Why wont wholesalers sell to people that arnt doing business(dont have a tax id number or business lisence)?
2006-12-26 11:14:34 · 8 answers · asked by Maybe Man.Maybe. 1 in Business & Finance ➔ Other - Business & Finance
Why cant you just buy from them like their normal retailers and pay your taxes there?
2006-12-26 11:20:15 · update #1
???????????
2006-12-27 19:23:40 · update #2
The basic answer is that because it's not how the system works, but that probably doesn't help much.
Wholesellers are part of a group along the distribution chain called resellers. For the most part, and for simplicity's sake, you could say that is more their job to move the products geographicaly from the manufacturer (or grower) to the final seller or retailer.
Also, according to tax law, companies pay something called an inventory tax, and therefore their merchandise is not taxed upon the sale of their merchandise. With this, unless you are able to make a purchase without paying a sales tax (in possession of a tax ID) you can't purchase from a wholeseller. Otherwise you would be in violation of federal tax laws.
If this still doesn't make any sense to you, Imagine you own Toys R Us. If there weren't wholesellers and a distribution chain, you would have to buy ships, and a ton of wharehouse space, because most of your inventory comes from places like China, Japan, and India.
If not only did you have to run your chain of stores, but also had to wharehouse all this stuff, not to mention have ships to move this stuff across the pacific or Atlantic, how much more do you think you'd have to charge for a Tickle Me Elmo doll in order to cover your additional costs?
2006-12-26 11:33:18 · answer #1 · answered by LongSnapper 4 · 0⤊ 0⤋
If they sold to both wholesale and retail custoomers they would then be both a wholesaler and a retailer, that is kind of like being two businesses. The point of being a wholesaler is that the customer service required is much smaller as you have fewer customers. There is also the matter of sales tax which they can legally not charge if you have a reseller's permit. Collecting sales tax and remitting to the state is another hassle that they can avoid. Basically wholesale is cheaper because they don't have to worry/spend money to deal with many retail issues. The retail side makes its money by dealing with those things.
2006-12-26 11:26:50 · answer #2 · answered by Jacy 4 · 0⤊ 0⤋
Tax id is just one thing, but volume is the main reason. Just think about it. If you were buying canned green beans for example from the wholesaler, how many cases would you buy in a year? 1-2-3 tops for an average family. Then they have to ship them to you and the cost to you would out weigh any savings if you were to stock up when they are on sale at the local market. This is not rocket science no is it.
2006-12-26 11:21:03 · answer #3 · answered by golferwhoworks 7 · 0⤊ 0⤋
Not sure!!
My first thought was that selling at wholesale prices, the company would need to sell in volume to make money. Maybe regular people would not buy enough to make it worth while to sell it for wholesale prices when the volume isn't large enough....
Just a thought...
2006-12-26 11:21:31 · answer #4 · answered by More Lies & More Smoke Screens 6 · 0⤊ 0⤋
1. Contact your local Business Link. This is a business advice service for small businesses, which is free, paid for out of tax money. As a small business, you are entitled to a few hours of free help. Use that help to get advice on how to sell your business. 2. Find all the adult shops near you, find out who owns them and try to to sell your business direct to the owner. Obviously you approach several of them and get them bidding against each other - that's how you fnd out the true value of your business. 3. Use a lawyer to act in the actual sale. You give him the passwords to the website, and he does not hand them over till the money has been paid in full. Like buying/selling a house really.
2016-05-23 09:01:58 · answer #5 · answered by ? 4 · 0⤊ 0⤋
Wholesalers are required by law in most cases to ask for the information that you have mentioned above for tax purposes.
They are not charging you any tax. you must collect the tax, and
submit this tax to your state.
There are many other reasons behind this questions that you ask.
If you would like more information please return my message.
2006-12-26 11:23:44 · answer #6 · answered by Skiop @ The Attic 1 · 0⤊ 0⤋
thats the rule. hey want you to join the club.... pay to play... all that crap. it also must be a tax thing
2006-12-26 11:15:39 · answer #7 · answered by Anonymous · 0⤊ 0⤋
sombody would have to pay taxes
2006-12-26 11:17:44 · answer #8 · answered by Chuck & Christy N 3 · 0⤊ 0⤋