To buy wholesale, you need three things at minimum: a registered business entity, a federal Employer Identification Number (EIN), and a state resale certificate. Those documents prove to suppliers that you are a legitimate commercial buyer authorized to purchase inventory without paying sales tax at the register. Most wholesalers want more than the minimum before they open an account, including a dedicated business bank account, a D-U-N-S Number, and proof of liability insurance. The exact mix depends on the supplier, the product, and whether you are buying domestically or importing.
The Three Documents You Can’t Buy Wholesale Without
A Registered Business Entity
Wholesale suppliers sell to businesses, not individuals. Before anything else, you need a legally recognized business structure: a sole proprietorship, a limited liability company (LLC), or a corporation. These are registered through your state’s Secretary of State office by filing formation documents and paying a registration fee. An LLC files articles of organization; a corporation files articles of incorporation.
Most wholesalers prefer to see an LLC or corporation rather than a sole proprietorship. These entities carry formal registration documents suppliers can verify, and a business that is not in good standing with its state will get flagged or denied during the application review.
Many cities and counties also require a general business operating license before you can legally conduct business in their jurisdiction. Fees range from under $50 to several hundred dollars annually, and the application typically asks for your entity type, business address, and a description of your operations. Check with your local clerk’s office before you place wholesale orders.
An Employer Identification Number
An EIN is a nine-digit number the IRS assigns to your business for tax reporting purposes. You will need it for almost everything in wholesale purchasing: opening a business bank account, applying for trade credit, filing tax returns, and completing supplier applications.1Internal Revenue Service. Employer Identification Number
Applying online through the IRS website is the fastest route. You will provide your entity type, legal name, and the Social Security number of the person responsible for the business.2Internal Revenue Service. Instructions for Form SS-4 If approved, you receive your EIN immediately on screen.3Internal Revenue Service. Get an Employer Identification Number The IRS later mails a formal confirmation called a CP 575 notice. Keep it; the IRS does not reissue it. If you lose the original, you will need to call the IRS business line to get a verification letter instead.
A State Resale Certificate
A resale certificate is the document that lets you buy inventory without paying sales tax at the time of purchase. The reasoning is simple: because you will resell the goods and collect sales tax from your customers, taxing the transaction twice would be double collection. The certificate tells the wholesaler to skip charging you tax on qualifying purchases.
To get one, you first need a seller’s permit (sometimes called a sales tax ID) from your state’s tax agency. The application usually requires your EIN, your business address, and a description of the products you plan to sell. Most states issue these permits for free or charge a nominal fee, though some require a refundable security deposit or surety bond. Once you have the permit, you fill out a resale certificate for each wholesaler you buy from.
A valid resale certificate generally includes your business name and address, your seller’s permit number, a description of the goods you are purchasing, a statement that the items are bought for resale, and your signature. Formats vary by state. Some states accept other states’ certificates; others require their own form.
One warning worth taking seriously: using a resale certificate to buy things for personal use is illegal. States treat it as tax evasion, and penalties include repayment of the tax plus fines that can reach several thousand dollars or more. Your seller’s permit can also be revoked, which shuts down your ability to buy wholesale at all.
What Wholesalers Ask for Beyond the Basics
A Business Bank Account
No federal law requires a separate business bank account, but operating without one creates problems quickly. Wholesalers expect to see payments from an account bearing your business name. Mixing personal and business funds also weakens the liability protection an LLC or corporation provides and makes tax time much harder.
To open one, most banks ask for your EIN, your formation documents, and a government-issued ID for the account signer. Some also want your operating agreement or corporate bylaws. Many banks offer small business accounts with low or no monthly fees.
A D-U-N-S Number
A D-U-N-S Number is a unique nine-digit identifier issued by Dun & Bradstreet that tracks your business credit profile. Many large wholesalers and manufacturers require one before they will open an account, because it lets them pull your company’s payment history and creditworthiness in seconds.4Dun & Bradstreet. Get a D-U-N-S Number
Requesting a D-U-N-S Number is free. You will provide your legal business name, address, owner information, industry, and employee count. Standard processing takes up to 30 business days, with expedited options available for a fee. A strong profile with consistent on-time payments gives you leverage to negotiate better terms with future suppliers.
Commercial Liability Insurance
Commercial general liability insurance is the piece new wholesale buyers most often overlook. Larger suppliers and manufacturers commonly require proof of coverage before they will ship product to you, and the standard threshold is $1,000,000 per occurrence with a $2,000,000 aggregate. Product liability coverage matters especially if you are reselling physical goods that could injure someone. Most small resellers pay between $400 and $1,500 per year for a basic policy, depending on industry, revenue, and inventory volume.
Filling Out a Wholesale Account Application
Once you have your entity documents, EIN, resale certificate, bank account, D-U-N-S Number, and insurance in place, you can apply for wholesale accounts. Most manufacturers and distributors host application forms in the “Dealer,” “Wholesale,” or “Trade” section of their website, often buried in the footer.
A typical application asks for:
- Business contact details: physical address, phone number, website, and a billing contact.
- EIN and resale certificate, uploaded as scanned documents or entered as reference numbers.
- D-U-N-S Number, used to pull your business credit profile.
- Estimated annual purchase volume, which determines your pricing tier. Lowballing puts you in a worse bracket; inflating damages trust.
- Two or three trade references from other suppliers who can confirm you pay on time.
- Shipping details: warehouse or store address, dock specifications, and whether you can receive palletized freight.
New businesses without trade references hit a familiar catch-22. The workaround is to start with smaller distributors or wholesale marketplaces that do not require references, build a six-to-twelve-month payment history, and then use those accounts as references when approaching larger manufacturers.
