If you're opening a store and want to buy products at cheaper prices, you need a wholesale license to get those discounts from suppliers.
Without it, you'll pay the same prices as regular shoppers, which leaves you with very little profit. With the right permit, you can often buy wholesale items without paying taxes.
Read on to learn how to get a wholesale business license, what it is, why you need one, and how much it costs.
What is a wholesale license?
A wholesale license lets you buy products in large amounts directly from makers or suppliers at lower prices. With this license, you often don't pay sales tax when you buy the products.
You need a wholesale license if you plan to resell items to customers (online or in a physical store) or other businesses. The rules and costs differ in each state, some states charge a fee when you apply and make you renew every year, while others don't.
The main advantage is access to cheaper wholesale prices and better profit margins. However, you must properly collect and pay sales tax from your customers when required by law.
📚Read: Wholesale vs. Retail: What’s the Big Difference? (2025)
Steps to getting a wholesale license
- Register your business and choose a legal structure
- Apply for an Employer Identification Number (EIN)
- Obtain a sales tax permit or sales tax ID
- Gather the required information and documents
- Submit the wholesale license application and pay the fee
- Wait for approval and receive your wholesale license
1. Register your business and choose a legal structure
The first step to getting a wholesale license is to make your business legit. This involves business registration, during which you’ll choose a legal structure for your business.
Typically, retailers choose from the following business structures:
- Sole proprietorship
- General partnership
- Limited partnership
- Limited liability partnership (LLP)
- S Corporation
- Benefit corporation
- Limited liability company (LLC)
- Nonprofit
Choosing the right entity type also shapes your long‑term wholesale strategy for retail, from tax treatment to supplier negotiations.
2. Apply for an Employer Identification Number (EIN)
Once you’ve registered your business, you can apply for an EIN. This is your business’s federal taxpayer ID, so it’s what you’ll use to open business bank accounts and file your taxes, for example.
To apply for an EIN for your business, you can go to the IRS website and follow the instructions. You’ll need your name, social security number, address, and business name to complete the application for an EIN. Typically, you can get your EIN on the spot.
3. Obtain a sales tax permit or sales tax ID
With your business registered and recognized by the IRS, you can apply for a sales tax permit and ID. A sales tax permit, also known as a sales tax license or seller's permit, is a state-issued document that authorizes a business to collect sales tax from customers on taxable goods and services.
The specific requirements and regulations for obtaining a sales tax permit vary depending on the state, so it’s best to check the details with your local jurisdiction.
4. Gather the required information and documents
You’re all set to start business, so now it’s time to get your information and documents ready to take the next step of getting your wholesale license.
While specifics may vary depending on where your business is located, a general checklist of required information and documentation includes the following:
- Full name
- Business name
- Taxpayer ID
- Business EIN
- Home address
- Business address
- Business contact information (email, phone, etc.)
- Business license
- Sales tax permit
- Business structure
- Nature of the business
You might not necessarily need a business license, but it could be required by your state. Even if it’s not required, getting a business license can support your case for why your wholesale license should be approved.
5. Submit the wholesale license application and pay the fee
Every state has its own process for obtaining a wholesale license. So, you’ll want to check with your local jurisdiction to find out what the application requirements are, as well as if there are any associated fees. For example, Alaska has a biennial general wholesale license fee of $2,000, while Alabama doesn’t require a wholesale license unless you’re buying or selling automobiles wholesale.
The primary purpose of a wholesale license is to be able to legally buy products at wholesale prices, which are generally lower than retail prices, and then sell those products at a profit. Sometimes, wholesale purchases may even be tax-free. However, you still may have to collect sales tax from customers when the goods are resold.
A wholesale license is usually required for businesses that intend to sell products to other businesses (B2B) or to consumers (B2C). It’s common in industries like electronics, clothing, automotive parts, and food.
6. Wait for approval and receive your wholesale license
Once you submit your application, you wait. There may be cases where a physical inspection of your retail space is required, so it’s a good idea to be prepared for that if necessary. It’s also a good idea to make yourself available for any follow-up questions or documentation needs as your application is reviewed.
