How to Get A Wholesale License: A Complete Guide

Before you can officially step into the wholesale world, you have one major formality to complete – getting a wholesale license. It lays the foundation for everything that follows. This license gives your business the authority to buy products in bulk at lower rates and resell them to retailers for a margin, plus enjoy an array of additional benefits. In this comprehensive guide, we will explain how to get a wholesale license easily so that your business operates within the law.

What is a wholesale license?

A wholesale license is an official authorization that allows you to buy products in bulk directly from manufacturers or distributors, usually at lower prices. More importantly, it gives your business the legal right to operate as a wholesaler. 

With this license, you can purchase goods without paying sales tax at the time of purchase. This is because the tax is eventually collected from the end consumer when the product is sold. It’s required whether you plan to sell items either online or through a physical store.

Beyond legal authorization and tax exemptions, having this license adds credibility to your B2B wholesale business, as many manufacturers and suppliers prefer working only with licensed wholesalers.

How is a wholesale license different from a seller’s permit and a reseller’s permit?

The terms wholesale license, reseller’s permit, and seller’s permit are often used interchangeably. However, they refer to different aspects of how a business buys and sells products. 

• Wholesale license: It is a broad term used to describe the authorization that allows a business to buy and sell products in bulk, typically to other wholesalers or retailers.
• Reseller’s permit: It is the actual document that lets a business purchase goods tax-free from suppliers.
• Seller’s permit: It gives a business the legal right to collect and remit sales tax on products sold directly to consumers.

Here are the key differences between the three terms summarized in a table:

Want to know how selling to businesses and selling to end consumers differ in today’s ecommerce world? Check out this guide: B2B vs B2C Ecommerce: What is the Difference?

Why do you need a wholesale license?

Here are some compelling reasons to get a license if you are a wholesaler:

• Gain legal authorization to operate: A wholesale license gives your business the official approval to buy and sell products in bulk. This ensures your operations are fully compliant with trade laws.
• Access exclusive pricing: It allows you to purchase goods at wholesale rates and volume-based discounts. Such discounts are typically unavailable to consumers or retailers. 
• Enjoy tax advantages: With a valid license, you can claim tax exemptions when buying products for resale. This automatically improves your profit margins.
• Enhance supplier credibility: Having a license builds trust with manufacturers and distributors. This makes it easier to establish long-term supplier relationships.
• Stay compliant: It ensures your business meets all state and local regulatory requirements. This prevents fines or legal issues down the line.

How to get a wholesale license?

Getting this license need not be an incredibly complex process if you know how to apply for a wholesale license systematically. Here are the key steps you need to follow to ensure your business is ready to buy and sell in bulk:

Step 1: Register your business and choose a legal structure

The first step is to convert your business into a legal entity. This means your business must be formally registered with the right state or local authorities. This step is also critical in determining how your business will be taxed and managed.

During registration, you’ll need to handle two things. One, picking a unique business name. The second is picking an appropriate business structure. Some of the key structure options include:

• Sole proprietorship – A simple and inexpensive business structure to set up, but the owner assumes all liability.
• Partnership – Involves two or more owners sharing profits, losses, and responsibilities.
• Limited liability company (LLC) – Offers flexibility and limits personal liability
• Corporation (S Corp or C Corp) – Suitable for larger operations that need to raise capital or separate ownership from management

Choosing the right legal structure is a critical step in getting a wholesale license because it affects everything from how you file taxes to how you negotiate with suppliers and manage long-term business risks. Once registered, you’ll receive official business documentation, which you’ll need for later steps in the licensing process.

Step 2: Apply for an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is issued by the Internal Revenue Service (IRS) and serves as a unique identifier for your business. To apply for an EIN, you’ll need to go to the IRS website and supply the following information:

• Business name
• Social security number
• Business address

Approval is typically granted immediately. Just make sure your business’s legal name and the name used for the EIN application match exactly. 

