If you’re considering starting a resale business—whether it’s an online store, a boutique, or flipping products on Amazon—you’ll likely need a wholesale license.
This license is essential as it enables you to legally purchase products in bulk at discounted prices and resell them for a profit.
Let’s say you want to launch your private-label supplement brand and start sourcing from wholesale manufacturers—you’ll almost certainly need a wholesale license to work with reputable suppliers and avoid paying unnecessary sales tax.
In this guide, we’ll walk you through exactly what a wholesale license is, why you need one, and how to get one step by step. Whether you’re just getting started or need help navigating state and federal forms, you’ll find everything right here.
What Is a Wholesale License?
A wholesale license, reseller’s permit, or resale certificate is a legal document that lets your business buy goods at wholesale prices without paying sales tax, as long as the goods are intended for resale.
Key things to know:
- It’s issued by your state’s tax or revenue department.
- It’s often required if you want to buy from wholesale suppliers or manufacturers.
- It’s different from a business license or EIN.
Some people confuse it with a business license, which gives you permission to operate a business, or an EIN, which is like a business’s Social Security Number. Depending on your state and business type, you may need all three.
Why You Need a Wholesale License
Having a wholesale license is more than just paperwork—it’s your ticket to:
- Buying from wholesale suppliers (most won’t even talk to you without one).
- Saving money by avoiding sales tax on resale items.
- Operating legally if you’re reselling goods, whether online or in person.
If you plan to sell on platforms like Amazon, eBay, or Shopify or set up shop at a physical location, you’ll likely need a wholesale license to stay compliant and competitive.
How to Get a Wholesale License: Step-by-Step
Here’s how you can get started:
Step 1: Choose Your Business Structure
Before applying, you’ll need a formal business structure. You can choose from:
- Sole proprietorship (simplest, but offers no legal separation from you)
- LLC (Limited Liability Company)
- Corporation
Most small business owners choose an LLC for liability protection and tax benefits. You can usually register through your state’s Secretary of State website.
Step 2: Register Your Business Name
If you’re not using your personal name as your business name, you’ll need to register a Doing Business As (DBA) name.
Check your state’s business registry to make sure your desired name isn’t taken.
Step 3: Get an EIN (Employer Identification Number)
An EIN is like a Social Security Number for your business. You’ll need it for tax purposes and to open a business bank account.
You can apply for free through the IRS website, and it only takes about 10 minutes.
Step 4: Apply for a Business License
Depending on your location, you might need a general business license before applying for a wholesale license. Check with your city or county clerk’s office to see if it’s required.
Step 5: Apply for a Wholesale License (Resale Certificate)
Now, it’s time to apply for your wholesale license. This usually happens through your state’s Department of Revenue or Department of Taxation.
You’ll typically need:
- Your EIN
- Business name and address
- Business structure type
- Description of what you’ll sell
Many states offer a free online application process. Once approved, you’ll receive a resale certificate or number that you can use with suppliers to skip paying sales tax.
Step 6: Start Sourcing Products from Wholesale Suppliers
Once you’ve got your wholesale license in hand, it’s time to start sourcing! This is where things get exciting—you can now connect with wholesale suppliers and start building your inventory.
Here’s how to approach it:
- Reach out to manufacturers and wholesalers in your niche.
- Compare pricing, minimum order quantities (MOQs), and shipping options.
- Be prepared to show your resale certificate or license—it’s often required before you can place an order.
If you’re looking for a convenient way to explore suppliers globally, platforms like Torg can match you with verified suppliers based on your requests using AI, without the hassle of cold outreach.
How Much Does a Wholesale License Cost?
Good news: a wholesale license is often free or low-cost. In many states, it costs $0 to $50 to apply. Some states may bundle the wholesale license with your business license and charge a small fee.
Always check your state’s official website—never pay third-party services unless you’re sure they’re legit.
How Long Does It Take to Get a Wholesale License?
In most cases, the process is pretty quick. You can often apply online and get your license within a few business days. Some states issue temporary licenses immediately, while others take up to 2–3 weeks to process your application.
Maintaining and Renewing Your Wholesale License
Once you’ve got your license, you’ll need to renew it periodically—usually annually or every few years, depending on your state. You’ll also need to keep records of:
- What you’ve purchased using the license
- Who you’ve sold to
- Sales tax collected (if applicable)
Failing to renew can lead to fines or losing your tax-exempt status with suppliers.
Common Mistakes to Avoid
A few missteps can slow you down or get you in trouble. Here’s what to avoid:
- Not registering your business properly before applying.
- Assuming you don’t need one if you only sell online.
- Using a personal bank account for your business (always separate the two).
- Skipping local business license requirements.
Conclusion
Getting a wholesale license might seem like a lot of paperwork, but it’s a relatively simple process—and it unlocks big advantages. You’ll be able to legally buy in bulk, access better pricing, and work with legit suppliers. If you’re serious about reselling or growing your business, this is one of the first steps you should take.
FAQs
1. What’s the difference between a wholesale license and a resale certificate?
In many cases, they’re the same thing. A wholesale license or seller’s permit is often called a resale certificate because it allows you to buy goods tax-free and resell them. Some states differentiate between the two, so check your local rules.
2. Can I get a wholesale license without a business?
No—you need a legal business entity to apply. Most states won’t issue a wholesale license unless you’ve registered your business and obtained an EIN.
3. Do I need a wholesale license to buy from Alibaba or other suppliers?
Many suppliers and platforms like Faire or Tundra require one. Alibaba may not, but customs clearance and tax exemptions often require proper licensing if you’re importing.
