To get a wholesale contract, you assemble three core documents — a federal Employer Identification Number, a state or local business license, and a resale certificate — submit them with a wholesaler’s application that doubles as a credit check, and sign a master agreement that sets your payment terms, order minimums, and liability. The paperwork is the easy part. The agreement itself is where new buyers get caught, because it quietly commits you to minimum purchases, personal liability, and resale rules you may not have planned for. Start to finish, expect anywhere from a few days to a couple of weeks.
Documents to Have Ready Before You Apply
Wholesalers won’t open a file on you without proof that your business is real, registered, and legally allowed to buy for resale. Having all three documents in hand before you reach out saves weeks of back-and-forth.
Federal Employer Identification Number
Your EIN is a nine-digit tax ID from the IRS. The online application takes about 15 minutes, costs nothing, and issues the number immediately once you’ve identified your entity type and provided the Social Security number of the person who controls the business.1Internal Revenue Service. Get an Employer Identification Number Every wholesaler asks for this number on the application. It’s how they report transactions to the IRS and how their credit team starts evaluating you.
State or Local Business License
A business license proves you’re legally authorized to operate. Depending on where you are, it’s issued by a city clerk, a county office, or a state agency, and fees range from a nominal filing charge to several hundred dollars a year. One detail matters more than people expect: the business name and address on this license must match your other documents exactly. Distributors reject applications over mismatches that look like clerical errors.
Resale Certificate
The resale certificate is what makes the whole arrangement tax-efficient. It tells the wholesaler you’re buying goods to resell, so they don’t charge you sales tax on the purchase. You collect the tax from your end customer instead. To get one, you first obtain a sales tax permit from your state’s department of revenue, then complete the state’s exemption form, which lists your permit number, a description of what you buy for resale, and an authorized signature.
Wholesalers keep these certificates on file and produce them during tax audits as proof they had a legitimate reason not to collect sales tax. If yours is missing, expired, or incomplete, the wholesaler is legally required to charge you the full sales tax, which runs from roughly 4% to over 10% depending on your state and local rates. Some states require blanket resale certificates to be renewed every few years, so track your expiration dates and send fresh copies to each supplier.
How Wholesalers Judge Your Creditworthiness
Documentation gets you through the door. Credit decides how much you can actually buy and on what terms.
D-U-N-S Number and PAYDEX Score
A D-U-N-S Number is a unique nine-digit identifier assigned by Dun & Bradstreet. It isn’t legally required, but many larger distributors ask for one because it links to your business credit file.2Dun & Bradstreet. Get a D-U-N-S Number The attached PAYDEX score measures how promptly you pay business obligations, and suppliers check it before extending credit.3Dun & Bradstreet. Business Credit Scores and Ratings You can request the number for free, but building a meaningful score takes time and real payment history.
Trade References
Most applications ask for two or three trade references — other suppliers where you already hold an open account. You’ll give the company name, a contact, a phone number, and how long the account has been active. The credit team calls or emails each one to confirm you pay on time and in what amounts. If your business is brand new and you don’t have trade references yet, expect less favorable terms at the start: prepayment, shorter credit windows, or lower order limits until you build a record.
What the Wholesale Agreement Actually Commits You To
The agreement is a binding contract that fixes how much you buy, when you pay, who bears the risk in transit, and what happens if something arrives damaged. Reading it closely before signing is where experienced buyers separate themselves from everyone else.
Minimum Order Quantities and Tiered Pricing
Nearly every contract sets a minimum order quantity, expressed as a dollar amount or a unit count, so the wholesaler isn’t processing orders too small to be worth their logistics. Many contracts also tier the pricing: higher volumes get lower per-unit costs. Understand those tiers before you sign. Committing to a higher tier you can’t sustain locks you into obligations you may not be able to meet.
Payment Terms and Early-Payment Discounts
Payment terms set how long you have to pay after receiving goods. New accounts usually start at Net 15 or Net 30. Established buyers with strong histories negotiate Net 60 or Net 90.
Many wholesalers offer early-payment discounts. The most common is “2/10 Net 30,” meaning a 2% discount if you pay within 10 days, with the full invoice otherwise due in 30. On a $50,000 order, that’s $1,000 saved for paying 20 days early. Over a year, these add up fast, and they belong in your cash flow planning before you agree to terms.
Shipping Terms and Risk of Loss
The shipping clause decides who owns the goods in transit and who absorbs the loss if a shipment is damaged. Under the Uniform Commercial Code, which governs sales of goods in the U.S., risk passes to the buyer when the goods are handed off to the carrier if the contract doesn’t require delivery to a specific destination. If it does require delivery to a destination, the seller bears the risk until the goods arrive and are tendered.4Legal Information Institute. UCC 2-509 Risk of Loss in the Absence of Breach
In everyday wholesale language, these are “FOB Shipping Point” and “FOB Destination.” Under FOB Shipping Point, you need cargo insurance from the moment the goods leave the seller’s warehouse. Under FOB Destination, the seller carries that risk. One line in the contract can determine who eats a five-figure loss when a truck is damaged in transit.
