Discounts on parts?

[Gibsonman63]

Thanks to a little help from the gentlemen of the forum, a ton of reading and spending some time with my soldering iron in my hand, all of my amps are now working pretty good. I have been bringing them to my Thursday ice-house sessions for field testing and to show off my work.

Now people are starting to bring me amplifiers to troubleshoot. Definitely not a full time endevour, but it is starting to be an amp or two a month.

It would be nice to be able to get my parts at wholesale (dealer or whatever they call it) prices. How do you go about doing this and would it be worth the hassle for the small amount of work I am doing?

[in a vacuum]

You are essentially setting up a business. You will be a sole proprietor or a limited liability corporation. You will obtain a resale license from your state (in SC it is $50). You have to keep careful records of sales and expenses. Each month you will pay sales tax on the parts you install into the amps you service. You charge the customer sales tax on those parts. Some states require you to charge tax on labor. You will also pay sales tax (use tax) on any items you buy wholesale (from any state) that you use in your business or personal life that you are not going to resale. You will file a quarterly income report to the feds and pay estimated tax and social security four times a year.
Once you have a resale license, many but not all suppliers will sell you parts wholesale. Others on this forum can point you to who does and does not. Sometimes the first order has a minimum of several thousand dollars.

Others can join in with other details

[g1]

Or you will work for cash as you probably are.
Check out CE distribution. I get the impression they are not too picky about how little a repair shop you are as far as getting set up to get parts from them.
Otherwise, I think it would be too much of a hassle until you are doing a lot more volume.

[Enzo]

Actually CEDist will require at least a sales tax license.

In Michigan, a sales tax license is just one dollar. I don't care if you make it all official and charge sales tax on the parts and declare your income etc, but having a sales tax license is often what makes you a commercial customer or not in the eyes of vendors.

But let's look at what the vendors are too. Taking you at face value: you are not asking about how to set up a business, you just want to know how to get charged less for parts. SO there are various kinds of vendors. There are parts houses like Mouser, Allied, Digikey, Newark, Jameco, MCM, and so on. These are places that sell transistors and resistors and capacitors and whatever. Call them up and place an order. Ther is no retail/wholesale thing there. You want a price break? Buy larger amounts. One 1/2w resistor might be 15 cents. But 100 of them and the price is more like 2 cents. One transistor might cost 15 cents, but in lots of 100 they cost 4 cents. (Imagine how cheap they get when you order 100,000 of them) SO nothing is needed to get these prices. Just order.

You are in Texas and so is Mouser, so if you order from them, they should charge sales tax. BUT if you have that sales tax license, sometimes called a resale license, then you can declare the parts purchased are for resale and they will not charge you tax. You then are supposed to keep track of parts sales and charge tax on them. But for your basement operation, no likely anyone will compare the $49 of parts you bought with your sales. Vendors in other states won;t charge tax anyway. ANy7 vendor that needs to be set up for resale pricing will want a copy of your tax license or at least your tax ID number.

SOme places ask for a federal tax ID. You only need a federal employer ID number if you have employees. I am a sole proprietor and have no employees, so I don;t have a federal tax number. WOn;t hurt to have one, you can sign up for it simple enough and have one assigned. It is another cheap/free way to make yourself look more like a business.

Those are general parts houses. But there are specific parts houses for our industry. AES aka tubesandmore.com is a retail supplier of parts we use a lot but other industries don;t. 500v axial lead caps, 6L6 tubes, guitar volume pots, output transformers, tolex. They have a wholesale wing called CEDist. Same company. The prices at CE are lower. But you have to register with them for access. They will want your tax ID number. Magic Parts is wholesale only, same deal. New Sensor sells both at retail and wholesale, you'll need to register for the wholesale access. The prices will be lower, but if you are expecting $20 tubes to sell for $3, think again. More like your $25 reverb pan is $20.

Wholesale means large quantites and bulk purchases to some, but in the electronics parts biz it mainly just means purchases intended for resale. I buy "bulk" but I am talking 100 diodes intead of four. You mention dealer pricing. "Dealer" implies a dealer relationship. That means you have a specific relationship to the company. You are a Fender dealer or you are not, you are a Peavey dealer or you are not. You have an account with the particular company. You may or may not have credit with them. Often account status means credit status, but not necessarily. I have accounts at places without having credit. For example, my account at CEDist is paid via credit card. On the other hand my accounts with Mouser and Allied are Net 30. You are not obligated to apply for credit most places. I have credit with MCM, but not at Digikey. I could get credit anywhere, or I could eliminate it entirely if I felt like it. My accounts with the factorues all involve credit.

You can't just call up Fender or Peavey and be a dealer. And to get dealer status, and a service shop is considered a dealer, you need to apply and be accepted. But to be a Fender or Peavey service center means you are at some level representing those companies. They will ask for photos of your shop exterior, the shop and bench, the customer area - what a customer would see when he enters, and like that. usually they ask if you are operating from a storefront or not. What they don;t want is some kid in his basement fiddling around in his spare time, or some 13 year old pretending to be a repair business. Often they ask how long you have been in business. They don't want to list a company and refer customers to a place that has been in existence 2 weeks and may be gone next week. They usually want a track record of at least a year in business. And they may already have dealers and service centers in the area and are not interested in competing with themselves. Fender for one has a technical exam potential techs much take.

SO if you establish that dealer relation with an OEM, then you can order parts from them at dealer pricing, which is typically about half retail. As a basement weekend warrior you are not likely to qualify for that standing. SOme places like Peavey will sell parts at retail to private citizens. Places like Fender will refer you to a dealer. There are places like Parts Is Parts, that sell OEM parts for less than retail to non-dealers. And places like AES/CEDist sell a certain munber of OEM parts.