If you are looking to get into the retail clothing business, the largest asset would be a wholesale license. This license will allow you to purchase goods in bulk at low costs, direct from manufacturers and distributors. Obtaining your wholesale license should be crucial in any business plan. Luckily, obtaining a wholesale license for clothing isn't difficult, as it is a simple process of filling out some paperwork and paying some fees. Each state is slightly different, so it is best to follow up with the particulars of the state in which you are doing business.
- Skill level:
Things you need
- State filing fees
Obtain a DBA. Also known as a "fictitious name" or "doing business as," a DBA is the name your business will operate under. This applies not only to corporations, but also to partnerships and sole-proprietorships. Unless you are conducting business using your real name, this applies to you. You can get a DBA from your state's Division of Corporations by filing out a form and paying a fee.
Obtain an EIN. An EIN is an Employer Identification Number, and it is issued by the IRS. An EIN is similar to a Social Security Number, but it is for businesses, and it is what you would report when paying taxes. The only instance in which you would not need an EIN is if you were a sole-proprietorship operating under your own name.
Obtain a sales tax ID and reseller certificate. Once you have an EIN and DBA, you can obtain your sales tax ID and reseller certificate from your state's Department of Revenue or State Tax Department. The resale certificate will allow you to buy goods at wholesale without paying sales tax. The sales tax ID will let you open an account with the state to collect sales tax from customers. If you are looking to purchase goods on the wholesale level, most vendors require that you have a sales tax ID or reseller certificate.
Tips and warnings
- Your local chamber of commerce, SBA, or S.C.O.R.E. office can help you in contacting the appropriate offices for your state and county.
- Most of the forms required in getting these licenses can be obtained and submitted online.
- If you are uncomfortable completing any of the steps, make sure to get help from either an attorney or experienced agent.
- Make sure to follow all laws applicable in your state of business.
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