If you’re launching your own products-based business, your first step is to take care of the legal aspects. When you plan to sell goods like decorated t-shirts online or in a retail store, you must register your company and obtain the correct licenses and permits. No matter what state you live or do business in, you’re required to get a wholesale license. If you’re planning to resell wholesale products like t-shirts, hoodies or hats, you’ll need this license. We’ll break down everything you need to know about getting your wholesale license so you can build your dream business!

The good news is that it’s easy to score a wholesale license, and you’ll enjoy some business benefits along the way. However, you should also be aware that you can purchase blank t-shirts, whether you need one or a bulk supply, from online wholesalers like Threadsy at lower prices without a wholesale license!

If you’ve been on Facebook or Etsy lately, you’ve probably noticed lots more people have launched their own product-based e-stores. Since so many of us are comfortable browsing and buying online, we’re more empowered to start our own online shops. The best part? Anyone can easily start their own decorated t-shirt reselling business.

There are lots of reasons why getting your wholesale license is an important part of launching your t-shirt reselling business. When you’re licensed as a wholesaler, you can work with other wholesalers, get the lowest prices on t-shirts you want to resell and then avoid paying sales tax on those items even when you’re buying in bulk. The exact laws and process for getting a wholesale license might vary depending on where you live. However, obtaining the required licenses ensures that you’re running your apparel-selling business correctly and legally.

However, not all wholesalers, like Threadsy, require a t-shirt shop owner to show proof of their wholesale license before they place an order for blank t-shirts, hoodies or other garments. You’ll enjoy peace of mind when you have a wholesale license, so you can work with any providers you choose. Many wholesalers do require you to show your wholesale license before ordering. Plus, many states require you by law to have a wholesale license to legally conduct transactions. If you don’t have the license (and your state requires them), you can face penalties and legal issues.

If you’re a creator or hobbyist, until now, you might have been buying your blank t-shirts at big box stores at higher prices and lower inventory. When you buy blanks from Threadsy, you’ll enjoy lower prices, deeper inventory and fast delivery. You can enjoy the same discount rates up to 15% that t-shirt resellers receive when they buy their blanks in bulk from us. Similarly, if you’re a small business owner who wants to outfit your staff in t-shirts or polos, you can also order from Threadsy without a wholesale license. You’ll also enjoy lower prices and a deeper inventory.

Next, we’ll break down everything you need to know about getting your wholesale license so you can build your business!

If you plan to resell t-shirts online, from your home-based business or in a brick and mortar store, you do need a wholesale license to buy wholesale goods and resell them. In some states, you’re not required to have a wholesale license if you’re selling below a certain amount of transactions per year. However, it’s important to check your state’s requirements for reselling wholesale apparel and other products legally, since the laws vary. 

When you have a wholesale license, you’re legally allowed to purchase products in bulk from wholesale suppliers without paying sales tax on the items. It makes good business sense to obtain your wholesale license if you’re a t-shirt reseller, since you know that you’re in full compliance with local, state and federal laws. (Plus, you’re saving a lot of money on taxes!)

A wholesaler’s license is also called a reseller’s permit, seller’s permit, a resale ID, wholesale ID or a retail ID. Before you apply for your wholesale license, you’ll need to set up some other aspects of your new business. You’ll register your business with the IRS and you’ll need your Employer Identification Number (EIN). Plus, you’ll need a sales tax license and a state tax ID number, which allows you to charge taxes to your buyers, pay state taxes and pay staffers. 

Depending on the states you want to do business in, you might also need to apply for wholesale licenses in those states. Remember, the IRS requires you to obtain a wholesale license to legally do business and to be in compliance with your local and state laws. When you obtain your wholesale license, you’re ensuring that your new retail t-shirt company does business legally and responsibly.

We’ve got some great news for if you’re not quite ready to launch a business. You can also purchase wholesale goods without a wholesale license from some online retailers like Threadsy. In fact, anyone can shop with Threadsy, since we don’t require any business documentation, wholesale license or minimum purchase to order. We do collect sales tax on all of our orders.

We’re all about empowering you to do what you truly love. That means, if you want to order blank t-shirts to decorate for your family’s next vacation, we’re your destination! You can enjoy the same wholesale pricing and bulk discounts on our site if you’re a creator or hobbyist, without needing to own a business with the required licenses. Or, if you’re a small business owner who wants to purchase polo shirts for your employee uniforms, you’ll also get the wholesale rate and there’s no minimum quantity you need to purchase.

Depending on what state your business is located in, wholesale license fees can range from $3,000 to $10,000, depending on your state and type of business you’re launching. The average cost of a wholesale license comes in at $6,500. You can visit the IRS website or contact the agency directly to learn more about what specific licenses you need to run your business legally.

When you’re reviewing your startup costs to launch a t-shirt business, things really start to add up. Those can include t-shirt designs, decorating supplies, blank t-shirts, decorating equipment, packaging materials, office supplies and advertising costs. You might also look to hire a graphic designer to help with your t-shirt designs or a website designer to create your website. Part of those costs include obtaining the correct licenses you need to sell t-shirts legally.

If your startup costs are mounting, some t-shirt shops opt to partner with a third-party fulfillment or print-on-demand company that prints and ships the t-shirts on their behalf. That way, you don’t need to invest in apparel inventory, decorating supplies, imprinting equipment or packaging. (It’s important to know that depending on your state laws, you likely need a t-shirt wholesaler license to sell via third-party fulfillment sites, so do your research.) You can also look at applying for a small-business grant if you qualify, or looking into a commercial bank or Small Business Administration (SBA) loans. When you open your business bank account, you can apply for a business credit card that can help with your upfront costs.

However, if you’re considering opening a t-shirt business, buying from a wholesaler without a license can help when you’re still in the planning stage. You’re most likely experimenting with different graphics and printing methods on t-shirts while you decide if this is for you. You’ll save money when you purchase blank garments from an online seller like Threadsy at wholesale prices. If you can purchase orders in bulk, you’ll also benefit from bulk discounts and free shipping.

If you’re selling decorated apparel from your home-based business, via a retail store IRL or online, you’ll need to register as a legal business and obtain your wholesale license. Laws and requirements vary from state to state, for different types of businesses. That’s why it’s a good idea to first contact the IRS to learn exactly what you need to do to legally operate your business. Remember, one of the main benefits to getting a wholesale license is not having to pay sales tax on bulk orders, which results in a cost savings every time you purchase inventory in larger quantities. There are three key steps to getting your business registered and set up correctly with a wholesale license.

Registering your business is your first key step to setting up a business that’s recognized as a legal business entity by the IRS and the government. Before you do this, you should consult with an attorney or an accountant to determine the best legal structure for your business. These structures include a sole proprietorship, a partnership, a corporation or a limited liability company. The business entity type that you select will determine how much you’ll pay in taxes and what laws apply to your company.

Next, you’ll contact the IRS to apply for an Employer Identification Number (EIN), also known as a Federal Tax Identification Number (FTID). This identifier registers your company as a business that can legally sell goods and hire employees. This is the first step you need to complete before moving on to applying for your wholesale license, so that you can buy wholesale goods and resell them. An EIN ties all transactions to your business. Be aware that if you conduct business without an EIN or FTID, you can face severe penalties, fines and legal issues. It’s free to apply for an EIN. The process can take anywhere between two to five weeks.