Approve a new wholesale account in five steps: collect, verify, decide, set terms and record. Make three separate decisions: line-sheet access, the first order and how it is paid, and credit. Most new accounts start on prepay or a deposit. Net terms come after a signed credit application, references and, for newer businesses, a personal guarantee.

This page is for brands opening accounts with US boutiques and stores. For the bigger picture, see how to start selling wholesale.

Key takeaways

• Line-sheet access, first order and credit are three separate decisions.
• Check that the business is real before the first order ships.
• Net terms are credit: use uniform written criteria and give the real reasons if you decline.
• A personal guarantee needs its own, clearly separate signature.

What are the steps to approve a new wholesale account?

Collect, verify, decide, set terms and record. "Decide" is really three decisions:

Keep sales out of the credit decision: reps shouldn't promise terms before approval.

What should I ask on a wholesale account application?

Ask only for what you will use. Retailers expect a real wholesaler to request their tax ID and resale certificate.

Ask everyone: legal name and trade name, entity type and state, EIN, store and billing addresses, phone, website and social handles, brands they carry, expected first-order size, and a resale certificate if you would otherwise charge sales tax.

Ask only retailers who want terms: owners or officers and the authorized signer, a bank reference, two or three trade references, the terms and limit requested, signed acceptance of your terms of sale, consent to check references and credit, and a personal guarantee if you require one.

Use the same legal name on your wholesale order documents.

How do I quickly check that a retailer is real?

Before the first order ships:

1. Entity registry. Confirm the exact legal name and its status in the state business registry. It should match the application.
2. Business email domain. Expect the retailer's own domain. A free-mail address on a large first order deserves a call.
3. Call back. Phone the number on the retailer's own website, not one given in the request.
4. Commercial address. The store address should match the website and map listings.
5. Store reality. Check website and social history, product mix, price points and brands stocked.
6. Channel fit. Look for marketplace selling, heavy discounting or clashes with your existing accounts' territories.

Red flags: a brand-new domain, a freight-forwarder or residential ship-to on a first order, and pressure to ship fast.

Bust-out pattern: a new account pays a few small invoices, then places a large order on terms and vanishes. Re-check the account whenever you raise its limit.

Are net terms credit, and what if I decline?

Yes. Regulation B, which implements the Equal Credit Opportunity Act, covers business credit, including trade credit, so a brand that decides who gets terms is generally a creditor under it.

• Apply written, uniform criteria to every applicant.
• Never ask about race, color, religion, national origin, sex, marital status or age, including of owners and officers.
• A declined credit applicant can generally request the reasons in writing within 60 days. You then owe a written statement.
• Give the actual principal reasons, such as "unable to verify trade references". "Internal policy" is not enough.
• Offering prepay instead of the requested terms generally counts as a decline unless the retailer accepts.

Declining line-sheet access is different: choosing who may buy from you is not a credit decision. Have a lawyer or credit adviser review your application and decline wording.

Can I ask the owner for a personal guarantee?

Generally yes, from owners, partners or officers. Base the requirement on the business, such as how new it is or the limit it requests, never on who owns it. Don't ask only women-owned or minority-owned businesses, or require a spouse to sign because of marriage.

Give the guarantee its own, clearly separate signature. In Extech, the New Jersey Supreme Court held that one signature on a credit application did not bind the owner personally. Rules vary by state, so a separate guaranty form or second signature block is safer.

You can generally pull an owner's personal credit report only when they are personally liable, for example as a guarantor. Put their consent in the guarantee language. This is general information, not legal advice.

When do I ask for the resale certificate?

Ask for it with the application if you would otherwise charge sales tax, and check that its name and state match the business you verified. For validity, state rules and record-keeping, see resale certificates and sales tax for wholesale brands.

How do I set terms for a new account?

Start new accounts on prepay or a deposit with a small first order. Move them to net terms after a signed credit application and on-time payments, with a written limit you can afford to lose. Raise it in steps, re-checking the account each time. For terms ladders, late fees and collections, see wholesale payment terms and net 30.

How should I record the decision?

Keep one record per account with:

• the access, first-order and credit decisions, and who made them
• the payment method and any limit
• the checks you ran
• the signed application, guarantee and certificate
• for a decline, the principal reasons

It lets you apply consistent criteria and answer a written request for reasons.

How do I run this in my wholesale ordering software?

In Brandboom, buyers request access from the embed widget on your website or your showroom entry. Requests land on your Visitors page, where you review the buyer's details and choose which presentation to grant.

On a share link, turn on Require Buyer Qualification so the buyer completes a Buyer Application before viewing, and add an access code and expiry. Use a separate link and access code for each buyer segment.

Brandboom also lets sellers see ratings left on a buyer by other sellers. Check those ratings and read the reviews alongside your own checks before you grant access, approve a first order or offer terms.

Orders from buyers who have not verified their email carry an "Unverified" label in the order email; treat that as a cue to run your checks. You can block a buyer from one showroom or all of them, report them to Brandboom, or report a buyer from an order.

Save approved retailers on the Customers page with customer codes and tags, and put your Terms of Sale and payment options on the order form. New orders arrive as Processing; mark them Complete once you have checked the account.

Frequently asked questions

Do I need a credit check if they prepay?

Usually not. If the retailer pays before you ship, you aren't extending credit, so references and a credit report add little. Still run the quick business check: registry, email domain, a call back on the published number and a commercial ship-to address. A prepaid order can still be fraud, for example when it ships to a freight-forwarder address.

Can I ask for a personal guarantee?

Generally yes, from owners, partners or officers when the business is new or small, or the limit is large. Apply the same rule to every applicant, and never require a spouse to sign because of marriage. Give the guarantee its own separate signature, with consent to a personal credit report. Rules vary by state, so have a lawyer review the wording.

What is a trade reference?

A trade reference is another supplier that already sells to the retailer on terms. Ask for two or three, with contact names. When you call, ask how long they have sold to the retailer, the typical credit limit, whether invoices are paid on time and whether there have been disputes. A brand-new business may have none, which usually means starting on prepay.

What if I decline an application?

Be clear about what you are declining. Refusing to show your line sheet is a sales choice. Refusing net terms is a credit decision under Regulation B. Tell the retailer your decision. If they ask in writing within 60 days, give them the actual principal reasons in writing. You can still offer prepay. Keep the reasons in your account record.