Liquid Death grew from an emerging canned-water startup into a nationally distributed beverage brand, reportedly generating $333 million in revenue by mastering something most CPG brands struggle with: scaling retail distribution without destroying cash flow. The secret wasn't just viral marketing; it was building proof of consumer demand before asking retailers to take risks. For B2B sellers looking to replicate this success, modern net terms management platforms now make it possible to offer competitive payment terms while receiving cash earlier, addressing the working capital challenges that strain many emerging CPG brands.
Net terms represent the payment window a seller extends to buyers. Net 30 means payment due within 30 days, Net 60 within 60 days, and so on. In B2B distribution, these terms are often expected by major retailers who use them to manage their own cash flow.
The mechanics work like this:
For retailers like Walmart, Target, or regional grocery chains, extended payment terms preserve their working capital. This creates a dynamic that emerging brands must navigate carefully when building retail partnerships.
Brands that can offer competitive payment terms may unlock advantages such as:
However, offering these terms without proper financing infrastructure creates cash flow strain. Understanding the cash conversion cycle of how long capital remains tied up between purchasing inventory, delivering to customers, and collecting payment is essential for CPG brands planning sustainable growth.
Trade credit creates risks that accelerate during growth phases. Beyond cash flow strain, brands face:
Traditional approaches to managing these risks, such as requiring personal guarantees, demanding upfront deposits, or limiting order sizes, can impact growth momentum. Brands often find themselves choosing between accepting credit exposure or constraining sales velocity.
Non-recourse net terms financing can alter this dynamic. With platforms that assume default risk on approved, valid, and undisputed invoices that meet contractual requirements, sellers may:
The key distinction: non-recourse protection on covered invoices means if the approved buyer doesn't pay a valid, undisputed invoice, the financing platform may absorb the loss, subject to underwriting criteria, exclusions for fraud, returns, fulfillment failures, merchant breaches, and other contractual terms. This differs from traditional factoring with recourse provisions that maintain seller liability.
Liquid Death's approach centered on building verifiable consumer demand before traditional retail distribution. Their strategy included:
This proof helped reduce perceived risk for retailers. When major chains could see verified demand signals, they approached the brand with greater confidence. The power dynamic shifted, potentially enabling better term negotiations from the start.
Different retail channels carry varying working capital requirements. Businesses planning channel expansion should assess:
Cash Flow-Friendlier Channels:
Working Capital-Intensive Channels:
Businesses should evaluate each channel's payment timing, inventory turn expectations, deduction policies, promotional requirements, and total order volume. Sequencing that builds cash flow momentum before accepting channels requiring significant working capital investment can support more sustainable scaling.
Consider a beverage brand with strong revenue growth but limited cash reserves. Despite healthy gross margins, rapid growth can consume cash faster than operations generate it when the gap between paying suppliers and collecting from customers widens.
The cash conversion cycle formula captures this dynamic:
For many emerging CPG brands, this cycle can extend beyond 90 days, meaning working capital planning must account for the timing gap between cash outflows for inventory and labor versus cash inflows from customer payments.
Modern net terms platforms address this by advancing invoice value earlier while buyers pay on their standard terms:
This structure can help bridge the period between shipment and buyer payment, supporting more consistent cash flow for working capital needs.
Manual accounts receivable processes face scaling challenges. As distribution expands, AR teams must manage:
Each new retail relationship adds administrative work. Brands often discover their AR overhead grows alongside revenue, impacting unit economics.
Modern accounts receivable platforms can reduce scaling friction through automation:
Invoice Generation: Automatic creation synced from ERP and accounting systems, reducing manual entry errors and delays.
Payment Reconciliation: Technology that matches incoming payments to invoices, even when retailers pay in bulk or apply deductions.
Collections Workflows: Scheduled reminders, consistent account follow-up, escalation workflows when needed, pauses when payments or disputes are recorded, and centralized finance visibility.
Real-Time Dashboards: DSO tracking, aging reports, and portfolio health metrics updated continuously.
Resolve Pay can reduce repetitive data entry and centralize invoice, payment, reconciliation, credit, and collections workflows, transforming AR from a resource drain into a more efficient operation.
Traditional B2B credit checks could require weeks: calling trade references, pulling credit reports, analyzing financial statements, and making judgment calls. This timing often couldn't match modern sales cycles.
