One of the most intimidating things to do for a new interior design business can be setting up trade accounts. Unfortunately, despite being in sales, the trade reps aren't always helpful. And the applications have spaces that a new business likely can't fill out.
To apply for a trade account you just need to contact the vendor or sales rep and let them know you need to set up a new account. Look online for your local rep or call corporate or just pick up an application at the showroom. They can send the application straight to your email. Then you fill it out and return it. You'll get an email or letter back letting you know that your application has been approved and your new account number.
When you set up trade accounts, you are taking on the responsibility of collecting and reporting sales tax. Filling out dozens of applications is a pain, so I recommend just completing the applications as you need to place orders.
What you'll (probably) need:
- Proof of business - a business card, a website, a business social media presence
- A resale license - this you get from your state government
- A tax ID (EIN) - free from the federal government
- A business bank account
Sample of Trade Account Application
Parts of a Trade Application
Type of Account: This is where you'll want to choose "Proforma", this just means that you'll pay for your order and then the vendor will ship it out. Once established you can create Net 30 terms, which is a credit account with that vendor. The vendor will ship out the product and you'll have 30 days to pay your invoice. I like to keep my books super clean, so I've never used this method.
Resale: You may have to provide a copy of your resale license (like this application is requesting) or the company may provide you with a special form to fill out. Either way, you just need to include your resale number and state of issue. These forms sometimes ask 1. the type of business you're engaged in - Interior Design services and 2. description of property being purchased - this is where you can write what you're going to be buying from the vendor - interior design goods, architectural salvage, wallpaper, fabrics, furnishings - you can be pretty general.
Business Structure: On these applications, it usually asks what type of business you have. Fill it out appropriately.
Trade References: This is the part that usually trips up new business owners. And you can leave it blank. This is mainly used if you want to create a credit account (net30), but if you're paying for the goods before shipment then this portion is not necessary.
Want to help out your fellow designers? Share this article. #collaborationovercompetition