Opening accounts at your local stores?

[chicks82]

So I have been doing this for a while and I have never opened accounts at stores before. Some of the not opening accounts has to do with poor credit history from when I was in school haha, and the other is just being scared of having that kind of accessibility to the Toy Store.

So the question is what do you guys do that are pros? do you have accounts? are any of you in the same boat as me? This is kind of the next step for my business (i think.)

[TimV]

I actually have "accounts" at sherwin williams and a wood supplier here in town even though I'm not a business. I pay for everything I purchase at the time of purchase rather than charging it per se. There are a couple advantages of setting up an account. One is that they record all the purchase history; so for repeat items (like lacquer at sherwin williams), I always get the same price. And the second advantage is that they provide a contractor level pricing which is a discount off the marked prices. Setting up an account for cash only purchases only takes telling the person at the desk and they enter you into the system right there.

[areynoldsre]

The standard disclaimer: I am not an accountant or lawyer so talk to a real one. If you're at the place where you're thinking about this kind of stuff a conversation with a good CPA or business lawyer can save a ton of grief later on.

I see that you're from CA like me. One California consideration for opening a business account is sales tax. If CA is requiring your business to collect sales tax you can open a "wholesaler" account with many suppliers (even if it is only a cash only account). With a wholesaler account your supplier won't charge sales tax on your purchases but you'll have to do the accounting work and payments to the sales tax folks on your sales. Also I know of a few suppliers (a couple of good ones I should add) in my area that will only sell to businesses with a sales tax permit.

The down side of credit is that you now have debt to manage (whether it's with a local supplier or your credit card) and it is easy for that to get out of hand.

The upside is developing a good business relationship with the suppliers - as TimV noted - I know a number of the suppliers in my area offer deals and services to their regular 'professional' customers that the general public don't get - like discounts, special hours, free delivery, stuff like that.

[dwacker]

Around here there is no one that would open a wholesale pricing account without having a resale permit. You have to be very careful on deciding what you pay tax on and what you dont. If its not on the bill of materials you have to either pay it as a use tax or at the counter. So sand paper, glue, pencils that sort of stuff can get you in big trouble tax wise with the state. As far as credit go's Id say stay far away. People tend to ride on credit and never catch back up. Cash in hand is the way to stay out of trouble. If you do decide to get credit, incorporate first and dont sign for personal liability. If they want personal liability the walk away.

Don

[Darnell Hagen]

I have several wholesale accounts but I don't use credit, my clients money down covers their materials. I pay cash at the time of sale because I believe that's the way to run a business. They appreciate that they won't have to spend time and effort collecting their payment. The payoff is I'm treated as family, I'm allowed to pick through lifts, my orders for glass are put to the top of the pile, and when figured or paticularly wide lumber is found it's pulled and saved for my consideration. I am a very small fish in this pond, I don't throw a lot of money around, but I've cultivated strong relationships with my suppliers over several years and I'm treated like I run the largest shop.

Without my accounts I'd have to shop retail. I feel for you hobbiests. Retail prices are like a punch to the gut.

[Timberwerks]

I only do cash & carry. I had accounts in the past but it was just one more thing to take care of each month. I can see a larger shop having accounts but for an individual maker building one off pieces it's not needed, for me anyway.

[Mark Reuten]

I always request a cash account. I don't like invoices showing up at the doorstep and I don't want to leave my suppliers in the lurch if my jobs are not yet paid up. The cash accounts get me the same discounts as credit accounts and my credit card takes care of the credit. I can always draw upon a line of credit at the bank if for whatever reason I cannot pay off the credit card in time but I've never had to do this.

[ChetlovesMer]

Around here there is no one that would open a wholesale pricing account without having a resale permit. You have to be very careful on deciding what you pay tax on and what you dont. If its not on the bill of materials you have to either pay it as a use tax or at the counter. So sand paper, glue, pencils that sort of stuff can get you in big trouble tax wise with the state. As far as credit go's Id say stay far away. People tend to ride on credit and never catch back up. Cash in hand is the way to stay out of trouble. If you do decide to get credit, incorporate first and dont sign for personal liability. If they want personal liability the walk away.

Don

Don, I think you pretty much summed up what I'd say as well.