After you submit, expect a review period of a few days to two weeks. Some suppliers run a credit check during this window. Approval gets you login credentials for wholesale-only ordering portals with pricing substantially below retail.
Paying for Your Orders: Trade Credit and MAP Rules
Trade credit is how most wholesale relationships actually work day to day. Instead of paying upfront, you receive an invoice with “net” terms giving you a set number of days to pay. Net-30 means 30 days from the invoice date; net-60 means 60. Most vendors start new businesses on shorter terms like net-10 or net-15 and extend longer windows after you have demonstrated reliable payment. Net-60 and net-90 are generally reserved for established buyers with strong credit profiles.
Some suppliers offer early-payment discounts written as “2/10, net 30,” meaning a 2% discount if you pay within 10 days. On large orders, that adds up quickly. Missing deadlines, by contrast, can freeze your account, reduce your credit limit, or trigger negative reports to Dun & Bradstreet that follow your business for years.
Many brand-name manufacturers also require wholesale buyers to sign a Minimum Advertised Price (MAP) agreement before granting account access. A MAP policy sets the lowest price at which you can publicly advertise their products, though you are generally free to sell for less in-store or through private negotiations. MAP policies are legal, and the usual consequence of violating one is a warning, suspended shipments, or account termination rather than legal action.5Federal Trade Commission. Manufacturer-Imposed Requirements
Extra Requirements for Imported or Regulated Products
Importing From Overseas
Buying wholesale from overseas manufacturers adds federal compliance that domestic purchasing does not require. Before your first shipment clears U.S. Customs, you need to register as an importer of record by filing CBP Form 5106 with U.S. Customs and Border Protection.6U.S. Customs and Border Protection. Create/Update Importer Identity Form (CBP Form 5106)
You will also need a customs bond, which guarantees to CBP that all duties, taxes, and fees on your imports will be paid. A single-entry bond covers one shipment; a continuous bond covers all shipments for 12 months and is far more practical if you import regularly. The minimum amount for a continuous bond is $50,000, or 10% of the duties and fees paid in the prior year, whichever is greater.7U.S. Customs and Border Protection. Bonds – How to Obtain a Customs Bond You purchase the bond through a licensed surety company, not directly from CBP.
Every product entering the U.S. must be classified under the Harmonized Tariff Schedule, which determines the duty rate.8U.S. International Trade Commission. Harmonized Tariff Schedule Getting the classification wrong can result in overpaying, underpaying and facing penalties later, or having your shipment detained. Many importers hire a licensed customs broker for classification and clearance, especially on their first few shipments.
Food, Children’s Goods, and Other Regulated Categories
Any facility that manufactures, processes, packs, or holds food for human or animal consumption in the United States must register with the FDA.9Office of the Law Revision Counsel. 21 USC 350d – Registration of Food Facilities If you warehouse food before resale, your storage location counts. Registration goes through the FDA’s online portal and must be renewed every two years during the October-to-December window.10U.S. Food and Drug Administration. Registration and Listing
If you import or manufacture products designed for children 12 and under, every item must comply with Consumer Product Safety Commission safety rules and ship with a Children’s Product Certificate. Third-party testing at a CPSC-accepted laboratory is required for lead in paint, small parts hazards, and certain durable infant products. Small batch manufacturers with gross revenue under roughly $1.4 million and fewer than 7,500 units of the same product may qualify for alternative testing methods on some requirements, but they are not exempt from compliance.11Consumer Product Safety Commission. Small Batch
Other regulated categories include alcohol, tobacco, firearms, pharmaceuticals, and certain chemicals, each with its own federal licensing and often state licensing as well. Research the specific rules for your product category before signing any wholesale agreement.
Tax and Zoning Obligations That Come With Inventory
Sales Tax in Multiple States
If you sell to customers in multiple states, you may owe sales tax in states where you have never set foot. The Supreme Court’s 2018 decision in South Dakota v. Wayfair established that states can require remote sellers to collect sales tax once their sales into that state cross certain thresholds, even without a physical presence there.12Supreme Court of the United States. South Dakota v. Wayfair, Inc.
The most common trigger is $100,000 in annual sales into a given state, though some states set the bar at $250,000 or $500,000, and some use a transaction count of 200 separate sales. Once you cross either threshold, you must register for a seller’s permit in that state, collect tax from customers there, and remit it on the state’s filing schedule. This applies to your retail sales to end customers, not to your wholesale purchases.
Cost of Goods Sold
Buying inventory in bulk creates tax obligations that differ from ordinary business expenses. You cannot simply deduct the full cost of inventory you purchased this year. Instead, you deduct the cost of goods actually sold during the tax year: beginning inventory, plus purchases made during the year, minus ending inventory.13Internal Revenue Service. Instructions for Schedule C That calculation requires accurate inventory counts at the start and end of every tax year, and the IRS generally requires businesses that produce, purchase, or sell merchandise to use an accrual method for purchases and sales unless they qualify as a small business taxpayer.14Internal Revenue Service. Publication 538 – Accounting Periods and Methods If this feels over your head, hiring a bookkeeper or accountant pays for itself quickly.
Where You Store the Inventory
Wholesale buying means storing bulk inventory somewhere, and where you store it matters legally. If you plan to run your business from home, check your local zoning ordinances before pallets start arriving. Most residential zones allow home-based businesses only as a secondary use of the property, with common restrictions on commercial signage, customer traffic, and the volume of goods stored on the premises.
Many zoning codes specifically prohibit retail sales of stock from a residential property or cap the inventory you can keep there. Violations can bring fines, forced closure of the home business, or both. If your operation outgrows what your zoning allows, you will need a variance, a conditional use permit, or a move to a commercially zoned space. Answer the zoning question before you commit to your first large wholesale order, not after a neighbor files a complaint.