One of the most common questions I get asked is: do you need an ABN (Australian Business Number) to buy from Australian wholesalers?
The answer is yes, you need an ABN to buy from most genuine Australian wholesalers. Some may also require you to have a registered business or business name. Some genuine wholesalers will sell to people who do not have an ABN, but are few and far between and generally do not have particularly popular products. Don’t worry though, read on and find out how anyone can easily meet these requirements for little to no cost.
Why are they not sold to people without ABN?
A wholesaler uses the ABN of a potential customer to confirm their business identity, to help verify that they really are a business customer and not just an end consumer (general public) trying to obtain discounted products. This is also the reason why some Australian wholesalers prefer to deal only with people who have a registered trade name (although many do not require it).
The job of Australian wholesalers is to sell to Australian retailers … and NOT to the end customer or the general public. If a wholesaler were to start selling products to end customers, without bypassing retailers, not only would it make the retailers very angry, but they would likely lose a lot of valuable retail customers / stores as well. Effectively, they would be slashing / stealing market share from retailers, which is not a good business move.
Some wholesalers / distributors, especially those of popular brand products, also like to ensure that their products are stocked only by reputable wholesalers that they consider to be “of a sufficiently high standard.” By making sure that they only sell to people who meet certain minimum requirements, i.e. an ABN and probably a trade name, they are helping to ensure that their product is only available at what they consider quality outlets.
If someone tries to tell you that you don’t need an ABN to buy from the Australian wholesalers listed on your wholesale list, the alarm bells should start ringing. Either they are not telling the truth, or most of their so-called wholesalers are nothing more than discount retailers.
Isn’t it expensive and difficult to get an ABN?
No, anyone who is a resident of Australia for tax purposes can apply for an ABN at no cost; You do not need any records other than your Tax File Number to be eligible for an ABN. You can apply for one online at the ATO (Australian Tax Office) website, www.ato.gov.au, or by calling them on the phone.
A business name costs a little more, but can be registered for no more than $ 100 to $ 200 in most states. For most retail activities in Australia, you will find that you do not need any specific license to operate, however you should check the licensing regulations in your state before registering your business name. More information on ABNs, trade names and licensing requirements can be found on the Australian Government’s business website, www.business.gov.au.