Resale Certificates for Ecommerce Wholesale Buying: The Complete Guide
Buying wholesale is the foundation of most ecommerce businesses. Whether you sell on Amazon, eBay, Shopify, Walmart Marketplace, or your own website, your profitability depends on getting inventory at the lowest possible cost. A resale certificate is one of the most direct ways to reduce that cost: it eliminates sales tax on every wholesale purchase you make for resale.
On $100,000 in annual wholesale purchases in a state with 7% sales tax, a resale certificate saves you $7,000. That is money that goes straight to your bottom line or funds more inventory.
Why Ecommerce Sellers Need a Resale Certificate
The Basic Mechanics
When you buy products from a wholesale supplier, that supplier is required to charge you sales tax unless you provide a valid resale certificate. The certificate tells the supplier that you are purchasing the goods for resale, not personal use, and shifts the tax collection obligation to you (you collect tax from your end customers instead).
Without a certificate, you pay sales tax on your purchase AND your customer pays sales tax on their purchase. That is double taxation of the same goods. The resale certificate prevents this.
Beyond Tax Savings: Wholesale Access
Many wholesale suppliers, distributors, and manufacturers will not sell to you at all without a resale certificate. It is their way of verifying that you are a legitimate business, not a consumer trying to get wholesale prices.
Having your certificate ready opens doors to:
- Manufacturer direct accounts
- Wholesale distributors
- Trade show purchasing
- Buying group membership
- Liquidation and closeout deals at wholesale pricing
Setting Up Your Resale Certificate
Step 1: Register for a Sales Tax Permit
Before you can get a resale certificate, you need a sales tax permit (also called a seller's permit, sales tax license, or certificate of authority, depending on your state).
Register in the state where your business is located. If you have economic nexus in other states (more than $100,000 in sales to that state's residents in most cases), you may need to register in those states as well.
What you need to register:
- Federal EIN (or SSN for sole proprietors)
- Business legal name and DBA
- Business address
- Entity type (LLC, sole proprietorship, corporation, partnership)
- Description of products you sell
- Estimated monthly sales volume
Most states offer free online registration. Processing takes 5 to 14 business days in most states.
Step 2: Complete Your State's Resale Certificate Form
Download and complete the resale certificate form for your state. Some states use a dedicated resale certificate form. Others use a general exemption certificate where you check "Resale" as the reason.
States in the Streamlined Sales Tax (SST) agreement accept a uniform SST certificate, which simplifies multi-state compliance.
Step 3: Provide the Certificate to Every Supplier
Give a completed certificate to every wholesale supplier, distributor, and vendor you buy from. Most suppliers have a process for this:
- Online suppliers: Upload the certificate to your account settings
- Trade show vendors: Bring printed copies to the show
- Local suppliers: Hand-deliver or email a scanned copy
- Import brokers: Provide with your first order
Apply for Your Resale Certificate
Wholesale Sourcing Channels for Ecommerce
Domestic Wholesale Distributors
Wholesale distributors buy from manufacturers and sell to retailers. They typically require a resale certificate, a business license, and a minimum order amount.
| Distributor Type | Examples | Minimum Order |
|---|---|---|
| General merchandise | SanMar, S&S Activewear, Kole Imports | $100 to $500 |
| Electronics | Ingram Micro, D&H, WYNIT | $250+ |
| Health and beauty | BeautyJoint, Cosway, FragranceNet wholesale | $100 to $300 |
| Toys and games | U.S. Toy, Rhode Island Novelty | $50 to $250 |
| Home and garden | Evergreen Enterprises, Alpine Corporation | $100 to $500 |
| Closeout/overstock | Liquidation.com, BULQ, Via Trading | Varies |
Manufacturer Direct
Buying directly from manufacturers typically offers the best pricing but requires higher minimum orders and often a proven sales track record. Start with distributors, build your sales history, then approach manufacturers when your volume justifies it.
What manufacturers want to see:
- Resale certificate (required)
- Sales history or projected volume
- Website or marketplace presence
- Business plan or product strategy
- References from other suppliers
Trade Shows
Trade shows are one of the best places to discover products, meet suppliers, and negotiate pricing face-to-face. Major trade shows for ecommerce sellers include:
| Trade Show | Focus | Location |
|---|---|---|
| ASD Market Week | General merchandise, variety | Las Vegas, twice yearly |
| Canton Fair | Chinese manufacturers, all categories | Guangzhou, China, twice yearly |
| NY NOW | Gift, home, lifestyle | New York City |
| International Home + Housewares Show | Home products | Chicago |
| National Hardware Show | Hardware, tools, outdoor | Las Vegas |
| Natural Products Expo | Organic, natural, health products | Anaheim and Baltimore |
Bring multiple copies of your resale certificate to every trade show. Vendors will request it before offering wholesale pricing or taking tax-exempt orders.
Import and Overseas Suppliers
If you source products from overseas (China, India, Vietnam, etc.), the sales tax dynamics are different.
Goods imported from overseas are not subject to state sales tax at the point of import. You pay customs duties and fees to US Customs, but state sales tax does not apply to the import transaction itself. You do not need a resale certificate for international purchases.
However, you DO need a resale certificate if:
- You buy imported goods from a US-based importer or distributor (they will charge you sales tax without a certificate)
- You use a domestic fulfillment center or warehouse that charges sales tax on services
- You buy packaging, labels, or other supplies domestically for use with your imported products
Liquidation and Closeout
Buying liquidation merchandise (customer returns, overstock, shelf pulls) is a popular sourcing strategy for ecommerce sellers. Major liquidation platforms include:
- Liquidation.com (B-Stock managed)
- BULQ (from Optoro)
- DirectLiquidation.com
- Via Trading (truckload and pallet)
- Quicklotz (smaller lots)
Most liquidation platforms require a resale certificate to purchase. Some charge sales tax if you do not have one on file. The savings add up quickly: a $2,000 liquidation pallet in a 7% state costs an extra $140 in tax without a certificate.