Step 3: Get a sales tax permit (Optional step)

A sales tax permit is nothing but the seller’s permit, which we discussed earlier. This step is applicable only if you plan to sell to end consumers. This permit allows you to collect sales tax from customers and remit it to your state’s tax agency. The specific requirements to get a sales tax permit will differ based on your state and location. So, it’s best to check the details with your local jurisdiction. 

Step 4: Submit necessary documents

After securing your business registration, EIN, and sales tax permit, you’ll need to gather and submit all relevant documentation for your wholesale license application. This typically includes:

• Business registration certificate or articles of incorporation
• EIN confirmation
• Sales tax or reseller’s permit
• Business address and contact details
• Identification documents for the business owner(s)

Some states may require additional documentation, such as zoning permits or proof of a business bank account. Most states allow you to apply and submit documents online, but others may require submission by mail or in person.

Step 5: Pay the fees

Once your application and documentation are ready, you’ll be asked to pay a processing fee. The cost of a wholesale license can range from $20 to $100. It again depends on your state and the type of business you operate. In some jurisdictions, you might also need to renew your license annually or biennially for a smaller fee.

Keep a copy of your payment confirmation and any official correspondence from the licensing office. These records can be useful for renewals, audits, or when applying for additional permits in the future.

Step 6: Get your license

After submitting your application, the next step is to wait for approval. Processing times can vary from a few days to several weeks. Once approved, you’ll receive your wholesale license by mail or email.

Here’s what you can do once you get your license:

• Store your license securely and keep it easily accessible for records.
• Share a copy with wholesalers or suppliers when setting up new accounts.
• Note any renewal dates required by your state.

You’re officially authorized to purchase goods tax-free and partner with suppliers. 

Dos and don’ts of getting a wholesale license

Applying for a wholesale license is a straightforward process, but there are some pitfalls to avoid to ensure a smooth approval. Follow these dos and don’ts to get it right the first time: 

Dos of a wholesale license

✅  Do research on your state’s requirements: Each state has its own licensing process. From fees to documentation needs, everything varies. Review them carefully before you apply.

✅ Do gather all necessary documents: Keep your business registration, tax ID (EIN), and proof of address ready to avoid delays in the application process.

✅Do provide accurate information: Make sure every detail in your application matches your business records. Even small discrepancies can slow approval.

✅ Do keep your license handy: Once approved, store a digital and physical copy of your license for easy access when working with suppliers.

✅ Do renew on time: Mark your calendar for renewal dates to maintain compliance and avoid penalties.

Don’ts of a wholesale license

❌ Don’t apply under the wrong business type: Ensure your business structure is correctly registered before applying.

❌ Don’t ignore local permits or zoning laws: Some states require additional permits or inspections. Check before you begin your business activities. 

❌ Don’t assume one license covers all: If you operate in multiple states, you may need separate licenses for each location.

❌ Don’t share your license with others: Your wholesale license is unique to your business and cannot be transferred or used by another entity.

❌ Don’t neglect record-keeping: Maintain a copy of all transactions and supplier invoices for tax and compliance purposes.

Start selling wholesale with WizCommerce

Getting your wholesale license is just half the job done. To succeed as a wholesaler, you need a platform that simplifies selling. It should enhance buyer experience and at the same time scale effortlessly with your business. WizCommerce is that platform. It is an all-in-one B2B commerce solution tailor-made for modern wholesalers to grow. Here are some key features that make your wholesale journey with WizCommerce effortless:

• Plug-and-play integrations: No matter what existing systems or platforms you use, WizCommerce connects effortlessly with them to ensure you have a single source of truth for all your wholesale data. From ERPs like Microsoft Dynamics 365 and SAP S/4HANA to accounting tools like QuickBooks and Xero, WizCommerce supports seamless connectivity with all. 
• Customizable checkouts: You can tailor the checkout experience to match your buyers’ workflows. You can assign customized net terms, while your buyers can share personalized delivery notes and access multiple payment methods and shipping/billing options. 

• Multiple price lists: Your reps can create and switch between multiple price lists instantly. Best part – no backend help needed. Whether based on buyer type or deal, your reps can personalize pricing on the spot and close deals faster.

