WholeLife Matrix: Financial Viability / Markteing / Sales
“Everyone Lives by Selling Something.”
— Robert Louis Stevenson
Selling goods at wholesale prices, in addition to retail, can help to increase your profits. When you sell wholesale, you leverage the resources of other retailers, such as their customer base and website traffic. Perhaps you have created a product and want to sell it to retailers. If you want to sell wholesale, you need to create a wholesale application and contract. In this article, we discuss some of the legal terms you need to become familiar with.
Federal Tax ID Number
When you are a wholesaler, and a retailer applies with you to resell your products, you should ask them for their Tax ID number, which is a number that every business must have for paying taxes. These numbers are given by the federal government for business and are used by tax agencies such as the IRS.
In addition to asking resellers for their Tax ID, you should also ask for their resale number or a copy of their resale permit. A state government is the entity that gives a resale license, certificate, or permit that has the resale number on it. Some may call it a “State Sales Tax Exempt Certificate”, or “Reseller Permit”. Sales taxes are only meant to be paid by the “end user” of a product, so if a business buys a product from you to resell it, they are not required to pay sales tax. Having a resale number would allow the business to not have to pay this tax.
Under a manufacturer warranty, the manufacturer of a product guarantees that the condition of its product will meet certain standards. It outlines terms for repairs or exchanges if the product does not meet the standards.
A common type of manufacturer warranty is a warranty for your vehicle, for its parts, systems, or components for a certain amount of time or mileage.
You may decide to include an express warranty in your wholesaler contract or on your product packaging. An express warranty warrants that a product will provide a particular amount of reliability and quality, and is expressed clearly in writing or verbally. If the product does not meet the standards of the warranty it will be repaired or replaced at no extra charge by the wholesaler or manufacturer. The words “warranty” or “guaranteed” don’t necessarily have to appear on the product packaging. For example, a manufacturer might print “lasts for up to 100 uses” on its packaging.
Implied Warranty of Merchantability
Many products are automatically covered by the implied warranty of merchantability, which means that they must work as claimed. For example, it is implied that a blender should work to blend food. If the blender does not blend, then the product is not adhering to the implied warranty of merchantability. The warranty of merchantability is automatically in effect for products unless it is disclaimed expressly in the sale by name or the phrase “with all faults” or “as is”.
Implied Warranty of Fitness for a Particular Purpose
Under the Implied Warranty of Fitness for a Particular Purpose, if a manufacturer, seller, or provider knows or has reason to know that a buyer is purchasing a product to be used for a certain purpose, and the buyer relies on the seller’s expertise or judgement for picking the product, then the seller is giving a guarantee that the item is good for that purpose.
However, in industrial purchases, the buyer cannot claim that he or she relied on the seller’s judgement if the buyer gives detailed specifications or if the seller is selling the product “as is”.
Want to know more? We are excited to offer our Sales2Win course. This course will distinguish you as someone who consistently maximizes their sales and achieves top results.