Key Tips To Help Make Sense Out Of Wholesale Sourcing

Before you rush out and try to set up as many wholesale accounts as you can, it is essential that you have a grasp of a few wholesale business basics. Wholesalers are businesses authorized to distribute new products from the manufacturer and are licensed by the state in which they reside to sell to retailers without charging sales tax. The wholesaler is responsible for the warehousing of its product lines, establishing and maintaining a sales force as well as arranging shipping and handling and the various means of transportation and the tracking of orders and order fulfillment. The clients of wholesalers are retail business purchasing in bulk quantities. Although many wholesalers have single unit wholesale price, the point of a wholesale business is to sell in as large a volume as possible as that is how it makes a profit.

Many ecommerce newcomers and eBay sellers want to know how to get those low wholesale prices. The key to low prices is buying in bulk. Generally, the greater the quantity, the greater the discount. Many wholesalers have discount increments or discount tiers. Other wholesaler let their sales people handle discounts, but an example of a discount increment would be offer one price for quantities of 1 to 10 items, a lower price of 10 to 50 items, a still low price for 50 to 100 items, and a still greater discount for quantities above 100.

Many people starting out are mystified by pricing and getting low prices on goods. There really isn't any mystery to this at all. The secret, with respect to wholesale suppliers, is making sure you are dealing with true wholesalers and in purchasing is large quantities. Also, some large wholesalers, such as DBL, offer specials on certain items where the usual wholesale prices are even further discounted, or where shipping is free. Other wholesalers are able to offer manufacturer rebates, but you can really only take advantage of these sorts of price benefits if you are able to purchase in bulk. Many small ecommerce merchants can't afford to do this and so must work with higher prices.

Legitimate wholesale businesses in the United States are required to see proof of your sales tax permit, sales tax ID, or resale certificate. A sales tax permit is a document from your state department of revenue that allows you to buy products from licensed wholesalers without paying sales tax. It is understood that when you sell your products to residents of your state that you will remit the sales tax to the state treasury at quarterly tax periods. The sales tax permit is an essential document proving that you are a legitimate retail business.

Just as true wholesalers are required to have proof of your sales tax ID, you must be aware that any business claiming to be a wholesaler or implying that it is a wholesaler but not requiring your tax permit is not a real wholesale business. These sorts of distributors are often called middlemen. Middlemen are simply retailers selling discounted goods to other retail businesses. This is only bad when the middleman advertises that it is a true wholesaler or strongly implies this it is a wholesaler. How can you tell the difference? First and foremost, these businesses do not ask you for a sales tax ID. Second, they often use the term "wholesale" and "wholesale prices" frequently throughout their site but never come right out and explicitly state that they are a wholesale distributor.

Did you know that real wholesalers will not let you see their price list until you set up an account? This is partially a safeguard against competition, but it is also part of doing business. There really is no need for a true wholesaler to show off their prices on the Internet as they don't rely on the Internet to acquire customers. You must deal with the wholesaler as any other brick and mortar retailer even though your store is online. Thus you must set up an account. The first step in setting up an account is to follow the instructions either given in correspondence on those listed on the company website. Do not badger with company with repeated emails, and phone calls. All it takes in one email, or one phone call, or simply following the steps given on the website. Remember to be professional, and be prepared to provide proof of sales tax permit, proof of references, proof of ability to pay, and some wholesalers will want proof of a business bank account. In my experience, wholesalers are primarily concerned that you are a real business and meet the requirements of legality.

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