If you want to learn how to become a wholesaler and how to run a wholesale business, there is a lot to get acquainted with. First, you need to understand the wholesale definition and how to run a wholesale distribution business so you’re familiar with the industry as a whole. Next, you should learn how to buy wholesale and research wholesale items to sell.
Then, once you know how to find wholesalers and have identified a wholesale directory or two, you’ll be nearly ready. When you have buying and selling opportunities figured out, it’s time to get documentation like a wholesale license. But how to get a wholesale license?
Getting a wholesale license is generally a simple procedure. You’ll need personal information, business information, some funding, and a little bit of patience. Let’s look at what a wholesale license (sometimes called a wholesale permit) is, how to get one, and what to expect in the process.
Wholesale Dealer License: What Is a Wholesale License?
A wholesale license is a business document that allows you to legally buy from manufacturers in bulk and resell the goods. It signals to the government, material suppliers, and retailers that you’re a lawful dealer of goods.
A resale certificate (often issued with or as part of a seller’s permit) lets you buy goods for resale without paying sales tax on them; instead, sales tax is collected when the goods are eventually sold to the end customer. A seller’s permit also authorizes you to collect sales tax on taxable sales you make. Wholesale licensing is part of how states track B2B sales, whether they happen in person or through a B2B online marketplace.
Starting a wholesale business requires a lot of forethought, including what wholesale price you'll sell at. The product(s) you sell will determine the wholesale license you’ll need. For example, businesses that sell produce, wine, and beer are subject to regulations that other businesses are not. Consult your state’s tax or business revenue office for details.
Wholesale License vs Seller's Permit
In most cases, a seller’s permit and wholesale license are the same document going by two different names. Sometimes, a state may have been calling it a seller’s permit longer, or perhaps a state’s legislature thinks of it differently. Understanding any differences between wholesale licenses vs. sellers’ permits where you live is crucial.
For example, a wholesale license in your state could be different from a reseller’s permit. In some cases, a reseller’s permit is required for wholesalers to sell to retailers.
It all depends on the laws in your state and what wholesalers are expected to adhere to. No matter your situation, you are obtaining the correct licensure if you’re getting it through your state’s tax office.
Wholesale License Cost: How Much Is a Wholesale License?
In most states, a seller’s permit or resale certificate is free or costs a small registration fee. The bigger costs come from other requirements: business registration with your state, local business licenses, and — for regulated products like alcohol, tobacco, or food — industry-specific licenses that can cost considerably more. Check with your state’s department of revenue for exact fees.
Getting a Wholesale License: How to Get a Wholesale License?
When it’s time to get your wholesale license, the process is pretty straightforward. There are some fees and waiting times involved, so plan your business activities accordingly.
The first step is acquiring your employer identification number (EIN). An EIN is also called a federal tax identification number (FTIN). The government uses your EIN to track all legal business activities and allow business owners to hire employees.
You don’t have to hire employees, but the EIN is still necessary for making wholesale sales. Your EIN ties all transactions to your business, which simplifies taxes and record-keeping.
If you apply online through the IRS, you’ll usually receive your EIN immediately; applications by mail or fax take longer. You’ll need it to open business bank accounts, hire employees, and complete most wholesale applications, so get it early.
The second step is getting your sales tax ID. Though it may seem redundant, this is the document that allows you to collect sales tax on your products. It also simplifies the work you and your state’s tax agency have to complete each year. Each state has different tax laws, so familiarize yourself with what the government expects of your business.
The third step is applying for a wholesale license. Contact your state’s tax or revenue office to acquire the relevant paperwork. This process may look different from state to state, including information required from you and standard waiting times.
To get a wholesale license, you’ll need business information, including:
- Your full name, and the full names of any business partners
- Your EIN
- Your DBA (doing business as; the public-facing title of your business)
- The nature of your business
- Your business address and legal structure (sole proprietorship, LLC, corporation)
When your application is submitted, the hard part is over and waiting begins. Some wholesale licenses are approved in as few as two to five business days; others take as long as two weeks.
Once you’re notified that your application was approved, you’ve obtained your wholesale license! Make a copy of it so you have it ready for tax and reference purposes.
One of the main benefits of getting registered is that you can buy inventory for resale without paying sales tax on it, which lowers your upfront costs.
Where to Apply: Wholesale License Names by State
There’s no single national wholesale license. Each state handles sales tax registration through its own revenue agency, and the document goes by different names. A few examples:
- California: a seller’s permit from the California Department of Tax and Fee Administration (CDTFA). The permit is free, and you give suppliers a resale certificate (Form CDTFA-230) that includes your permit number.
