The business models of wholesale suppliers are extremely diverse so there's not one answer to this question. With that said, there are a few things that may be a hint.

• Requesting your business information / sales tax forms - Legitimate wholesale suppliers will almost always ask for this information from you. They do this to verify your business and also verify the legality of them selling to you without charging sales tax. If you buy items to sell to resell, you should not have to pay sales tax.
• Discount Retailer versus Wholesale Supplier - It is our experience that most companies that advertise online as "wholesale suppliers" are not truly a wholesale distributor. Most are retailers or brands that offer a discount off of retail to your company. Some of these can be great suppliers, but generally, you will pay more than buying directly from a manufacturer or distributor.
• Monthly Subscriptions - Generally speaking, a true wholesale supplier will not require you to pay a monthly subscription to access their products or data. Please note that this may not be true for dropship suppliers. Dropship requires additional maintenance, support and may require software upkeep. These costs are occasionally recouped by B2B suppliers via monthly charges or subscriptions.

There are two factors that come into play when considering this question...

• Are you an established retailer that can buy large quantities of a single product? For example, if you can purchase and sell 600-1200 of the same t-shirt in a month or two consistently, it may make sense for you to approach the brand directly. You may qualify to have merchandise sent to you directly from the manufacturing facility or t-shirt printer. This saves the manufacturer money and allows them to share some of the savings with you.
• If you're a smaller retailer - Establish any relationship you can with your wholesale supplier. Grow sales and show the supplier that you can consistently place orders. Being consistent may be enough for you to open up conversations about discounts or promotions due to the manufacturer considering your overall value to them.
• If you are buying from wholesale suppliers on MerchShowroom.com, you are getting their best wholesale pricing. We do not make our money from retailers (unlike other wholesalers, marketplaces and distributors). We make our money from manufacturers and suppliers.

B2B suppliers ask for resale certificates and sales tax IDs to stay in compliance with U.S. tax laws. In addition, it allows the wholesaler to verify that you have a legitimate retail business that's active and registered with your state or local government. Having resale certificates also allows wholesale suppliers to sell to you without charging you state sales tax. Without this information, the seller may be liable for your sales taxes if they are audited.

Understanding the various terms associated with sales taxes can be confusing. Here’s an explanation of each:

• Sales Tax ID: This is a unique number issued by a state to a business that allows it to collect and remit sales tax. It may also be called a seller's permit or a sales tax permit.
• Employer Identification Number (EIN): Issued by the federal government (IRS), this number is used to identify a business entity for tax purposes. It's similar to a Social Security number but for businesses.
• Resale Certificate: This certificate allows a business to purchase goods without paying sales tax if the goods are intended to be resold. It's a document that proves a business can buy products tax-free.
• Sales Tax Registration: This is the process of applying for a sales tax ID. A business must register for sales tax with a state's tax authority to legally collect sales tax from customers.
• Sales Tax Exemption: This refers to a status where a transaction is not subject to sales tax. Certain nonprofits and governmental organizations, for instance, qualify for sales tax exemption on purchases related to their functions.

The distinctions are crucial as each serves different roles in tax administration and compliance. If you're a retailer, for example, you'll need a sales tax ID to collect sales tax and a resale certificate to buy products for resale without paying sales tax upfront.