How to open a wholesale account: what distributors check before they say yes

A wholesale account is a business-to-business account with a brand or a distributor. It gets you their price list and their wholesale prices, and it lets you order by the case. To get one, you fill in their application, and someone on their new accounts team decides whether you look like a real reseller.

This guide is about that decision, and how to make it an easy yes. It's part of the setup stage on the wholesale roadmap, next to the step-by-step start guide and the resale certificate guide. If you haven't picked suppliers yet, our guide to Amazon wholesale suppliers covers where to find them and how to vet them.

The four things distributors check before they say yes

A distributor isn't judging your product research or your Amazon plans on day one. It's checking whether you're a business it can invoice, ship to and collect from. These are the four things it looks at, roughly in the order a rep looks at them. They're also the four questions the distributor readiness checklist inside Apex asks before you apply.

1. A registered business with an EIN

Wholesale is business to business. The application will ask for a legal business name and a federal tax ID, and a distributor's invoices go to a business, not to a person shopping for a deal. Amazon's own guide to finding wholesalers says to have your business license and tax identification number ready when you contact one.

The federal tax ID a distributor asks for is an Employer Identification Number (EIN). You can apply on the IRS website in one sitting, and if the application is approved, the IRS issues the EIN right away. The IRS says you never have to pay a fee for an EIN, and it warns about websites that charge for one. If you're forming an LLC, the IRS says to form it with your state first, or your EIN application may be delayed.

Whether that business has to be an LLC is its own question, and the LLC section below answers it.

2. A resale certificate

A resale certificate is the signed form that lets a distributor sell to you without charging sales tax, because you're buying to resell. Without one on file, you're a retail customer paying retail tax, and that isn't a wholesale account. Many distributors won't release a price list until the certificate is in.

You get one by registering for sales tax in your state, then filling in your state's form or a multistate one for each supplier. Our resale certificate guide walks through the forms state by state, and what to do when your prep center is in a different state from you.

3. A website and an email on your own domain

In The Checklist lesson, Stef says distributors get hundreds of applications a month and filter out Gmail and Yahoo addresses. That's his experience, not every distributor's rule, but it's easy to see why: an application from a free webmail address, for a business with nothing to look at online, reads like someone trying wholesale from their kitchen table.

You don't need much. A single page that says who you are, what you sell, where you sell it and how to reach you is enough. The email matters more than the site: you@yourbusiness.com, with a full signature, not yourbusiness@gmail.com.

Two things to keep off that page. Don't say you're an authorized reseller of a brand until the brand has told you so in writing, and don't use brand logos you haven't been given permission to use. A rep who knows the brand will notice, and it ends the conversation.

If a distributor asks for your website and it isn't live yet, say so, and send a one-page company profile instead: your logo, your business name and address, what you sell and where. Stef suggests the same one-pager in that lesson, made in a design tool like Canva.

4. A business address that can receive freight

Wholesale orders arrive as cartons and pallets. Carriers charge more for residential deliveries, a pallet needs a loading dock or a liftgate, and many distributors simply won't ship an opening order to a house. A home address is a common reason a good application is turned down.

The usual answer is your prep center. A prep center's receiving address is a commercial address, and inventory arrives where it gets labeled and sent to Amazon anyway. Put it on the application as your shipping address, and tell the distributor if it's in another state, because that can change which resale certificate it needs. Our prep center guide covers how to choose one.

Your billing address is a separate line. Whatever you use, use the same one everywhere it appears: your state registration, your bank, your resale certificate and Seller Central. Amazon's seller registration guide asks for the exact registered business name and the address that appears on your business license.

Stef puts the last two checks this way:

"Having a business website is something that also increases your odds in setting yourself apart from the rest of the people applying for those wholesale accounts. And of course, having a commercial address, connecting with either a warehouse or a prep center for your inventory to be receivable."

From Stef's lesson (The Checklist, at 4:40)

One more number big distributors may ask for. In the same lesson, Stef says he sees more and more large distributors ask for a DUNS number on top of the resale certificate, to filter out businesses that aren't well established. That's his experience, not a universal rule. Dun & Bradstreet issues D-U-N-S Numbers at no cost, and says normal processing can take up to 30 business days, so request one early if big names are on your list.

Do you need an LLC?

This question has two answers, because it's really two questions: what Amazon requires, and what distributors ask for.

Amazon doesn't require one to sell. Amazon's registration guide says you don't need to be an LLC or registered business, or be otherwise incorporated, to sell in the Amazon store. You can register as an individual.

Distributors are a different story. Amazon's own wholesale guide says that to sell wholesale, you'll typically need a registered business like an LLC to buy products from a wholesaler, and you might also need a reseller license or permits. Stef makes the same point in The Checklist:

"When you want to resell products for Amazon selling, of course, you need to open accounts with wholesalers and distributors. Those companies do not wanna do business with an individual. They want to do business and work with other companies."