- Texas: a sales and use tax permit from the Texas Comptroller of Public Accounts, also free. Buyers give suppliers Form 01-339, the Texas Sales and Use Tax Resale Certificate.
- New York: a Certificate of Authority from the Department of Taxation and Finance, which you need before making taxable sales.
- Florida: a sales tax Certificate of Registration from the Florida Department of Revenue, plus an Annual Resale Certificate that’s reissued each calendar year.
- Illinois: registration with the Illinois Department of Revenue; buyers give suppliers Form CRT-61, the Certificate of Resale.
- Pennsylvania: a sales tax license from the Pennsylvania Department of Revenue.
- States without a statewide sales tax — Oregon, Delaware, Montana, New Hampshire, and Alaska — don’t issue a state seller’s permit, though Alaska has local sales taxes and you may still need other business licenses.
Some states, including California and Texas, may ask certain businesses for a security deposit or bond even though the permit itself is free.
To find your state’s version, search for “[your state] sales tax registration” and make sure the result is on an official .gov site. Third-party filing services often charge for the same free application.
How to Use a Resale Certificate
Once you’re registered, a resale certificate is what lets you buy inventory tax-free:
- Give one to each supplier. Most suppliers keep your certificate on file and stop charging sales tax on qualifying purchases. Some states allow a blanket certificate that covers all future purchases from the same supplier.
- Only use it for goods you’ll resell. Inventory qualifies; things your business uses itself — office supplies, cleaning products, equipment — generally don’t. Misusing a resale certificate can mean back taxes, interest, and penalties.
- Buying across state lines. Many suppliers accept multistate forms, such as the Multistate Tax Commission’s Uniform Sales & Use Tax Certificate or the Streamlined Sales Tax certificate, but not every state accepts them. Check the rules for the state involved.
- Keep records. Keep copies of certificates you issue and receive, and update them when your business details change. Some certificates expire — Florida’s, for example, is reissued every year.
- When you’re the seller. If you sell to other businesses for resale, collect their resale certificates. If you can’t produce a valid certificate in an audit, you may owe the tax you didn’t collect.
Wholesale License vs. Business License vs. Resale Certificate
People often say “wholesale license” to mean several different documents. Here’s how they compare:
Other Things Needed to Become a Successful Wholesaler
Getting a wholesale license is not the only thing needed to become a successful distributor. Like every other business, there are multiple other factors that contribute to the prosperity or failure of a company. Let’s see what else is needed to run a profitable wholesale business.
- Properly research the niche you operate in. As innovations constantly hit the market, wholesalers need to stay on track with the trends in their field. Whether you’re a supplier who sells household products or a dairy distributor, make sure you constantly research the market and adapt to the demand.
- Invest in relationships with customers. In the B2B field, relationships are an important key to success. Make sure you understand the struggles of your customers and aim to solve their problems as much as you can. Winning the loyalty of clients can be the difference between prosperity and failure.
- Be creative with prices. Don’t be afraid to offer discounts, especially for products that take up a lot of storage space or have a short shelf life. Sometimes selling products with minimum profit or even at a small loss can be better compared to waiting a long time to sell them or if they turn into idle stock. On the other hand, make sure you benefit from things like supply chain disruptions or other economic turmoil. At times when the supply is limited and the demand grows, a wholesale business can maximize profits.
- Expand your products and audience. Focusing on just one category of products can cause problems for businesses in the wholesale sector. It is recommended that these companies add new products to their catalogs and expand their target audience. As that often leads to an increase in operating work and costs, it should be combined with automation of tasks and processes.
Common Mistakes When Getting a Wholesale License
- Paying for a free registration. Many third-party sites charge to file applications that states process for free.
- Using a resale certificate for business supplies. It only covers goods you’ll resell.
- Skipping local licenses. A state seller’s permit doesn’t replace city or county business licenses.
- Not filing in slow periods. Many states require sales tax returns even when you had no sales.
- Forgetting industry licenses. Food, alcohol, and other regulated products need separate permits — covered in the next section.
- Letting registrations lapse. Renewal rules vary; FDA food facility registrations, for example, must be renewed every two years.
Licenses and Permits for Food and Beverage Wholesalers
If you plan to sell food or beverages wholesale, a seller’s permit is only the starting point. Food and drink are regulated products, and most food wholesalers need several additional registrations. Requirements depend on what you sell and where, but these are the most common:
- FDA food facility registration. Facilities that manufacture, process, pack, or hold food for consumption in the US — including distribution warehouses — generally must register with the FDA before they begin operating. Registration is free and must be renewed every two years, between October 1 and December 31 of each even-numbered year.
