Let’s start with the definition of the word reseller. A lot of people thought that sellers and resellers are the same. Quite true. But there is indeed a difference. Sellers or vendors are person/s or a company that manufactures products and sells directly to consumers or retailers or resellers. On the other hand, resellers are person/s or a company that buys finished products from a manufacturer or a wholesaler in the intent to sell it again to consumers without changing anything from the product.
Most online businesses are resellers or started being one before making their own products and sells them. Nowadays, if you’re thinking of starting a business (online or physical store) in a tight budget, being a reseller would be wise. It is less expensive, it has a sure market (depending on the product), easy to process, and it has less to no tax too. However, the question is– like sellers and businesses– do you need a reseller’s permit?
What is a seller’s permit?
Let’s define this first– a seller’s permit is an authorization document given and required by states or local authorities. It is a certification that legally allows you to conduct business, whatever entity it is. Without one or if failed to secure one– could result in fines, penalties, and back taxes on previous sales. Basically, it is illegal to run a business without a permit.
How to register or get a seller’s or reseller’s permit?
You may register and secure all kinds of permits via online, email, or in person. All you have to do is fill-up some forms and submit them.
Reseller’s Permit, do you need it?
Now for our main topic. The answer is… it depends. States and local authorities have different rules when it comes to requiring businesses to get sellers and resellers permit. Some states require you to secure a permit if you are selling tangible products to the public whether wholesale or retail. Some also ask permits even if you are only selling temporarily for a season or a holiday. For example in California, all business has to secure one.
Usually, for online businesses, you don’t need a seller’s or reseller’s permit. But if you’re selling products or services in a regulated industry like healthcare, then you must secure one. However, some states also require permits even if you are only selling online. So… it really depends.
However, whether it is required or not, it is wise to secure one. These kinds of permits are the ones you can display to your store whether it’s physical or online. It will prove the authenticity of your business, especially for resellers and online businesses. Consumers are keen now before buying a product. They don’t likely to trust you right away, especially if you’re new. A permit will help you give them a reason to. Thus, it will help you market your products or services by building trust with your customers.
So… do you need a reseller’s permit? Yes!