How to Start a Wholesale Business: Licenses, Pricing, and Delivery

To start a wholesale business, choose a product line and the buyers you’ll sell to, register the business, get a sales tax permit so you can buy and sell for resale, set prices that leave margin for both you and your buyers, and build a delivery operation your accounts can count on. Food wholesalers and distributors have extra steps: FDA facility registration, and federal rules for transporting food.

This guide covers each step, with the food-specific rules where they apply.

Key takeaways

• Wholesale means selling to businesses that resell, use, or serve your products, not to consumers.
• A sales tax permit and resale certificates let you buy inventory and sell to resellers without collecting sales tax on those sales.
• Facilities that make, pack, or hold food for US consumption register with the FDA, unless they mainly sell to consumers (FDA; 21 CFR 1.226).
• The FDA’s sanitary transportation rule covers food shippers, loaders, carriers, and receivers, with an exemption under $500,000 in average annual revenue (FDA).
• Reliable delivery keeps wholesale accounts. Standing orders on fixed routes are the norm.

Step 1: Choose your products and buyers

Wholesale businesses come in a few forms:

Model	What you do	Example
Producer selling wholesale	Make your own product and sell it to businesses	A bakery supplying cafés, a coffee roaster supplying offices
Distributor	Buy from producers and resell to businesses	A local distributor carrying several snack and drink brands
Specialty wholesaler	A narrow category with expertise	Flowers to florists, specialty foods to grocers

Pick a category where you can reach buyers directly. For a new food distributor, independent grocers, cafés, and restaurants are easier first accounts than chains, which often buy through large distributors.

Step 2: Register the business and get tax IDs

Set up the company before you take a first order. The SBA’s checklist runs from choosing a location, structure, and name through registration, tax IDs, licenses, a business bank account, and insurance (SBA). Apply for your EIN directly with the IRS, which never charges for one (IRS).

Step 3: Get a sales tax permit and use resale certificates

In states with sales tax, a wholesaler usually registers for a sales tax permit. Two documents then do most of the work:

• When you buy inventory to resell, you give your supplier a resale certificate so they don’t charge you sales tax.
• When you sell to a reseller, you collect their resale certificate so you don’t charge them.

Texas describes a resale certificate as “the seller’s evidence as to why sales tax was not collected on that transaction,” and requires the buyer’s Texas taxpayer number on it (Form 01-339). A seller must make sure it’s properly completed, and shouldn’t accept one if it has reason to believe the purchase isn’t for resale (Texas Comptroller). Other states have their own forms and rules, so check with your state’s tax agency.

Keep every resale certificate on file. If you can’t produce one in an audit, the sale may be treated as taxable.

Step 4: Food wholesalers, register with the FDA

The FDA requires facilities that manufacture, process, pack, or hold food for consumption in the US to register, and to renew every other year (FDA). A warehouse that holds food for distribution counts.

Retail food establishments and restaurants are exempt (21 CFR 1.226). The retail exemption applies only when direct sales to consumers are worth more than sales to all other buyers, and businesses don’t count as consumers (21 CFR 1.227). A business that sells mainly wholesale doesn’t qualify.

Your state may also license food manufacturers or warehouses. Texas, for example, requires a food manufacturer license for firms that make or package food for wholesale, and for firms that put their name on a product a co-packer makes (Texas DSHS).

Food transport rules

The FDA’s sanitary transportation rule applies to shippers, receivers, loaders, and carriers moving food by motor or rail vehicle. Vehicles and equipment must be suitable, cleanable, and “capable of maintaining temperatures necessary for the safe transport of food.” Businesses with less than $500,000 in average annual revenue are exempt (FDA).

Step 5: Set wholesale prices

Work backward from the shelf price:

1. Find the retail price your product will sell for.
2. Subtract the retailer’s margin. Ask buyers what margin they need in your category; it varies widely.
3. If a distributor sits in between, subtract their margin too.
4. Check what’s left covers your cost and margin, including delivery.

If the numbers don’t work at the retail price the market will bear, change the product, the pack size, or the channel before you sign accounts.

Delivery is a real line in wholesale pricing. Set a minimum order per delivery, or price delivery into each case, so small orders don’t lose money.

Step 6: Build your delivery operation

Wholesale accounts care about one thing more than price: whether the order arrives complete, inside their receiving window, every time.

• Standing orders on fixed days let you plan routes and inventory.
• Receiving windows are often early morning. Record each account’s window, entrance, and contact.
• Proof of delivery with a photo and timestamp settles disputes about short or missing cases.
• Multi-stop routes spread delivery cost across accounts on the same day.

Our B2B delivery guide covers what business receivers expect, our guide to planning a multi-stop delivery route covers sequencing, and our direct store delivery guide covers getting onto grocery shelves.

Your own trucks or a courier?

A full route every weekday can justify your own van and driver. Our guide to in-house delivery versus a courier service works out one driver and one cargo van at about $76,000 a year before fuel. A few accounts, or volume that changes by season, usually costs less per delivery with a courier.

We run scheduled and recurring wholesale routes in 100 US metro areas, including a courier service in Cincinnati, Milwaukee, and St. Louis, in vehicles up to cargo vans. Every stop has live tracking and a photo at drop-off. See our wholesale delivery service and food and beverage delivery, or price a route in the delivery cost calculator.

Frequently Asked Questions

What do I need to start a wholesale business?

A registered business with tax IDs, a sales tax permit in states that have sales tax, resale certificates from your buyers, any state licenses for your product category, and a way to deliver orders. Food wholesalers usually also register with the FDA.

How do I become a food distributor?

Choose a category and the producers you’ll carry, register the business, get a sales tax permit, register your warehouse with the FDA, follow federal food transport rules, and start with accounts you can reach directly, such as independent grocers, cafés, and restaurants.

Do I need a license to sell wholesale?

Usually a sales tax permit and resale certificates, plus any state license your product needs, such as a food manufacturer license. Check your state’s tax agency and health department.

Does a food wholesaler need FDA registration?

Generally yes. Facilities that manufacture, process, pack, or hold food for US consumption must register. The retail exemption applies only to businesses whose direct-to-consumer sales exceed their sales to other buyers.

How do wholesalers deliver to their accounts?

Most run standing routes on fixed days, with their own vans or a courier, timed to each account’s receiving window, with proof of delivery at each stop.

The Bottom Line

A wholesale business runs on paperwork and routes. Get your tax permit and keep every resale certificate. If you handle food, register with the FDA and check the transport rule. Price backward from the shelf so every party, including delivery, gets paid. Then win accounts by arriving complete and on time, on standing routes. To price a route, use the delivery cost calculator.