AI-powered credit engines can evaluate business information more comprehensively:
The result: some decisions may be generated rapidly, while other buyers may require additional verification or documents depending on the buyer, available information, underwriting requirements, and verification needs. Credit lines remain discretionary and not guaranteed, adjusting based on ongoing payment performance when appropriate.
Traditional credit inquiries can impact buyer relationships. Modern platforms may use discreet or quiet business credit assessments using company information, subject to the selected workflow, evaluating creditworthiness with less intrusive approaches.
This can preserve the sales relationship while enabling informed credit decisions.
Brands often assemble payment infrastructure piecemeal: one system for credit checks, another for invoicing, a third for collections, and a fourth for payment processing. This fragmented approach creates:
As distribution scales, these challenges can compound into operational bottlenecks.
Platforms combining credit decisioning, net terms financing, AR automation, and payment processing into unified solutions can help eliminate these friction points:
Integrations with major accounting systems (QuickBooks Online, Xero, Sage Intacct, NetSuite) and ecommerce platforms (Shopify, BigCommerce, Magento 2, WooCommerce) plus flexible APIs help these systems work within existing technology stacks. Businesses should confirm integration scope, data flows, synchronization behavior, and implementation requirements when evaluating platforms.
Aggressive collections can strain customer relationships and brand reputation. Passive collections may leave cash uncollected longer than necessary. Finding the right balance requires sophistication, especially at scale.
Deduction settlements alone can lag 60-120 days behind shipments in some CPG contexts, creating working capital pressure beyond standard payment terms.
Collections automation can help navigate this balance:
These systems aim to collect efficiently while maintaining the customer relationships that drive repeat orders.
For manufacturers, distributors, and wholesalers seeking to offer competitive net terms without the cash flow strain that constrains growth, Resolve Pay provides a purpose-built solution combining multiple capabilities into a single platform.
Non-Recourse Net Terms Financing: Resolve may advance a portion of eligible approved invoices, with amounts and timing dependent on underwriting, invoice verification, and program terms, while assuming default risk on approved, valid, undisputed invoices that meet contractual requirements and exclusions. Sellers receive earlier funding; buyers pay on Net 30/60/90 terms they expect.
AI-Powered Credit Assessment: Proprietary underwriting evaluates buyer information, with some decisions generated rapidly while others may require additional verification. Discreet credit checks can help protect buyer relationships while credit lines adjust based on payment history when appropriate. Credit limits remain discretionary.
Integrated AR Automation: Resolve can reduce repetitive data entry and centralize invoice generation, payment reconciliation, and collections workflows while syncing with QuickBooks Online, Xero, Sage Intacct, and NetSuite.
White-Labeled Payment Portal: Branded buyer dashboards accept ACH, wire, credit card, and check payments while maintaining the seller's brand throughout the buyer journey.
Resolve serves thousands of businesses seeking to scale distribution like Liquid Death without the working capital challenges that constrain many growth stories. For brands ready to offer competitive terms while managing cash flow more effectively, Resolve offers a proven path forward.
Net terms are payment windows extended to buyers Net 30 means payment due within 30 days. They benefit sellers by enabling larger orders, building preferred vendor status, and accelerating market penetration. However, they require financing infrastructure to avoid cash flow strain, as the cash conversion cycle for emerging brands can extend beyond 90 days.
Non-recourse net terms financing transfers credit risk to the financing platform on approved, valid, undisputed invoices meeting program requirements. When a platform assumes default risk on covered invoices, sellers can offer competitive terms with reduced balance sheet exposure. This differs from traditional factoring with recourse provisions where sellers remain liable.
AI credit engines evaluate business information including cash flow indicators, payment history, and behavioral signals to support credit decisions. Some decisions may be generated rapidly, while other buyers may require additional verification depending on available information and underwriting needs. Credit lines remain discretionary and can adjust based on payment performance.
AR automation reduces repetitive manual invoice entry, payment reconciliation, and collections follow-up. Technology can match payments to invoices automatically, manage collections workflows intelligently, and provide real-time DSO and portfolio health visibility. This reduces administrative overhead as distribution scales.
Leading platforms offer integrations with major accounting systems including QuickBooks Online, Xero, Sage Intacct, and NetSuite, plus ecommerce platforms like Shopify, BigCommerce, Magento 2, and WooCommerce. Flexible APIs enable custom integrations. Businesses should confirm integration scope, data flows, synchronization, and implementation requirements when evaluating solutions.
This post is to be used for informational purposes only and does not constitute formal legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Resolve assumes no liability for actions taken in reliance upon the information contained herein.