- State and local food permits. Most states require a food warehouse, food distributor, or food establishment license, along with health department inspections of your storage facility.
- Alcohol licenses. Anyone in the business of buying alcohol for resale at wholesale must first get a basic permit from the Alcohol and Tobacco Tax and Trade Bureau (TTB) — approved before you start doing business — plus a state wholesale license. Under the three-tier system, wholesalers sit between producers and retailers, and states regulate that relationship closely.
- PACA license for produce. Businesses that buy or sell more than 2,000 pounds of fresh or frozen fruits and vegetables in any given day generally need a license from USDA under the Perishable Agricultural Commodities Act.
- Meat and poultry. Processing meat or poultry requires USDA inspection, and meat and poultry wholesalers, brokers, and warehouses must register with USDA’s Food Safety and Inspection Service (FSIS).
Beyond licensing, food wholesalers need storage and delivery that keep product at safe temperatures, and records that allow products to be traced if there’s a recall. Requirements change, so confirm the specifics with your state agriculture or health department before you start buying inventory.
Once you’re licensed, the next step is making it easy for restaurants and retailers to buy from you. Book a distributor demo to see how BlueCart handles ordering, pricing, and invoicing for food distributors.
Frequently Asked Questions About How to Get a Wholesale License
Getting your wholesale license is a pivotal part of launching a wholesale business. If you’re serious about making this decision, you probably have more questions. Check out these commonly asked questions and our answers below:
Can I buy wholesale with a seller permit?
It depends on what kind of licensing is required where you do business, and also the type of business you run. In most cases, a wholesale license is a seller’s permit, but check with your state’s tax or revenue office to be sure.
A wholesale license is required in order to purchase wholesale goods and resell them. Review the wholesale business requirements on your state’s website to see if any other licensure is needed, such as a retail license or eCommerce business license.
How do you qualify to buy wholesale?
Most wholesalers will ask for a resale certificate, business registration, and tax ID before opening an account. You’ll usually provide these when you first contact a supplier.
Once the above paperwork is completed, you can browse a wholesale directory and find products to purchase. It may include wholesale meat, wholesale seafood, wholesale produce, or other high demand products. Once you’ve found the wholesale items you want to buy, you can sell the items to a distributor, retail store, or consumers.
Can anyone buy from a wholesaler?
Any consumer can purchase from a licensed wholesaler who sells to the public. Consumers who are interested in wholesale products have to contact the wholesaler directly, rather than finding their products in a retail store or a marketplace.
Only a fraction of wholesalers sell goods to the public, which is for several reasons. One, wholesaling is usually done by selling in bulk, because wholesale vendors usually have to buy in bulk. Two, selling smaller quantities for consumers requires a different marketing approach, which not every wholesaler is interested in.
Wholesalers who sell direct to consumers are out there, but it requires some research and consistency in following up with them. You may also need to visit a factory or warehouse yourself, which is a time investment not every consumer wants to make.
Does the process of obtaining a wholesale license vary based on state?
Yes. Each state sets its own requirements, forms, fees, and processing times, and some states use different names for the same document. Start with your state’s department of revenue.
Can You Sell Wholesale without a Wholesale License?
In most states, you’ll need a seller’s permit to make taxable sales and a resale certificate to buy inventory tax-free. Requirements vary by state and product, so check before your first sale. Selling without the required registration can lead to back taxes, fines, and other penalties.
How Long Does It Take to Get a Wholesale License?
The approval time to get your wholesale license can vary depending on the state. Generally speaking, it shouldn’t take more than a few weeks. In some states, a business can get its wholesaler license in a day or two. You may wonder how to get a wholesale license as fast as possible. The answer is to have all your other documents and requirements prepared and in order. Keep in mind that some states require periodic renewal, while others issue permits that remain valid as long as the business is active.
What Is a Reseller Permit?
A reseller permit is also called a resale license or resale certificate. It’s a state-issue document that allows businesses to purchase goods from manufacturers or wholesalers without paying sales tax. These products are non-taxable only if they are resold to other customers. A reseller permit is suitable for retailers that purchase products in bulk and resell them at retail prices. This certificate effectively makes them the tax collector as they are responsible for collecting the sales tax from end customers. Even businesses that operate solely online should get a reseller permit. A resale license is issued by the Department of Revenue or another tax authority in the state.
Licensed to Sell
Getting your wholesale license is a major milestone in launching your direct to consumer (see D2C meaning) or B2B business, much like selecting your B2B eCommerce platform. With the right paperwork in place, you’re approved to buy in bulk.
Continue researching what goes into a successful wholesale venture to keep your business profitable, like wholesale marketing strategies.