References:
It should not come as a shock that companies are concerned about credit, perhaps now more then ever. Distributors often extend credit to their retailers with "Net Payment Terms". This allows you to order products for your customers, receive an invoice, and pay for your orders after the products have been shipped. Sometimes the supplier might allow 30 days or more for the payment to be submitted. When credit payment terms are offered, part of the application process will include some form of bank or trade references. This just means the supplier wants to verify you have a valid bank account or have a good relationship with other suppliers where you order products for your business. They can also check your credit before offering you payment terms, just like a credit card company would before approving you for a new card. If you are new to online sales, do not worry. Some suppliers only allow credit card payments or upfront payments when you place orders. Also, those programs who might ask for account bank or trade references often allow both payment types. If these details are an issue for you to produce at this stage in your operations, simply let your wholesaler know you are not looking for extended credit terms and that you are willing to pay for the products at the time of order placement. This can also be done to speed up your application process. Moreover, once you have worked with them and have a track record of good payments, you can often request payment terms if needed or easily use them as your first trade reference. Some resellers work with multiple suppliers when starting a business for this reason. They might start with 2 or 3 suppliers with a simple application process and credit card payment options and as they build a trade reference history they find it is easier to create accounts with a growing network of distribution sources.
3. Common Questions:
How Long Have You Been In Business?
Honesty and integrity are just parts of being in business and building your brand and reputation. If this is your first venture, let them know. You want to be honest with your wholesaler so they do not close your account once you have begun selling your products online and committed yourself to new product sales. Every business had to start from somewhere, but just let them know you are prepared to take your business seriously. If you prefer, you can let them know you are already using Inventory Source data services to support your online sales and are ready to easily manage your online product listings. This way they know you are committed to running a fully managed ecommerce enterprise promoting their latest products and selling products online with custom category tools, MAP protections, quantity stock checks, product marketing file support, and more. Also, by being upfront with the distributor about your experience, they might have some sales reps who are more specialized in helping new accounts become more successful. Some of the smaller programs may not assign a reseller to a specific representative, but the larger distributors often assign an account representative to each reseller in their program. A new seller has different needs and questions then the more established and experienced merchants, so by being clear about your current status and experience, the distributor has a chance to match you with an appropriate sales representative.
Do You Sell From a Physical Storefront?
Some wholesalers, especially smaller regional distributors, want to see a picture of your brick-and-mortar location or verify that you are already in business selling and marketing physical inventory. This happens when they have rules they must follow to protect physical sales territories or rules enforced by the manufacturer who might only work with smaller regional distribution companies. Sometimes this is just another common question on the application so they can get an understanding of how you might stack up in their reseller network. If you have one or more physical storefronts they might expect you to be one of their new larger sales account and may want to offer price discounts, additional services, or simply change your account type to include a corporate relationship manager. However, some firms ask this question because they might have rules about which products they allow to sell online so they prevent internet only resellers from creating accounts. Inventory Source helps to take the guess work out of this process by only integrating with suppliers who are already setup to approve new online specific resellers.
There are challenges to selling products online and running a successful ecommerce business...but creating a wholesale drop ship reseller account is NOT one of them. Inventory Source can help you find distributors to work with, and we provide you with the details needed to create your account with these suppliers more quickly. And, with a few minutes to prepare, you can easily complete your application approval process and begin selling products online. When you work with the distributors directly, this direct relationship is the clearest way to succeed in ecommerce sales. |
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