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Business entity Question - Retail or Wholesale

Postby Hahndds » Tue Mar 11, 2008 6:12 pm

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Alright, as some of you know I invented this dental instrument and am close to being able to sell it. Here is my new problem...

I am having the product made in Pakistan, where most steel instruments come from, and will have a whole bunch of them in about 2 months. Now I have several ways of selling the product. First, I will have a website where I will sell them retail to dentists. Second, I will sell them wholesale to distributors. Thirdly, I may private label them to other companies.

So, what the heck am I? A manufacturer, retailer or wholeseller???? How do I start a business that does them all? I want to be a LLC and am stuck with what to claim.

Thanks for any help...

-Christian
<p><strong><a href="http://www.inventaholics.com/">www.Inventaholics.com</a></strong> - be part of the journey</p><p>"Those who say it cannot be done should not interrupt those doing it"</p>

Postby Michelle » Tue Mar 11, 2008 9:45 pm

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Can the answer be it depends?

Have you talked to an accountant? Are the tax applications for the various statuses different. I know that for a manufacturer, there are different tax implications than for a retailer?

I think in the conceptual sense you are a vendor, doing both retail and wholesale sales.

JMHO...as I know nothing.

Michelle

Postby Hahndds » Wed Mar 12, 2008 3:55 am

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I don't know either....I may have to talk to my accountant. I also have an e-mail out to a SCORE person who may help me there. I did not consider the "vendor" identity yet...thanks.

Am I a manufacturer even if I have it made in Pakistan? IE, I don't physically make it but I designed.

If I am a manufacturer then I guess I could be both a retailer and a wholeseller!

So, the question evolves: Am I a manufacturer or a vendor?

Thanks for the response Michelle.
<p><strong><a href="http://www.inventaholics.com/">www.Inventaholics.com</a></strong> - be part of the journey</p><p>"Those who say it cannot be done should not interrupt those doing it"</p>

Postby makeworldbetter » Wed Mar 12, 2008 9:46 am

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all of above

We ought to try all possible ways. separate market by giving them different price or discount. A distributor may ask you for over 50% discount over your web retail price. If another company is willing to buy your product and relabel, why not. All depend on deals.

Postby Average Inventor » Wed Mar 12, 2008 9:52 am

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Hahndds,

You can just create a company name xyz LLC and then market your product or products any way you want. There is no advantage of classifying yourself into a wholesaler, retailer, or manufacturer. Sony for example makes several products, they wholesale, retail, and they have their products manufactured overseas just like you.

If you feel you business will specialize in Dental products then you could make it into t dental supply company. FYI it won't be easy to sell to distributors (no matter how good it is) because they are looking to deal with companies with a large number of products or SKUs. Also you will find that just creating a website and finding an ecommerce platform to sell and take payment is only part of the equation. You will need to spend a ton of time getting your site seen and marketed to get any meaningful sales. Also you should brand your new product so that when people look for it they know it by name.

Hope that helps!

Postby Hahndds » Wed Mar 12, 2008 10:40 am

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Thanks for the info guys. I am getting endorsements from my dental school (USC), international dental speakers and clinicians, who will put the product into their lectures. Then I hope to private label the product. I want to sell it online to start, then add other products in the same field to create multiple buys as well as a brand...Yes, it is tough but I think I have the connections to get this product noticed! Oh yeah, I will also write an article for a prominent cosmetic dental journal on how to use the product...

I was confused about having to specify what exactly I will be...from what I can tell I can just create Hahn Unlimited, LLC and sell it anyway I want! That would be ideal!

Thanks,

Christian
<p><strong><a href="http://www.inventaholics.com/">www.Inventaholics.com</a></strong> - be part of the journey</p><p>"Those who say it cannot be done should not interrupt those doing it"</p>

Postby Michelle » Wed Mar 12, 2008 5:45 pm

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For LLC documents, you can authorize it to do any legal business. :)

Postby Work2XL » Wed Mar 12, 2008 9:30 pm

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Michelle is correct. Why limit yourself? LLC requires Articles of Organization. Your best interest is be a broad as you can so as not to limit yourself in the future. What if 15 years from now, you want to also buy some other company and obsorb thier product line or service. I filed as "for doing legal business".

Randy

Postby Hahndds » Thu Mar 13, 2008 3:41 am

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"as for doing legal business" - good, I will see if that is an option. This discussion has already been very helpful. I will file an LLC as above, but I still need a reseller license. Do I need a wholesale license as well?
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Re: Business entity Question - Retail or Wholesale

Postby CriterionD » Thu Mar 13, 2008 3:20 pm

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Hahndds wrote:How do I start a business that does them all?


Easy, you start a business and then you do them all.

If you claim you are not doing them all - that is false advertisement, or something to that extent. I'm not sure of the exact laws, but I'm pretty sure the Articles of Orghanization are meant to provide a general statement of the company's purpose and do not really limit its operations at all.
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