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Wholse Sale

Old 08-22-07, 08:20 PM
  #1  
SmoothRide
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Whole Sale

Oops. Messed up the title and now it won't change. Ah well.

Recently I realized that with all the new high end apartments being built in my area, we'd have a lot of wealthy, young professionals. IE, the kind that would possibly be into biking.

Now, I'm not the kind of guy to miss out on a chance to make a bit of dough. However, getting everything set up could be hassling, so I'd like to know what I'm getting into.

I know I need a tax ID (I think thats what you call it) to receive wholesale items. Where can I get said number?

I also realize I need to own a business. What would be considered one? Can it be home-operated, or do I need a store? do I have to make a certain revenue per quarter/year/whatever?

I'm a minor (!). Does this eliminate the possibility of me getting an ID number? If not, i need a guardian co-sign correct?

What's the policy on buying items for personal/employee use?

At what points do I pay tax? After buying wholesale? After selling wholesale?


If you're still uncertain on what I'm doing, I'd be custom building bikes for people.
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Old 08-22-07, 08:34 PM
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So the question is why would they buy a bike from you, rather then from LBS? I don't think price wise you will be competitive, because most LBS will be able to get bikes for cheaper.
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Old 08-22-07, 08:37 PM
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Marking up prices 10 or 20% versus 50% like my LBS.

Also, my LBS doesn't do high-end. Or custom build.
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Old 08-22-07, 08:56 PM
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Originally Posted by SmoothRide View Post
Marking up prices 10 or 20% versus 50% like my LBS.

Also, my LBS doesn't do high-end. Or custom build.
How much up front cash do you have available to you to start the business? Will your parents loan you some cash?
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Old 08-22-07, 09:14 PM
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Rather than wait for your answer, let me just tell you why your idea won't work:

1. High end manufacturer's won't sell their materials to people operating out of their homes. You need a storefront and a whole lot of cash and make commitments to buy a certain minimum amount from them.

2. Once you start talking about opening a store, you start talking employees, huge overhead (rent, insurance, utilities, etc.) and inventory carrying costs. You probably need a couple hundred thousand dollars just to get you started and have enough working capital to keep you going for the first year (which is usually the toughest).

3. Once you factor in all of these costs, you won't be able to stay in business unless you have large markups for your product, just like your LBS does now.

I hope I'm not stepping on your dreams or underestimating the financial resources you have at your disposal. I'm making some assumptions because you're a minor which probably means you have a limited amount of business experience. I may be wrong.

However, if I'm right, how about a business that services high end bikes? You don't need to carry inventory. You don't need to have a storefront. You don't need any kind of relationship with suppliers. All you'll need is some tools, a space to work and some marketing know-how. A heck of a lot easier than having to carry inventory (which sucks) and hire employees (which sucks even more).
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Old 08-23-07, 08:40 AM
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Originally Posted by Sprocket Man View Post
1. High end manufacturer's won't sell their materials to people operating out of their homes.
Actually, I know a guy who does just that. He's a certified dealer for Titus and Moots, among others.

This is not to say this line of work is easy or very profitable.
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Old 08-23-07, 12:02 PM
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Every state has different laws about the TAX ID requirements so its hard to answer your questions without knowledge of your state requirements. Also, for the most part a federal tax id is not needed unless you have employees.


In Texas if you buy items for personal or employee use wholesale, you must pay taxes on those items on your next tax due date. Any other items you bought wholesale for resale only have taxes due to the state after you sell them on the next tax due date.

I don't believe there is a minimum revenue requirements for a state Tax ID. At least not in Texas. Though, even if you earned no revenue or sold any taxable items, you are still required to file the tax forms.

You can get a Tax ID for businesses run from your home as easily as a brick and morter. In Texas if a Tax ID is issued for a business at a specific location and you move or the business changes substantially from the original description given to the tax authority you may be required to obtain a new Tax ID. Of course this may be different in your state.

I doubt you can get a Tax ID as a minor. Most likely you will need one of your parent to request the ID.

Last edited by Kabloink; 08-23-07 at 04:35 PM.
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Old 08-23-07, 07:00 PM
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Originally Posted by Sprocket Man View Post
Rather than wait for your answer, let me just tell you why your idea won't work:

(Removed for the sake of space)
Yeah, I guess so. It was just me throwin' ideas around. I did find a kick ass deal on a Madone 6.5 though. Brand new, 3 grand. Thank god I have the money right now.
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Old 08-23-07, 07:59 PM
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Originally Posted by SmoothRide View Post
Yeah, I guess so. It was just me throwin' ideas around. I did find a kick ass deal on a Madone 6.5 though. Brand new, 3 grand. Thank god I have the money right now.
No harm in asking. Nice to see young people take an interest in creating a business.

Enjoy your Madone.
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Old 08-23-07, 08:06 PM
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Yeah, I almost feel as if I don't deserve such a nice bike.

I have my own little business where I take peoples stuff, sell it for them and take 30%. it's amazing that people actually don't have time to do that.
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