The most crucial part of an upcoming fashion boutique owner is how to get a wholesale license for clothing business. Generally newly entered fashion boutique owners remain confused how to get a wholesale license for clothing. Getting a license for wholesale clothing is very important specially for buying wholesale. Most of the renowned and well reputed wholesale clothing manufacturing companies require the licenses for making any deals with the fashion boutique owners to ensure their authenticity.
As a retailer you might be thinking of buying wholesale products from wholesalers to minimize your costing and to maximize your profit. When you are thinking of buying wholesale it means you don’t have to pay any sales tax. Now if you are searching to know how to get a wholesale license for clothing. The discussion made below will be helpful for you.
Do You Need a License to Buy Wholesale?
If you are starting your business, you will need a wholesale license. No matter what type of business you are starting. Before starting any business where you will be needing some wholesale stuff to purchase from wholesalers, you must need a wholesale license.
First of all, the wholesale license will make it legal for you to buy products in a bulk from the wholesalers.
Secondly, you will be able to make more profits by purchasing products in bulk because you will be able to resell to the retailers at a higher price.
Again, the most advantage of having a wholesale license is you don’t need to pay any sales tax for selling your products to the retailers.
The other benefits of having a wholesale license are – you will be proved as an authentic retailer supplier to your customers and a trustworthy one to your wholesale suppliers as well while making a deal for your business. In such a way, you will develop your business authenticity and your transparency. All of them who are working with you will know that you are following all of the law and regulations. These will make your business grow easier and faster.
What Kind of License Do You Need to Buy Wholesale?
When you are starting your own clothing brand, you must be designing some unique collections to sell from your own boutique house. For this, you must need a clothing manufacturer to supply your designed products. And for making any deal with the clothing manufacturer you will need your license. Because almost all the clothing manufacturers out there require the wholesale license before working with the retailer business owners. So, you must have your license first to make the deals with them. Anytime you may have to show the license to prove your authenticity.
Your wholesale license will show the state in where your business is located. It is even called a sellers permit, resale ID, wholesale ID, retail ID and a reseller’s license.
Anyway, to get a wholesale license you may have to get some prerequisites. Likely, before applying for the wholesale license your business must be registered with the IRS. Then you will be needing an employer identification number which is the EIN. You will also be needing a sales tax license and a state tax ID number. These are the essentials that you need to have in place before even applying for the wholesale license.
How to Get a Wholesale License
Although the applications and fees for a wholesale license vary from state to sate, there are some basic process for getting a wholesale license what are given below –
- You have to register your business. For this contact the IRS to apply for an EIN which is also known as a federal tax identification number. This is very important. Because unless you ensure doing these, you will not be able to conduct your business and also to hire employees.
- Get a sales tax license. You can get help from your state’s tax office. The application and fees will differ from state to sate.
- Next you have to apply for a state tax ID number. It will allow you to charge taxes from your retail buyer, for paying your state taxes, for paying your employees.
- Finally it is time you can get your wholesale license. For applying, contact your state’s tax or revenue office. Now it will again vary in terms of the applying and fees from state to state.
You have to keep it in your mind that there are some states that might require some additional licenses and permits in order to buy or sell some wholesale items. As an example if someone is willing to do business in Maryland, California or Illinois, he or she must need to apply for a wholesale permit since these states can not accept out of state resale certificates.
When you are buying items in wholesale at a wholesaler price, the price is usually lower so that you can sell them easily at a higher price to the retailer. And thus, you will be able to make more profit.
The more you purchase in bulk, the less you have to pay for the stuff to purchase from the wholesalers. And the less you can purchase quality products from your wholesalers, chances are there of selling them by making a great profit. And it is only possible to purchase in bulk at a lower price when you are a wholesale license holder.
To run your business in a legal way and maintain the laws and regulations you have to remain in compliance with the IRS. You will easily get this by simply maintaining the law and regulations of doing business.