Once you have earned a skill of making floral arrangements which can satisfy various kinds of demands from regular orders (which are often delivered through FTD services) to special events such as wedding or funeral flower decorating services, you will be starting your own floral business. No matter what kind of floral business it is, just a regular floral shop, independent floral designer, service provider offering wedding or funeral floral decorations or teaching floral arrangements, you are required to procure flower materials to run your business.
In this case, buying flowers from an ordinary floral shop does not provide any room for you to mark up the cost when selling to your own customers (consumers) because a floral shop (from whom you intend to buy flowers) is situated in the same level of sale channel as you. In order to allow a room for marking up your price, you must procure flowers from a wholesaler who usually buys flowers from growers or nurseries and sell to flower retailers.
Wholesalers of flowers usually have their own flower market where they sell flowers (mainly cut flowers) at wholesale prices which are much lower than retail prices at which your floral shop sells cut flowers to your own clients (consumers). In order to open your floral shop, this seller’s permit (also known as resale license) and a business license are required by law. Both of them can be obtained quite easily. Seller’s permit can be obtained from the authority of the state (in case of California it is State Board of Equalization) and business license can be obtained from the city where your business is located.
By showing this seller’s permit, you can buy cut flowers at much cheaper price than retail price (usually at least 50% off: It depends on at how much you resell at your own floral shop). If you buy flowers at a wholesaler not for the purpose of reselling but for using/consuming yourself, you are required to pay sales tax to wholesaler whereby you can still buy flowers at a wholesale price. This makes it easy for you to procure flower materials which will be used for making sample floral decorations displayed at your shop or for consuming them at flower arranging classes if you offer such services at your shop.
Not only flower materials but also other items such as vases, floral foams, ribbons and gifts etc. can be bought at a wholesale price by showing a seller’s permit. Some people use this seller’s permit for buying various items which have nothing to do with their floral shop. Namely they go to other type of wholesaler (not flower market) and buy gift items, handbags and furniture etc. (for example) for their private use, in which case as well, it is required for them to show seller’s permit and in this kind of situation they pay sales tax when settling payment because they buy those items not as a reseller (retailer) but as an end user (consumer) who must pay sales tax. Quite frankly I do not know if it is right to use a seller’s permit for this kind of transaction. But I hear many people do so. And actually most wholesalers do not mind doing this kind of transaction as far as buyers pay sales tax as an end user when settling the payment.
Remarks: In order to keep a seller’s permit (resale license), you must file a sales tax return every year with the authority located in your state (such as state board of equalization in California).
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