From Stef's lesson (The Checklist, at 0:49)

That's his experience opening accounts. It isn't true of every supplier. Some guides say a sole proprietorship can work:

In practice, read the application. Some distributors will open an account for a sole proprietor with a registered trade name, an EIN and a sales tax registration. Others ask for an entity on the form and stop there. Forming an LLC means the question never comes up.

What an LLC changes. The SBA's guide to choosing a business structure explains the difference. A sole proprietorship isn't a separate entity, so you can be held personally liable for the business's debts and obligations. An LLC protects you from personal liability in most instances, and its profits can pass through to your personal return, though members pay self-employment tax. If you'll be selling physical products to the public, that difference is worth raising with an accountant or attorney. The SBA also notes that fees vary by state and by business structure, so check what your state charges to form an LLC and to keep it active before you file.

If you form one, do it first. The order that keeps everything matching:

1. Form the LLC with your secretary of state, under the exact name you'll use everywhere.
2. Apply for the EIN in the LLC's name.
3. Register for sales tax and make your resale certificates in that name.
4. Open a business bank account in that name.
5. Open Seller Central with the same name and address, and apply to distributors.

Changing structure later means updating your state registration, your bank, every resale certificate, every supplier account and Seller Central, and the invoices you already hold will still carry the old name. It's a far smaller job in week one.

What a wholesale application asks for

The application might be a web form, a fillable PDF, or a "new account packet" a rep emails after your first message. (If you haven't sent that first message yet, our distributor email templates have one ready to copy.) Every distributor's form is different, but most ask for some version of the fields below. Here's what each one is really checking, and how to fill it in.

Leave nothing blank. A blank box reads as an unfinished application, and unfinished applications sit in a queue. Write "N/A" or "new business" where a field doesn't apply, and attach everything the form asks for in one email: the signed application, your resale certificate, and your EIN letter if they want it.

Read the terms before you sign. The terms of sale are part of the account, and three things in them matter more to an Amazon seller than anyone else:

• Where you may sell. Some distributors, or some of the brands they carry, don't allow sales on third-party marketplaces. Find that out now, not after your first order arrives.
• Pricing policies. Some brands set a minimum advertised price. Note which ones, because it limits how you price on Amazon.
• Personal guarantees. Some credit applications ask the owner to personally guarantee the account. That makes you personally responsible for what your business owes that supplier, which undoes part of what an LLC protects. Read it before you sign it.

References when your business is new

Applications often ask for two or three trade references (other suppliers you buy from) and a bank reference. A new business doesn't have trade references yet, and that's fine. Here's what helps.

Know why they ask. References are mostly about credit. A distributor checks them before it lets you pay after delivery. If you offer to prepay, the reference box usually matters much less, so say so: "New business, will prepay until we've built a history with you."

Give a bank reference. Your business bank can confirm the account exists and is in good standing. Put the bank's name, branch phone and your account contact on the form.

List any real supplier you've bought from. A smaller supplier you've ordered from on an invoice, even once, is a real trade reference. A friend's business you've never bought from is not, so leave it off.

Let your first account become your reference. Once you've paid a distributor on time for a few orders, that distributor is the reference the next application asks for. In The Game, Stef describes how that relationship grows:

"Yes, you do have to reach out to lots of companies, and you're going to get denied, and you're gonna keep being persistent and start building out relationship with suppliers and sales reps. But at some point, when you're spending money with these companies, your sales reps will become an asset to your business."

From Stef's lesson (The Game, at 5:12)

Minimum opening orders and how to start small

Most distributors set a minimum order quantity (MOQ). It can be a dollar amount, a number of cases, or a minimum per product, and the opening order minimum can differ from the reorder minimum. Some also have a separate, higher order size above which they pay the freight. Stef explains it in the Purchasing lesson:

"Maybe your supplier wants you to spend a minimum of fifteen hundred dollars. That's an MOQ. Maybe it's a case limit or a product limit. Every supplier works differently."

From Stef's lesson (Purchasing, at 1:37)

That figure is one example, not a typical number. Amazon's wholesale guide gives the same advice in its own words: find out whether the wholesaler requires a minimum order, ask about the cost per unit and any membership fees, and remember that the numbers are probably negotiable. It adds that if the price break only starts at a quantity far above what you want to buy, it might be a good idea to look at other suppliers.

How to start small with a big minimum:

• Ask before you apply. Put "What is your opening order minimum?" in your first email. It costs nothing to ask, and it saves an application to a supplier you can't afford yet.
• Ask whether it's per order or per product. A per-order minimum can be met across several products you've checked, which spreads your risk.
• Ask whether the first order can be smaller. Some suppliers lower the minimum for a new account, especially when you show you've done the research.
• Don't fill a minimum with unchecked products. A minimum met with products that don't sell is the most expensive way to open an account.

