Whether you are looking to furnish your home, your restaurant, lobby or commercial building, you want to buy wholesale furniture for the lowest price. Since there are no laws governing the use of the term “wholesale” in marketing, you are in “buyer beware” territory when you review your potential vendors. I have put together a short description of what a furniture wholesale company does and the documentation that a new account needs to supply in order to open an account and enjoy the benefits of lower price and higher service both pre and post sales.
A wholesale furniture company buys from manufacturers and stores the furniture in a warehouse or ships the furniture to a retail store. For example, Wholesale Interiors buys from XYZ, Inc. manufacturer in China, who ships containers of furniture from their facility to Wholesale Interiors’ warehouse in Chicago where retailers pick up the furniture as needed. The wholesaler fronts money to the manufacturer in either anticipation of an order from a retailer or collects a deposit from the retailer and handles the international customs paperwork as part of their service.
In order to participate in a wholesale furniture supplier’s program, the retailer must have and present a business license with a federal tax ID and a reseller certificate from the state which they sell furniture. It is helpful for the wholesaler if the name of the business on the documentation has something to do with furniture, design, architecture or home improvement because in the event of a state sales tax audit, questionable business names like “Bob’s Gas Station” would imply that the end user is the gas station and not the retailer. At the end of the day, a furniture wholesaler may outright reject a potential customer that has a questionable name to avoid hefty fines that can be levied by the state or the wholesaler may just opt to charge sales tax to the business and possibly charge more for the furniture to protect their other reputable furniture stores in the area by not undercutting them.
If you need more assistance with obtaining the correct paperwork, we recommend contacting either your local chamber of commerce or cities sales tax revenue department. Paperwork is very easy to fill out if you already have your federal tax ID. Remember that the more specific your name is to furniture the easier it is for your customers and your wholesaler to understand the line of work you are in.