Nowadays when people think of wholesale products they immediately think about China, and distributors like Alibaba. But to source wholesale products from China is not the ideal, mostly because of the delivery times. If you are in the US selling products to US customers, it just makes sense that your wholesale supplier be in the US as well. This misconception that cheap and easy wholesalers are all in foreign countries has prevented many people from starting an online store.
There is only one catch in all of this: getting true wholesale prices from good American suppliers requires that you create a business entity for your store. That’s because the wholesalers need you to open a “dealer” account with them, and most require that the dealer is an official business entity with a reseller permit. Then you need to find the suppliers and create the accounts.
Sounds like too much work, but it’s really not. In this article, we will guide you through the steps of sourcing your wholesale products from suppliers located in the United States, so you can be confident and start your online store journey as soon as possible!
Business Entity Registration and the Reseller Permit
So, the first step to sourcing your products from US suppliers is to register for a business entity. You will want to register the business in the state that you intend to be headquartered in (that would typically be the same state of your residence, for convenience). The most common and logical business type to start with is the LLC (or Limited Liability Company), and in most states it can be done online and is relatively cheap, no more than a hundred dollars.
If you are undecided as to where to register your LLC, a useful tip to help you is to focus on low populated states, like Wyoming, rather than the highly populated ones. But you would still want to give preference to the state where you are living in, just remember to check the requirements and the costs online before making the decision. After that, you will need the reseller permit to go with your LLC (or any other business entity type for that matter).
Those are also called “seller’s permit” or “resale tax permit” in some states, and the purpose of this permit is to make sure that you remit the proper taxes to state agencies. Usually when registering the LLC online, it will link you to the reseller permit application page, hosted by the state’s tax commission.
The last step in the bureaucracy is to get your EIN (or Employee Identification Number), which basically is your “Tax ID”, and it only takes a few minutes to do via online application. At this point, the boring part is over, and it should not take very long to do it at all. Most steps (if not all) can be done online in a few minutes. But don’t neglect this step: it’s important to have this before anything else!
Branding and Domain Naming
Now we finally get to the fun stuff, that is creating a brand and name for your online store. When brainstorming possible names for your brand, focus on the products on your niche and the target audience you want to sell to, and check for availability online. You want a domain name that is easy to remember, and that is not already in use.
The brand doesn’t have to be the most innovative or revolutionary out there, it just needs to be good enough and unique. So, what do I mean by good enough? Well, it’s a good idea that your brand name be descriptive of your product niche, so people can recognize what your business is about right away. You must keep it short, with 4 to 16 characters being the ideal length. Lastly, make it engaging! Use a pun, a nonsensical word, anything to make it fun or pleasing to read.
But beware of branding your store to be too similar to ones that are already existent and are already successful in the market. We don’t want brand confusion. While still tackling that confusion problem, don’t include the domain extension to your logo or brand name (no “coolstore.com” or buyhere.net”, for example). It’s also very important that you do not use any branding that’s already trademarked, so make sure to do your research there.
Identifying Suppliers and Establishing Accounts
This is the final step in the journey to source wholesale products from the US. After you already got everything you need for paperwork, and you have your brand name established, you need to find the suppliers and contact them. This is where you start your online store for real.
While many businesses focus on sourcing products, it’s equally important to have a robust platform to manage and distribute these products efficiently. Companies like Unilog specialize in providing solutions tailored for wholesalers, ensuring seamless operations.
Luckily, this is the easiest step so far, as all you need to do is search for your product niche phrase online (i.e. “fidget spinners”). Then you look for the top results for retailers that are selling the specific product in your niche. The first 2-3 retail niche store results are good enough for this step. Now you want to take note of the brands for the products you searched.
With those in hand, we must find out what the manufacturer’s name is, and where they are online. A specific Google search should give you the results you need. From there, you will need to get in touch with them, and establish those accounts needed to start doing business with them.
Easy, right? Well, it may look easy but it’s crucial that you do it right, and be prepared from the start. This article is more of a short guide to get you started on your journey, and not meant to be taken as a source for all the information you need. There’s a lot of details that you need to know before starting, and for that we recommend checking out StoreCoach’s free (step-by-step) course on starting an online dropship business!