For more on liquidation buying, see our liquidation pallets guide.
Platform-Specific Considerations
Amazon Sellers (FBA and FBM)
If you sell on Amazon, you need a resale certificate for your wholesale inventory purchases. Amazon itself does not issue resale certificates to sellers. You get your certificate from your state and provide it to your suppliers.
Amazon Tax Exemption Program (ATEP): If you buy supplies or inventory through Amazon Business, you can enroll in ATEP to have your resale certificate applied to qualifying Amazon purchases automatically.
For a detailed guide, see our Amazon sellers resale certificate guide.
eBay Sellers
eBay does not require sellers to have a resale certificate, but your wholesale suppliers will. Register your certificate with each supplier you buy from. eBay collects and remits sales tax on behalf of sellers in all states that have marketplace facilitator laws.
See our eBay sellers guide for more details.
Shopify Store Owners
Shopify does not collect or remit sales tax on your behalf (unlike Amazon and eBay). You are responsible for collecting and remitting sales tax in states where you have nexus. Your resale certificate covers the wholesale purchase side; you handle the retail collection side through Shopify's tax settings.
See our Shopify store owners guide.
Walmart Marketplace Sellers
Walmart Marketplace collects and remits sales tax on behalf of third-party sellers in states with marketplace facilitator laws. Your resale certificate is for your wholesale purchasing side.
See our Walmart Marketplace guide.
Multi-State Nexus and Registration
Ecommerce sellers frequently have economic nexus in multiple states because they ship to customers nationwide. This has two implications:
1. You May Need to Register in Multiple States
If your sales exceed the economic nexus threshold in a state (typically $100,000 in annual sales to that state's residents), you must register, collect, and remit sales tax in that state. Most states have adopted this threshold following the 2018 South Dakota v. Wayfair Supreme Court decision.
2. You Can Use Resale Certificates in Those States
Once registered in a state, you can issue resale certificates to suppliers in that state. This is relevant if you buy from suppliers in multiple states.
For businesses in SST member states, the SST certificate simplifies this. One form works across all member states.
For a full breakdown of nexus rules, see our economic nexus guide and sales tax nexus guide.
What You Can and Cannot Buy Tax-Free
Tax-Exempt Purchases (Resale Inventory)
| Purchase | Tax-Exempt? |
|---|---|
| Products you buy to resell (any category) | Yes |
| Packaging materials (boxes, mailers, tape, poly bags) | Yes (most states exempt packaging that transfers to the buyer) |
| Labels and inserts included with the product | Yes |
| Gift wrapping materials (if provided to the customer) | Yes |
Taxable Purchases (Business Use)
| Purchase | Tax-Exempt? |
|---|---|
| Shipping labels (postage) | Not subject to sales tax in most states |
| Printer and computer for your business | No (business equipment) |
| Storage shelving and bins | No (business equipment) |
| Office supplies | No |
| Software subscriptions (inventory management, accounting) | Depends on state |
| Photography equipment for product photos | No (business equipment) |
The Shipping Materials Question
Shipping boxes, poly mailers, tape, and packing materials are generally exempt from sales tax because they are transferred to the customer as part of the sale. This is true in most states, but verify with your specific state's rules. Some states require the packaging to be "necessary for delivery" to qualify for the exemption.
Common Mistakes Ecommerce Sellers Make
Not Getting a Resale Certificate at All
Many new ecommerce sellers start buying inventory at retail, paying full sales tax, and eating that cost. Even if you start small, register for a sales tax permit and get your resale certificate from day one.
Using the Certificate for Business Supplies
A thermal label printer, shipping scale, or ring light for product photography are business tools, not resale inventory. Do not use your resale certificate for these purchases.
Not Registering in Nexus States
If you have economic nexus in 15 states but are only registered in your home state, you have a compliance problem. Register in every state where you meet the nexus threshold.
Assuming Marketplace Tax Collection Covers Everything
Amazon, eBay, and Walmart collect sales tax on marketplace sales, but this does not cover direct sales from your own website or other channels. If you sell through Shopify, your own website, or at in-person events, you are responsible for collecting tax on those sales.
Not Keeping Certificate Copies
Keep copies of every resale certificate you issue to every supplier. If a supplier is audited and your certificate is missing or invalid, you may be liable for the tax.
Real Savings by Business Size
| Annual Wholesale Purchases | Tax Saved (7%) | Tax Saved (8%) |
|---|---|---|
| $10,000 | $700 | $800 |
| $25,000 | $1,750 | $2,000 |
| $50,000 | $3,500 | $4,000 |
| $100,000 | $7,000 | $8,000 |
| $250,000 | $17,500 | $20,000 |
| $500,000 | $35,000 | $40,000 |
For a growing ecommerce business purchasing $100,000 in wholesale inventory, $7,000 in annual tax savings is significant. That covers marketing budget, additional inventory, or a meaningful contribution to profit.
Get Your Resale Certificate Today
Your resale certificate is the entry point for wholesale buying, trade show access, and lower inventory costs. Every dollar you save on purchasing goes directly to your margins.
Apply for Your Resale Certificate
Related Articles
- Resale Certificate for Amazon Sellers - Amazon-specific guidance for FBA and FBM sellers.
- How to Set Up a Wholesale Business - From finding suppliers to opening trade accounts.
- How to Calculate Sales Tax for Ecommerce - Understanding rates, nexus, and tax automation.