• Multi-cart management: Your reps can create and manage multiple carts simultaneously for different buyers or departments. Each cart acts as a separate workspace, helping teams handle parallel deals smoothly.

• Offline mode: This feature is designed for field reps and trade shows. WizCommerce’s offline mode enables order-taking without internet access. Your reps can capture new buyer details and scan barcodes from anywhere. All the data is automatically synced to the cloud once they are back online.

• Analytics & reporting: You can track sales performance, orders, and customer activity in real time with intuitive dashboards. The built-in lead scoring system ranks buyers by priority, helping your team focus on high-value prospects and drive more conversions.

• Kai: This is WizCommerce’s in-house AI assistant, which empowers your reps with instant customer insights and product recommendations. With ready-to-use prompts, it helps sales teams engage smarter and convert faster.

• Inventory intelligence: Real-Time Stock Visibility: WizCommerce gives your reps and buyers instant access to live stock data, including available, reserved, and in-transit inventory. This transparency builds buyer trust and helps your team sell with greater accuracy and speed.

So once you get your wholesale license, book a demo to kickstart your wholesale journey. Or if you are looking for tips to sell to retailers, check out this guide: Wholesale To Retail: How to Approach Stores to Sell Your Product

Next steps: Turn your wholesale license into a growth engine

Once you have got your wholesale license, immediately put it to work and start selling smarter. Find reliable suppliers, build retailer relationships, and optimize your business operations with the right platform like WizCommerce. Keep your paperwork organized, renew your license on time, and stay compliant with local regulations. With the right partnerships and technologies, your wholesale business can grow faster and scale sustainably.

Frequently asked questions

1. Who needs a wholesale license?

Any business that plans to make bulk wholesale purchases for resale generally needs this license. This usually includes wholesalers and distributors who sell goods to other businesses. Even small businesses that occasionally purchase inventory for resale may require a license.

2. What documents are required for a wholesale licence?

To apply for a wholesale business license, you need to submit documents proving the legitimacy of your business. These typically include your business registration certificate, EIN, proof of business address, and personal identification. 

3. How long does it take to get a wholesale license?

The time required to obtain a wholesale license varies by state. In some states, you may receive approval within a few days. In others, it can take several weeks. Factors that affect processing time include the completeness of your application, the nature of the business, verification of documents, and whether an inspection is required. 

4. Can I start a wholesale business without a license?

Technically, you could begin buying and selling goods without a wholesale license. But doing so doesn’t fulfill several legal requirements and comes with serious risks. Operating wholesale without a business license can lead to fines, penalties, denied supplier accounts, and tax complications. Additionally, many suppliers require proof of a wholesale license before selling in bulk. 

5. What is the difference between a wholesale license and a retail license?

A wholesale license allows you to buy products in bulk from manufacturers or distributors and sell them to other businesses or retailers, often tax-free. In contrast, a retail license authorizes a business to sell products directly to end consumers. This usually includes the responsibility to collect and remit sales tax. 

6. Can I apply for a wholesale license online?

Yes, most state governments now allow businesses to apply for a wholesale license online through official government organization websites. Online applications simplify the process, enabling you to submit required documents, pay fees, and track approval status without visiting an office. Some states may still require additional steps, such as physical inspections or follow-up verification.

7. How to renew a wholesale license?

Renewing a wholesale and resale license generally involves submitting a renewal application to the state licensing authority before the license expires. Most states allow online renewal. You can usually update business information and pay the renewal fee. 

8. How to get a furniture wholesale license?

There isn’t any major change in the process when it comes to getting a furniture wholesale license. Follow the steps highlighted in this guide, including submitting documents related to business registration, tax ID, and proof of address. Once approved, the license will legally allow you to buy furniture in bulk from manufacturers and resell it to retailers or designers.

9. How to get a distributor license?

To obtain a distributor license, register your business entity, obtain a tax identification number, and apply through your state’s licensing department. You’ll need supporting documents like business ownership proof, address verification, and tax records. After approval, the license allows you to purchase products directly from manufacturers and distribute them to retailers or wholesalers.