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Wholesale to the trade question


#1

Fellow Orchidians, I’m lucky enough to live near both Philadelphia
and NYC, which have robust “jeweler’s rows” and have a question.
Many of the very intriguing suppliers post big “wholesale only” and
"wholesale to the trade" signs, thereby discouraging retail and
casual buyers from their shops. As my jewelry designing has been
growing, I’m now getting more interested in buying matched sets of
stones, specialty items, etc., that either aren’t available from
retailers, or that would be priced in a way that could drive up my
prices and/or drive down my margin to an insupportable point.

My question is actually pretty simple – how do you “break the
barrier” of entry to these wholesalers to the trade? What
documentation do they expect? Do they work only by appointment?
How significant is the price differential, typically, between
wholesale to the trade and retail?

Also, for anyone in the Philadelphia area, are there any places
you’d especially recommend for buying stones (low-end matched stones
to start with, like turquoise, malachite, garnet, etc.)? (I like to
see them in person, rather than buy online for now, since I’m still
pretty new at this. I’d particularly like to feel comfortable that
I’m going to someone with an excellent reputation where I’m not
going to get taken advantage of.

Thanks!
Karen Goeller
@Karen_Goeller


#2

Hi Karen,

This suggestion isn’t specific to Philly or NYC, but I’d recommend
wholesale gem shows when they come to your area. There is a circuit
of shows put on by G&LW (Gem and Lapidary Wholesalers), and they
travel all over the country. They require proof of a business (i.e.,
resale certificate) in order to gain access, but I don’t think
they’re very diligent about what kind of business.

You may experience the graying of the lines between wholesale and
retail, as Gerry Galarneau has been discussing, but you’ll get access
to an abundance of great material in a business-to-business
atmosphere.

Lapidary journal usually has an advertisement with their show
schedule, and you might be able to find them with a search on the
’net.

All the best,

Dave

Dave Sebaste
Sebaste Studio and
Carolina Artisans’ Gallery
Charlotte, NC (USA)
dave@sebaste.com


#3

Hi Karen,

To buy wholesale you will need to register your business name. This
can be done at your county court house. However you should check
with your state on the proper procedure for registering a business.
Next you need to apply for a state sales tax number. In addition the
wholesale companies will request to see a business card which should
have your business name, telephone number and maybe an address.
Sometimes they will also want to see a business check. A business
checking account can only be opened after you receive your papers
for your licence or registering your name. There are some wholesale
places that may require references of business’s that you have dealt
with, however generally a license or registered name and business
card is usually enough.

As far as price, this is where it takes time in shopping around to
compare quality and prices. Even when buying wholesale there can be
a difference in pricing in the amount or quanitity that is
purchased. There are also many gem shows to attend and familiarize
your self with quality and prices… The dates of these shows are
found in trade magazines and the entry to the shows requires proof
of your business name and business card. Sometimes references are
required.

Diane Sadel
http://www.sweetgemstones.com


#4

Karen and All, I cut all my own cabs and facet. I sell
both wholesale, retail, and any way I can. To be a wholesale buyer
means much more than having a business license, business cards, and
stationary. Being a wholesale buyer means you buy in quantity, you
buy often, and you pay your bills per the agreed upon payment
schedule. If you do not follow these principles you are not a
wholesale buyer and do not expect to get a wholesale price. My
estimate is that one out of every hundred buyers I see is a
"wholesale buyer". Wholesale as a business term in the small
business jewelry world is almost a dead issue. You step up with the
money for a quantity of goods and all sellers will sell to you.
Yes, regardless of your status as a business. That is what I have
determined in over 20 years in the stone business.

Gerry Galarneau
www.galarneausgems.com
LasVegas, G+LW starts Friday 31 May, 2002
See you there


#5

You need to get a resale license. It’s the easiest thing in the
world to do - just fill out a form and they hand you a certificate.
However, that means you have to start paying taxes on your sales -
which you should be doing, anyway.

Log onto your state web site and look for the on resale
tax certificates.

cc


#6

Hi Karen, I am not sure about Philedelphia, but the wholesale jewelry
places in NYC usually ask for a business card and a resale or tax
i.d. #. Once you can provide these they loosen up some, and then
when you spend a decent amount of money they will actually be
friendly.

Jill
http://www.jjewelry.com


#7

Hello Orchidians, Catherine speaks the truth - You need to get a
resale license… However, that means you have to start paying taxes
on your sales - which you should be doing, anyway.

Beyond being the right thing to do, keeping the records lays the
groundwork necessary to apply for a future business loan. I’ve
worked with folks who sell extra garden produce at the farmers’
market. Some resist, resent, and refuse to follow the law in
collecting & paying state and local sales tax. The day comes when
they are doing so well that they wish to expand. A small business
loan is needed to do so. At that point, they either have to confess
to breaking the law - NOT what a bank wants to see - or try to
qualify for a loan without any business history or collateral.
Having proper business and tax records brings credibility to your
effort, and can be very helpful in the future. My US$.02 on that.
Judy in Kansas

Judy M. Willingham, R.S.
Biological and Agricultural Engineering
237 Seaton Hall
Kansas State University
Manhattan KS 66506
(785) 532-2936


#8

Gerry, you’ve succinctly summed up what wholesale means. But terms
of business have changed and the internet has speeded up those
changes. Certain ethical considerations and courtesies that went
along with wholesale sales have largely disappeared. Many are in it
for the short term gain and will sell to anyone who has the purchase
price. Wholesale used to denote a certain relationship between
seller and buyer. I buy wholesale gems from a dealer who also will
sell to my customers. This is what I would consider unethical. But
rather than dwell on what used to be we must deal with the present
reality.


#9

I live in Pasadena on the Left Coast. A friend of mine made stained
glass windows, etc., a lot like jewelry, but a whole lot bigger. Once
the glass was cut, it was yours. His clients where movie stars,
Hollywood wives, recording industry people and beach people. Anyone
can get a resale license out here, and everyone knows a printer. He
had the following rules.