Requirements to get approved for a wholesale license
While the requirements for wholesale licenses vary and, again, it’s best to check with your local jurisdiction, some general guidelines do apply. Typically, businesses are required to have the following to receive approval for a wholesale license:
A valid business registration and legal structure
Your business should be registered in the state where you operate and with the proper legal structure.
An Employer Identification Number (EIN) or Federal Tax ID
Your EIN is your business’s federal taxpayer identification number and serves as a way to identify your business as a unique, standalone entity. To get a wholesale license, you’ll first have to complete this step if you haven’t already done so.
A sales tax permit or sales tax ID
While wholesale purchases may be tax-exempt, retailers are often required to pay sales tax for each sale they make. Some states don’t require sales tax, so it’s always best to check where you operate and where your customers are located.
A physical business address (not a P.O. box)
As a retail business, you likely have a physical address. Many states won’t accept a P.O. box address as your official business address when reviewing wholesale license applications. Be sure to always provide your physical address.
Proof of business insurance
Business insurance protects you against unforeseen and uncontrollable circumstances. Many states want businesses to have this layer of protection before approving wholesale licenses.
A completed wholesale license application
To receive approval for a wholesale license, you’ll need to successfully complete the required wholesale license application for the states where you plan to do business. This may require multiple applications and fees, depending on the nature of your business.
Payment of the wholesale license fee
While some states don’t charge a wholesale license fee, most will require some sort of payment or deposit. Again, you may have to pay multiple fees if applying in multiple states.
How much does a wholesale license cost?
The cost of a wholesale license depends on the location. A wholesale automotive auction license in Alabama, for example, costs $125. It also depends on the type of wholesale license you’re after.
In New Jersey, for example, wholesale licenses for alcohol are anywhere from $1,031 to $8,750. Check prices with your local government.
To set realistic margins, compare your potential license fees with broader pricing for wholesale guidelines.
Do I need a wholesale license?
If you want to resell products, you’ll likely need a wholesale license. Some businesses might need different kinds of resale permits depending on where they operate. Your choice of permit also affects which retail distribution channels you can legally access.
Seller permit vs. wholesale license
A seller’s permit and a wholesale license are two different types of permits for retailers. A seller’s permit is often required for all businesses that sell or lease taxable items in a state.
Seller’s permits are not the same everywhere. They vary significantly between states and even sometimes local jurisdictions within states. Each state also has its own eligibility criteria, application process, and documentation requirements.
Reseller’s permit vs. wholesale license
Also called a “resale certificate” or “resale license”, a reseller’s permit lets you buy goods without paying sales tax when you resell them. It moves the sales tax payment to the final customer. A wholesale license is often the prerequisite for getting a reseller’s permit.
Get a wholesale license for your retail business
Now that you know the benefits of having a wholesale license, you can get organized and gather the information you need to take advantage of having one. With the paperwork done, explore new wholesale opportunities to scale your store through bulk selling before you launch those products on Shopify.
Obtain a wholesale license FAQ
What can you buy with a wholesale license?
A wholesale license lets you buy large amounts of goods directly from makers or suppliers at lower, tax-free prices for reselling. You can buy finished products like clothes, electronics, and home items, or raw materials and packaging.
Can you buy wholesale with an LLC?
Yes. Creating an LLC makes your business legal, but suppliers still need to see your state's wholesale or reseller permit to give you tax-free prices. You need both your LLC paperwork and the license.
Can I use my EIN to buy wholesale?
Suppliers might ask for your EIN (tax ID number) to check that your business is real, but just having an EIN doesn't let you buy tax-free. You must show a proper wholesale or resale certificate from your state.
How long is a business license good for?
Most states give wholesale or reseller licenses that last one year and need yearly renewal. Some places offer two-year licenses or ones that don't expire as long as you keep filing sales tax forms and paying fees.
What are the consequences of operating without a valid wholesale license for my retail/ecommerce business?
Without a license, suppliers can charge you sales tax, states can make you pay back taxes plus interest and fines, and you might lose relationships with suppliers. If you keep breaking the rules, you could face audits, lose your right to sell, or even get civil penalties.
