When selling online, to make the most profit per sale, you need to source products at real wholesale prices.  A real wholesaler and dropshipper will only work with retailers.  That means that you must be established as a legitimate, legal business before they will set up an account for you.

Getting Legal

A wholesale supplier needs  a Sales Tax ID for each Account they open.  It's so they can show the Government why they did not collect sales tax on the products they sold you.

You must you must be a legally established business to obtain a Sales Tax ID. So first you have to register a business name and establish the type of business you want to be. Then register with your state to get your sales tax ID. Go here for more information about Getting Legal.

TIP: If a wholesaler tells you that they don't require a Sales Tax ID to set up an account for you, they are probably not a true, factory-authorized wholesaler.  Search engine queries often lead you to middlemen.  Paid middlemen adverts in the search engines often lead you to 'pretend' wholesalers.  They buy from the REAL wholesalers.  They mark up the wholesaler's price and take away your ability to make sufficient profit.

Home Business is Still Business

Many prospective online sellers try to avoid doing the  'legal paperwork.'  However it is so easy and inexpensive these days.  Don't let a few sign-ups prevent you from earning suitable margins in your online business by allowing you to work with real wholesalers.

So even though you get legal & register a business name and get a sales and use tax ID, do you still have to tell your supplier you are selling online?

"A resounding yes." says Tisha Hedges, Director of Operations for WorldwideBrands.com "There are so many brand & platform restrictions, that it is important that your wholesaler and dropshipper knows up front that you sell online, AND WHERE, so they can see if their brands will allow it."

Ready, Set, Why...

There should always be a reason why you want to sell a certain product. Either you are building a website that addresses a certain need, or you are working for some charity and selling specific products that proceeds go to, or your market research finds that product to be an excellent one to sell.

Formulate a quick way you plan on selling those products. Say you are going to feature them on your website, or that you primarily use social media to resell products and you have plans of making fun videos with the products. Maybe you are just wanting to sell the product on a third party site like Amazon because you didn't see them represented very heavily there. Regardless of what it is, jot down some quick ideas. Many suppliers want to know where and how & so have some ideas on hand. Plus it will simply impress them! 

Wholesaler and Dropshipper Checklist

So, in summary, when interacting with your wholesale supplier, make sure that...

1. You have your legal paperwork on hand to provide to them and
2. That you are ready to share with the supplier your plans on how you are going to sell those products.

These two things will get you the best results with your wholesale supplier or dropshipper!

Want some more tips about interacting with a wholesaler and dropshipper?
Check these out:
Before You Contact a Wholesale Supplier
5 Things you Must Know About Wholesale Sources Part 2