How many units of each product to buy is a separate question, and our guide to your first wholesale order covers it, from test quantities to the cash you need beyond the order itself.

Payment terms: prepaid first, net terms later

Expect to pay before your first orders ship. A new account usually pays by card, ACH or wire against a pro forma invoice or an order confirmation, and the distributor ships once the payment clears. Ask which methods it takes, and whether paying by card carries a fee.

What net terms mean. "Net 30" means the invoice is due 30 days after its date, instead of before the goods ship. That's credit, so a distributor gives it to accounts it trusts: usually after a credit application, references, and a few orders paid on time. Asking for terms on day one is fine, but a "prepay for now" answer isn't a rejection. It's the normal starting point.

Why terms matter more on Amazon. When you prepay, your money is out from the day you pay until Amazon pays you for units that have sold. Net terms shorten that gap, and on a growing business that can be worth more than a small discount. Our cost to start guide covers how much cash to keep in reserve for it.

When to ask. Once you've placed a few orders and paid on time, ask your rep what it would take to move to terms. Our guide to negotiating with distributors covers terms alongside price, minimums and freight.

Questions to ask before your first order

An approved account isn't a reason to buy yet. These questions protect you on Amazon as much as with the distributor, and the answers belong in writing.

1. Are you an authorized distributor for these brands? Ask which brands they buy directly from the brand, and whether they can show it. Our guide to the letter of authorization explains what that proof looks like and who can issue it.
2. Do any of these brands restrict online or Amazon sales, or set a minimum advertised price? Ask for the list in writing.
3. What's the opening minimum, and the reorder minimum? And at what order size do you pay the freight?
4. Do you sell by the case only? Get the case pack for every product, and ask for the price list as a spreadsheet with UPCs, so you can analyze the price list line by line.
5. Will you ship to my prep center, and how long does it take? Ask for the lead time from order to delivery, and the cutoff time for same-day shipping.
6. What will the invoice show? It should carry your business name and address exactly as they appear in Seller Central, an itemized list of products and the date. See the box below.
7. What happens with damages, shortages and returns? And for dated products, how much shelf life is left when they ship?
8. How do you want to be paid, and what would it take to get terms later?

The invoice point is the one beginners miss. The invoices from this account are what you'll show Amazon when you apply to sell in a gated category or answer an authenticity question, so a mismatched name on the account becomes a problem on every invoice after it. Our ungating guide covers the rest of what Amazon looks for.

Keep the answers with the account. Every supplier ends up with a rep, an account number, a minimum, a payment method and a lead time, and they're easy to lose across email threads. A spreadsheet works. If you use Apex, the Vendors page in Apex Blue holds each supplier's rep and requirements in one record, and its Pipeline tracks every supplier you contact from first email to approved or denied.

Printable checklist

Print this, or copy it into your notes. Work down the first list before you apply anywhere, and the second before your first order.

Doing it on a small budget

Most of this list costs less than people expect, and the order you do it in matters more than the money.

1. Get the EIN first. The IRS doesn't charge for it.
2. Register the business. Filing fees and annual fees vary by state, so check your secretary of state's site before you pay a formation service.
3. Register for sales tax. Some states charge nothing to register and some charge a fee. The resale certificate guide links each state's page.
4. Open the business bank account, so supplier payments and Amazon payouts stay out of your personal account.
5. Buy the domain and set up one mailbox. It's a small monthly cost next to inventory, and it changes how every application reads.
6. Build the one-page site yourself. Any website builder will do. Plain and accurate beats polished.
7. Use your prep center's address for shipping, rather than renting an office.
8. Request the DUNS number, which Dun & Bradstreet issues at no cost, if you're aiming at big distributors.

Then apply in small batches, to distributors whose minimums fit your budget, and keep going when one says no. A no is often a lead, as Stef says in Finding Suppliers:

"And if the MOQ is high, again, don't be discouraged. You ask them, 'Who do you sell to that I can buy?' And they were more than happy to give you a list of their wholesalers or distributors."

From Stef's lesson (Finding Suppliers, at 12:40)

That's his experience, and not every company will answer. But asking costs one email, and our email templates include a version of it.

To learn the whole setup step by step, the Checklist and Professional Setting lessons are part of Apex University, which comes with a free Apex account: nine lessons, no card. And to see which US distributors carry which categories before you apply, the Distributor Vault lists them by name. Every subscription, trial included, opens 3 US wholesale distributors from the Distributor Vault when it starts and 3 more each month. Yearly billing, on Starter and Pro, opens the whole Vault at once.