Wholesale and Tax Exempt

I was talking with a quilter yesterday who suggested I write about wholesale resources for professional machine quilters. I agreed it was a great idea for a post – and here it is.

About Wholesalers – Most, if not all, wholesalers require some proof that you are in a business and that you will be purchasing the bulk of the items for use in your business.  (Yes, you can get a few things “just for you” but you will need to talk to your tax person about how to track these items and how to document them on – and for – your taxes.) Each wholesaler will have their own requirements on what you will need to prove you are a business.  You need to follow the rules that are set up at each individual wholesalers.

Most wholesalers have minimum purchase requirements – again, you must follow their rules to purchase at their business.

When buying wholesale you need to purchase larger quantities of items. You will have to purchase a bolt (usually 15 yards) of fabric, not just one or two yards. You may have to purchase a box of thread (several spools/cones) instead of a single spool/cone. Items such as Fray Check and Sewer’s Aide, etc., come in boxes of 3 or 6 or more. You need to purchase the whole box, etc., etc. When it comes to batting, you have to buy a roll, sometimes 40 yards, or more!

When you purchase wholesale, the cost is significantly reduced from retail and most, if not all, wholesale purchases are exempt from state sales taxes.

The theory behind this is – when you sell the completed project, the state will collect MORE in sales tax than when you purchased the items from the wholesaler. (Note – I am not a CPA or tax person. This is my understanding and interpretation. Please correct me if I’m wrong.)

I am not getting into any discussion about what items need to have sales taxes charged, or if labor is taxable. These are questions you need to discuss with your CPA / tax person and you need to do what is right for your state, province, etc.

You will also be responsible for shipping charges to get your purchases delivered to you. Talk to the wholesaler when you place your order and they should be able to give you an approximate cost for the shipping. Note: Talk with the person who is taking your order – depending on the wholesaler, some items may not have any shipping charges if you order a minimum $ amount.

Tax Exempt – Let’s assume that you do purchase wholesale but you need only a single yard of fabric to put a binding on a customer’s quilt. You don’t want to get a whole bolt of fabric and you don’t want to wait for it to be delivered in a few days. You decide that you are going to purchase the fabric at the local quilt shop or big box fabric store (that starts with a “J”.)  Talk to the shop owner / manager and see if you can purchase the fabric/item tax exempt. You will have to pay the marked retail price, but you will not be charged sales tax for this purchase. The (increased) sales taxes will be collected when the project is completed.  Again, you will have to show proof that you are a business – the business documentation will be determined by the shop owner.

If the store you are shopping at has coupons, you can (usually) use the coupons with your tax exempt status. If you have any doubts, check with the store personnel before you checkout.

Purchasing fabrics / items wholesale or tax exempt is one of the good things about being a “legitimate” business.

Business Tip – I like to stock wide backing fabrics in my studio. These fabrics are purchased wholesale and sold to my customers at regular retail prices. I like to have a bolt of light, medium and dark fabric, sometimes a print but mostly marbled or texture fabrics, for this. It is amazing how much extra $$ you can earn by selling wide backing fabrics!

If you have a product or item that you really like to use, contact them directly to see if you can purchase wholesale directly from them. I am always amazed at the number of businesses who will do this. If they don’t, ask for the name of the wholesaler who does carry their products. You may learn of a new supplier.

I know of only a few wholesalers (the ones that I use the most), which I will list below. I know there are a LOT more, so please leave a comment with the name and contact information of any other wholesaler or your favorite  supplier. After a bit I’ll compile all the information and post it as a separate page.

E E Schenck
www.eeschenck.com
6000 N Cutter Circle
Portland, OR 97217
(800) 433-0722

 The Warm Company
www.warmcompany.com
Warm & Natural Batting
5529 186th Place SW
Lynnwood, Washington 98037
(425) 248-2424 or
Toll Free (800) 234-9276

I KNOW there are a lot more wholesalers and suppliers out there – let’s get them listed here for everyone to see.