How do I establish business partnership with wholesale companies ?

[macy gray]

Hi there. I'm an young entrepreneur looking forward to sell some products online. I wish to ask you guys few questions about wholesale places.

I've created an LLC in Wyoming as an foreign entity (I'm a resident of European country). I've obtained my EIN number as well as certificate of LLC creation from Secretary of State. This is all I have for the moment. Here's a couple of questions I would like to ask:

1. I would like to ask which documents exactly are required by any professionally operating wholesale company to confirm me as a business partner and unlock the possibility to see their products and prices ? How to prove them in safe way that I am a legal LLC ?

2. Do I need to sign an agreement or some sort of contract before I'll take anything from them ? I ask this for my own safety as I've heard that there is a lot of scams out there. I would like to know what sort of protection I can have while cooperating with any wholesale company ?

3. How can I know if a particular wholesale company is legit and trusty ? Where I can find them ?

Any help will be equal to gold for me :)

Cheers !

[Fulcrum]

A better idea may be to try and contact the manufacturer directly and they will tell you the name of their distributor if they won't deal directly with you. Google is a great resource if you have the patience to sift through several hundred/thousand links to find the one you are looking for.

As for documentation, I don't think anyone can really give a concrete answer until you talk to the distributor/manufacturer as some will want different things. If you start ordering in large volume, there is a possibility that your supplier will require "proof of funds" before they will issue you any kind of significant credit.

In regards to legal and/or downside protection, speak with a competent business lawyer. I used to work for a company that tried to do this without going through lawyers and they got burned on some 6 figure transactions due to conflicts of interest and not requiring prepayment to an independent third party (escrow).

[PayForWords]

Yeah, I would just contact any prospects individually and they'll probably each have their own specific guidelines.

[Irene222]

1. It differs but the majority of wholesalers/suppliers will ask for your tax ID. If they don't, it's actually a sign they might not be trustworthy. Other than that, what suppliers asks for varies a lot.

2. Not always, and even if you do sign a contract, you could still fall prey to a scammer. This is especially true if you are dealing with international suppliers. Contracts mean very little across boarders, which is why it's best to only deal with suppliers you trust... hence why I'm glad you asked your third question...

3. Here are my best tips:

- Always use a credit card or Paypal to purchase goods. These forms of payment are safe because they give you a comeback if something goes wrong. With these payment methods, you can usually have the transaction reversed fairly easily if necessary.

- Call the supplier's telephone numbers to ensure they are genuine. If they don't have a phone number, it could mean they are not a real company.

- Purchase a sample before bulk ordering to ensure that the item meets your expectations.

- Use trusted wholesale directories like SaleHoo to ensure you never lose any money to a wholesale scam.

Good luck!

[Lg136]

It's very easy to purchase from liquidation companies. Everyone thinks they need a license, special agreement or partnership with a liquidation company. This is just simply not tue. I know this because I own a liquidation company. We sell to very large companies but we also sell to the small start up businesses. I have many customers that started buying small quantities at first and then grew there businesses to multiple locations. Wether you purchase from my company ( Liquidation General) or any other liquidation company ( and there are a lot of them out there) just call them or visit there website.
Be careful when purchasing from liquidation companies. Some are not real companies and only broker product or sell defect product. Only purchase first quality product or you will end up with a bunch of junk.
Liquidation companies will NOT give you a line of credit at first. You will need to establish a long term relationship with them before they will extend credit. Hope this helps.