retail business gets wholesale inquiries

barbroberts · #1 07-20-2007, 05:31 PM

I have one site hosted by VH and am in the process of moving another. On this second site we sell tea and tea party accessories. We purchase most of our products, using dropshippers for only a few items.

Nearly every week we get wholesale inquiries from other businesses. I simply gave our wholesellers' information to a museum in New York. Another business placed a nice order with the promise of more but never called back. (They didn't need to, our suppliers info was attached via a tag to each piece they bought, which I plan to remove in the future) I have several still waiting on a response from me.

When I buy wholesale, the company requires my resellers license number. I am assuming that they are governed by some kind of rules. We see lots of web sites with a link to "Wholesale Inquiries". I see potential income going down the drain when I say no.

1) What does it take to call yourself a wholeseller?
2) If we should offer discounts to businesses, do we need to disclose that we are not 'wholesellers' or does that automatically make us one?

I want to do the ethical thing but we have worked hard to get where we are and it pains me to not be able to capitalize on this market.

Collectors-info · #2 07-20-2007, 06:08 PM

Catch 22 these days with this type of thing. I can only go by the UK, but I would of thought a lot of things are similar.
I personally would get more potential customers incentive to purchase with you and possibly form of co-operative/group buyers to give you more clout with the main wholesalers & better buying power.
The main wholesaler would much rather deal with one person than multiple small accounts.

Vasili · #3 07-20-2007, 08:14 PM

Quote:

Originally Posted by barbroberts

When I buy wholesale, the company requires my resellers license number. I am assuming that they are governed by some kind of rules. We see lots of web sites with a link to "Wholesale Inquiries". I see potential income going down the drain when I say no.

1) What does it take to call yourself a wholeseller?
2) If we should offer discounts to businesses, do we need to disclose that we are not 'wholesellers' or does that automatically make us one?

I want to do the ethical thing.

Since you are in the US, your are subject to Federal, State, and local business law and regulations (all Commerce in the US must comply with the Commercial Code).

I am reading that you do not yet have a "Sellers Permit".....if this is in fact correct, this refers to a Permit issued loacally on behalf of the State for you to sell to the public and collect Sales Tax to then properly reimburse the State on a regular basis. Often confused with a "Retail Permit" it is just a matter of words really, as the main issue is Sales Tax and your responsibility to collect and reimburse according to the rate prescribed in your locale.

You can file with your local Board of Equalization (or Department of Revenue, depending on how Kentucky calls it) for a Resale Permit.
Keep in mind though, that you need to file according to the type of business you are (or intend to be), such as Sole Proprietor, Corporation, or other entity. At the time of filing, you will need to declare your SIC (Standard Industry Code) which states the specific type of business you are: agriculture, food service, etc. AND the designation of either Retail or Wholesale --- you can't be both. If Wholesale, you will still need to file regularly with the State to absolve you from tax liability. Also if Wholesale, you are prohibited from "blending" transactions entirely, so in fact, you may wish to look into creating your business accordingly and maintaining separate Permits.

PRIOR to filing for the Resale Certificate, you will need to file with your County Clerk either a Ficticious Name Statement or Filing of Business, and then properly place Public Notice (usually you are required to run in ad in the classifieds for these notices providing the paper has a minimum circulation).

When it comes to the "standard practice" you mentioned above, where vendors were inquiring about your Sellers Permit.....yes there are many regulations that all businesses need to comply with as long as they exist. For instance, like here, B2B or wholesale sales must have a signed affidavant from the buyers stating that they do in fact not onloy hold a Resale Certificate, but that the SIC is of the proper type: can't allow a **** company to buy electrical equipment, for example.

On top of that, OSHA requires you to have a Safety and Materials Compliance Program on file which is updated annually with a assigned Compliance Officer (even if you have no employees or do not occupy a commercial address), and since 2003 every business is mandated to also have a Privacy and Information Program (and compliance designate) per the Patriot Act.

Being "in business" itself is a process, so carefully evaluate how your Business Plan is structured to provide optimal profitability, longevity, and successful growth as it maintains compliancy with US Laws.

Good Luck!

Vasili · #4 07-20-2007, 08:48 PM

PS (sorry, got timed out ..... stupid broadband!)

When it comes to wholesale vs. retail on your website?
I see no problem having a link to a completely separate website (wholesale and retail), with distinctly obvious pricing and "programs"......the 'clone' function in Blue Voda makes this very easy to do, and if you examine many other businesses, you will notice this practice is commonplace, even so far as having different colors between the sites!

If you simply wish to maintain your Retail site and optmize your wholesale trade, be sure to develop a Wholsale Page that fully describes your opportunity, and include a detailed Contact Form to elicit those inquiries.

barbroberts · #5 07-20-2007, 09:05 PM

Thank you for your comments but I am afraid left my questions open to misintepretation. We have been in business for four years. We have a business plan as well the proper licensing and follow all known rules and regs.

You did bring up a good point Vasili:

Quote:

If Wholesale, you will still need to file regularly with the State to absolve you from tax liability.

Not a problem at this point no matter how we sell (retail or wholesale) unless the customer is here in KY where tax must be charged on both the product and the shipping. In the case of wholeselling to a KY customer this would open up a whole new set of question. I'll get my Finance Manager to look at this aspect. (shouldn't be a problem since I'm married to him!)

Before offering "wholesale prices" we would need some verification that the customer was in fact a licensed reseller.

Chris:

Quote:

I personally would get more potential customers incentive to purchase with you and possibly form of co-operative/group buyers to give you more clout with the main wholesalers & better buying power.
The main wholesaler would much rather deal with one person than multiple small accounts.

Co-op buying--I hadn't considered doing that in my business! I know that some of our small local hardware stores buy that way. I am not aware if my suppliers offer discounts for larger orders---just know that larger orders help lower shipping costs. We will inquire!

I would appreciate the following info if anyone here knows:

1) What does it take to call yourself a wholeseller?
2) If we should offer discounts to businesses, do we need to disclose that we are not 'wholesellers' or does that automatically make us one?

Vasili · #6 07-20-2007, 09:16 PM

Quote:

Originally Posted by barbroberts

1) What does it take to call yourself a wholeseller?
2) If we should offer discounts to businesses, do we need to disclose that we are not 'wholesellers' or does that automatically make us one?

1. Proper filing of SIC (and declaring "Wholesale To The Trade" infers you in fact are discriminate, and verify all accounts)
2. Your offer of discounts to businesses does not conflict with nor interfere with your designation of being Retail or Wholesale: what policies you transact by are your business (similar to offering a "professional discount" that you may find to fellow Chamber members, for instance, or as may be possible as "volume discounts" etc.). Offering discounts or special offers does not automatically mean you are a wholesaler, however, as defined by #1 above.

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