Warranties and Defective Goods
Wholesale contracts for goods come with implied UCC warranties unless the contract explicitly disclaims them. The most important is the warranty of merchantability: the goods must be fit for their ordinary use. If 500 units arrive defective, that warranty is your legal basis for a return or credit. Most contracts also spell out the return mechanics, usually requiring you to request a return authorization within a set window, ship the goods back at your expense, and accept replacement or credit rather than a cash refund. Restocking fees of 10% to 25% are common for non-defect returns. Some agreements limit your return window to as few as 10 days after delivery, so check that number before you sign.
Insurance Requirements
Larger wholesalers require proof of commercial general liability insurance before they activate your account. The typical minimum is $1,000,000 per occurrence and $2,000,000 aggregate. Some contracts also require you to name the wholesaler as an additional insured, which extends your coverage to claims arising from products they supplied. If you don’t already carry a policy, build in the cost. Coverage for small retailers runs from a few hundred to a few thousand dollars a year depending on industry and revenue.
The Personal Guarantee Clause
This is the clause that catches the most owners. Many wholesale credit applications bury personal guarantee language in the fine print. Signing a personal guarantee makes you individually liable for your company’s debts to that wholesaler, even if your business is an LLC or corporation that would otherwise protect your personal assets.5NCUA. Personal Guarantees
The most aggressive version is an unlimited, joint and several guarantee. “Unlimited” means you’re on the hook for the entire balance owed, past, present, and future. “Joint and several” means that if multiple owners signed, the wholesaler can pursue any one of them for the full amount instead of splitting it proportionally.5NCUA. Personal Guarantees Some distributors will cap the guarantee at a specific dollar amount if you ask. Others will accept a collection guarantee instead of a payment guarantee, meaning they must exhaust collection against the business before coming after you. Either way, know what you’re signing. Owners rush the credit application to get the account open and don’t discover they’ve personally guaranteed every future invoice until something goes wrong.
Restrictions on How You Resell
Wholesale contracts don’t only govern what you buy. They often control how you resell. Two restrictions come up again and again.
Minimum Advertised Price Policies
A Minimum Advertised Price policy sets a floor on the price you can use in advertising, including your website, marketplace listings, print ads, and social media. You can still sell below that price in-store or at checkout, but your advertised price cannot. Under federal antitrust law, a manufacturer acting on its own has broad authority to set these policies and to stop doing business with retailers who violate them.6Federal Trade Commission. Manufacturer-imposed Requirements Repeat violations end wholesale relationships.
Territory and Channel Restrictions
Some agreements restrict where or through which channels you can sell. A manufacturer might assign an exclusive territory, prohibit sales on certain online marketplaces, or require you to focus within a geographic region. These restrictions are generally lawful when imposed by the manufacturer alone. They become an antitrust problem when competing dealers coordinate with each other to pressure a manufacturer into restricting a discount competitor.6Federal Trade Commission. Manufacturer-imposed Requirements Before signing, check whether the contract limits the channels you actually plan to use, especially if you lean on e-commerce.
Submitting the Application
Most modern wholesalers run B2B vendor portals. You create an account, upload PDF copies of your EIN confirmation letter, resale certificate, business license, and insurance certificate, and fill out the application fields directly. Some traditional distributors still prefer mailed applications; if you go that route, use a trackable shipping method and include original signatures where required.
The final step on digital applications is an electronic signature on the master agreement, usually sent through a platform like DocuSign. After you sign, the platform generates a confirmation. Save it. That’s your proof of submission and the reference number for any follow-up.
Review, Approval, and Your First Order
After submission, the wholesaler’s credit and compliance teams take over. The review runs anywhere from a few business days to about two weeks, depending on the size of the distributor and the credit line you’ve asked for.
During that window, the credit department contacts your trade references, pulls your business credit report, and verifies that your resale certificate and business license are current. For larger credit lines, they may also run a personal credit check on the owner, especially where a personal guarantee was signed. You’ll get automated updates or calls from an account manager if anything needs clarification. Respond fast. Delays on your end push the application into an inactive queue.
Once approved, the wholesaler activates your account. You get login credentials for the ordering portal, access to wholesale pricing and real-time inventory, and confirmation of your initial credit limit and payment terms. New accounts with limited credit history typically start at Net 15 or Net 30 with a conservative limit. Over the first six to twelve months, as your payment track record grows, you can request longer terms and higher limits. Your first order has to meet the minimum set in the contract, and most wholesalers recommend keeping that first order on the smaller side so you can test the logistics before scaling up.