Chances are, if you are starting your own business online you want to do it legally. The information in todays blog is geared towards the united states, but will work generally anywhere in the world. Just ask the wholesaler what they need from you, to do business with them. You will need this information in order to buy from real wholesale distributors. There are so many advantages to having legal documents to run your business. You can write off all expenses to your business on your taxes. You will have a business name to go by, which is a lot more professional than using just your name.
You can acquire your business license at your local city hall. If you are a home business,chances are, you are the only one who will be working for your business. For that reason, I would recommend an LLC or sole proprietorship business license. These licenses are perfect for small home business because they are geared for a 1 person business. Your city hall will be able to give you your new license on the spot. The price may vary depending on your area. Generally they cost $25-$100 dollars.
You should do some research to see if LLC or sole proprietor license will be better for you. They both have goods and bad. But you need one of them to buy from a real wholesale distributor. Anyone who tells you they are a wholesale distributor and does not ask for this information, is not a real wholesaler. Don’t be fooled by middlemen.
You will also need the tax ids to do business with wholesalers. You will need a federal tax ID (also known as EIN number). You can get your EIN at www.irs.com for free. Just fill out the application with all your business information. After you are done hit send. The application is accepted right away. On the following page you will be able to see your temporary EIN certificate. Print it up and keep it for your records. This is the same number that will be on your permanent EIN certificate. The IRS will mail your permanent EIN number to you. Once you print your temporary EIN certificate, your EIN is live. You can begin using your EIN number right away.
For most states you will need state tax id numbers. Especially if you are doing business across state lines or out of the country. You’ll know if you need state tax numbers if your state says you need them to do business.. If your state requires state tax numbers to do business, find out what ones you will need. You can find out what state tax numbers you will need by asking your wholesaler also. You wholesaler will probably require that you have a resale and use and sales tax numbers. This will give you permission to resell goods across state or country lines.
Your wholesale distributor may ask for more information than you have. They may ask you to fill out an application to use their service. They may even ask you to fill out some forms. Its very common for a wholesale distributor to have you fill out extra documents specific to their business.
Just go to your state website and acquire the tax id numbers you need. For instance if you live in Massachusetts, you would go to www.mass.gov to get your tax ids. It’s totally free to get your state tax numbers online. Just follow through the application and send. Print up your temporary tax certificate and wait for your permanent tax certificate to be mailed to you. Your temporary tax number will be the same as your permanent number. Your state tax numbers will be live as soon as you get your temporary certificate. Now you are legal and can buy from any wholesale distributor for your home business.
Things to keep in mind. If a wholesale distributor charges monthly membership fees for their service they are not a real wholesale distributor. Don’t be scammed by middlemen saying they are wholesale distributors. Do your research before signing up with anyone. You could even call the manufacturer to see if they are really a wholesale distributor. If something seems to good to be true, it probably is.
Some people might tell you not to get business credentials. They may say if you are starting off you don’t need them. This is a myth. If you want to make money and stay in business you need this information. Otherwise you will be forced to buy from high priced middlemen. Even if you are not going to use your business credentials right away. It’s always good to have them for when you will need them. Try and buy small bulk from wholesalers. Try and drop ship all the large stuff so you don’t have to deal with the hassle.