How to Get a Reseller's Permit - Fastest Way to Better Inventory Prices and Higher Profit Margins for EcommerceYou don't need to be a rocket scientist to understand that lower prices can significantly boost your profit margins. One way to achieve this is by obtaining a reseller's permit, which allows you to make purchases without paying sales tax upfront. The reason this is allowed is because you're not the end consumer of the goods. YOUR customer is.
Let me walk you through my experience and the straightforward two-step process to get your own reseller's permit. It's actually quite simple...
Step 1: Applying for an EIN at IRS.gov
The first thing I did was head over to IRS.gov to file for an Employer Identification Number (EIN). You might wonder, "What is an EIN?" In simple terms, think of it as a social security number for your business. You don't necessarily need an actual business or an LLC to apply for an EIN, although having one is recommended. As a sole proprietor, you can also file for an EIN. However, keep in mind that if you decide to form an LLC or upgrade to an S corp for tax benefits later on, you'll need to apply for a new EIN at that point.
Obviously, if you already have a business setup and an EIN for it...you can skip this step if you'd like to use the same business.
Step 2: Filing for the Reseller's Permit in My State
With my newly acquired EIN, I moved on to the next step, which involved visiting my state's website. Using the EIN, I applied for the reseller's permit within my state. The process was surprisingly straightforward and took only a few minutes. You should be able to find this link somewhere on your state's website. And if you're struggling to find it, I'd recommend just giving them a call to ask where to get the form. It can be referred to by many different names depending on the state (reseller's license, tax license, and reseller's exemption are just a few others). Once I received my permit, I was able to buy products without paying sales tax. This increased all my future profit margins by up to 10% (depending on the state), which is MASSIVE!
It's that Simple!
Obtaining a reseller's permit was not as complicated as I initially thought. In just 2 easy steps, I unlocked access to better prices, allowing me to increase my profits significantly. My journey was smooth, and I encourage everyone who's serious about reselling to take these steps.
Resources to Guide You
If you're unsure about how to apply for an EIN or where to find your state's website for the reseller's permit, there are helpful resources available. One of my favorite liquidation companies, 888 Lots, has a comprehensive post outlining this process in detail. You can find the link to this resource by a simple Google search for "888 Lots: How to Get a Reseller's Permit" and it will lead you to their helpful guide, where you can click each state and head right over to your state's website.
I hope my experience and these steps will assist you in acquiring your reseller's permit and enable you to take your reselling business to new heights. Remember, it's a simple process, don't overcomplicate it. Hope this helps!