Everything You Need to Know About Setting Up Your Trade Discounts

Landing a design project is thrilling. And then things get real. Even if you’re a new business owner, clients expect you to be an expert at everything, especially sourcing for their budget. While you can always shop at retailers, establishing to-the-trade relationships offers more than access and assortment—it immerses you in the design industry in ways that Instagram scrolling never will. Setting up a trade account requires filling out a few forms, getting your business documents in order, and having a new appreciation for sales tax. To make this less panic-inducing, we’re breaking down the basics.

Most designers purchase products via two ways: retail—think branded stores and online sellers—or trade channels like multiline showrooms, furniture wholesalers, and vendors. (A number of well-known retail brands also have their own dedicated trade programs for design professionals.) So what’s the difference? Retail is available to everyone, including your client—which can invite its own drama. Buying with a trade account allows you to purchase pieces at a discount, or a percentage off the suggested retail price. Discounts vary by vendor but may entail savings of anywhere from 20% to 50%. And the benefits of a trade account extend far beyond pricing—you’ll find the service and connection to your design community are worth any temporary paperwork anxiety.

What You Need to Provide

Thankfully most vendors, including retailers, have trade account applications online, although some brands ask that you call and initiate contact with a sales representative. Don’t shy away from this step—having a contact on the inside is never a bad thing, and cultivating relationships makes design happen. To register with a company, you will be asked for one or several of the following:

1. Proof of business: This includes your firm’s name, address, your title, and contact information, as well as your website and social media channels.
2. Current business or state professional license: This is needed for a residential or commercial design-based business, or in the hospitality design industry.
3. Tax ID or EIN (Employer Identification Number): This refers to a nine-digit government-issued number that you receive from Internal Revenue Service. A tax ID is essential for any business entity, and it’s required for opening a business bank account. In short, getting one was likely the first formal step you took when establishing your design studio.
4. Resale certificate: This is sometimes referred to as a seller’s permit or resale number, and any designer intending to sell tangible goods needs a resale license. You apply for one directly with the state where your business operates. In taking this step, you are responsible for collecting and reporting sales tax. Each state has unique rules and regulations regarding taxes, so it’s wise to get accounting guidance early to avoid any missteps.
5. Business bank account: While this isn’t always required, make sure you have a separate business bank account set up prior to making any purchases for a project. Doing so is the best way to build business credit, which can help you secure better rates on loans and credit accounts in the future, and having a clear record of business transactions comes in handy when it comes to things like filing taxes.
6. Accreditation certification: This could be NCIDQ or CCIDC, or proof of membership in a professional organization like ASID, AIA, or IIDA.

Making Sense of the Application

For designers who are just starting out, it’s easy to get tripped up by the language presented on these forms. Company type refers to how your business is structured—it could be an LLC, a proprietorship, a partnership, or a corporation (learn more about the breakdowns here).

Another daunting phrase is terms of sale. You’re likely presented with three options: proforma, net 30, or COD. Proforma is your best friend in this early phase; it means you agree to pay for all goods before the vendor ships them out. Net 30 is mostly reserved for well-established design firms who have a good credit history with a vendor. Under those conditions, a designer has 30 days to pay their invoice. Often, designers going this route will be asked to provide references. If you’re just starting out, you can skip this section, or explain that you’re a new business looking to establish an account. COD, or cash on delivery, is not typical for new trade accounts either.

Similarly, it’s smart to ask a trade partner how they accept payment. Credit cards might be standard for e-commerce, but don’t be surprised if a showroom requests a check or a bank wire to complete a transaction.

A Note About Minimum Orders

JOIN NOW

Spring Sale: Become an AD PRO member today and save $100 on an annual membership.

It’s not uncommon for a trade company to have an opening minimum order. This refers to the amount of money you need to spend with a vendor to establish an account. Every brand is different, but minimums can range from $500 to $2,000. This should be stated up front, but it’s good practice to ask about minimums, because you might find a piece that fits within your project budget but falls below the minimum. That will be hard to explain if your client already has their heart set on it. It’s also worth asking if there’s a minimum to reorder with that same vendor.

Final Steps

After your application has been reviewed—expect a wait of 48 hours to five business days—you’ll be notified by a sales rep and issued a vendor ID number to use when purchasing. You may also receive designer login access to begin sourcing immediately, which is the best way to celebrate your new trade account status.