Net 30/60/90 Terms – Guide for Tire & Wheel Distributors

Updated on October 21, 2025

Tire and wheel distributors operate in a capital-intensive industry where many distributors target 6–8 inventory turns annually, yet businesses typically wait 41 days on average to receive payments in B2B transactions—even when Net 30 terms are specified. 

This cash flow mismatch creates a fundamental challenge: how to offer competitive payment terms that win business while maintaining the liquidity needed to purchase inventory and meet operational obligations. With the tire market experiencing high and increasing competitive intensity, distributors who master net terms management gain a significant advantage. 

Resolve's  B2B net terms solutions help distributors offer flexible payment options while receiving up to 90% of invoice value within 24 hours, transforming net terms from a cash flow burden into a growth engine.

Key Takeaways

• The tire industry follows a "2/10 30 60 90" standard where customers get a 2% discount for 10-day payment, otherwise having 30-90 days based on credit rating and purchase volume
• Net terms are essential competitive tools—a significant share of B2B sales are transacted on trade credit terms, and high-volume tire buyers receive much more lenient terms than smaller operations
• Cash flow timing is critical—with inventory typically turning every 45–60 days (based on 6–8 annual turns) but payment terms extending to 60-90 days, distributors face a fundamental mismatch between cash outflows and inflows
• Credit evaluation is non-negotiable—many distributors enforce strict credit policies, and returns often incur restocking fees (commonly 10–20%), making bad debt especially costly
• Digital transformation is accelerating—roughly 15% of B2B buyers are willing to place orders over $1 million via self-serve channels, though willingness to spend large amounts online has risen significantly since 2020, requiring distributors to modernize payment infrastructure
• Alternative financing solutions like non-recourse invoice advancement allow distributors to offer competitive terms while protecting cash flow and reducing risk

What Are Net 30 Terms and How Do They Work in Tire Distribution?

Net 30 payment terms represent the foundational credit arrangement in tire and wheel distribution, indicating that full payment is due within 30 days from a specified starting point—typically the invoice date. 

This system essentially provides an interest-free loan that allows tire retailers to receive inventory, sell products to generate revenue, and then remit payment to their distributor. Unlike cash on delivery (COD) or due upon receipt arrangements, net terms acknowledge the reality that most B2B businesses need time to convert inventory back to cash.

In tire distribution specifically, net 30 serves as the baseline term structure, but it's rarely offered in isolation. The industry standard combines net terms with early payment incentives through the "2/10 30 60 90" convention, where buyers receive a 2% discount if they pay within 10 days, with the full payment window extending to 30, 60, or 90 days based on their credit rating and purchase volume with the supplier.

Resolve integrates payments, credit, and liquidity into a single infrastructure that lets tire distributors offer net 30, 60, or 90 day terms while receiving up to 90% advance within 24 hours through our B2B net terms platform.

Understanding Net 60 and Net 90 Payment Terms for Wholesale Tire Distributors

While net 30 serves as the industry baseline, net 60 and net 90 terms represent extended payment windows that cater to specific customer segments and business scenarios in tire distribution. These longer terms are typically reserved for:

• High-volume customers purchasing 10,000+ tires monthly who have demonstrated consistent payment reliability
• Seasonal businesses like agricultural equipment dealers or ski resort service providers who need to stock inventory during off-seasons but generate revenue during peak periods
• Fleet operators managing large vehicle inventories with predictable but delayed cash flow cycles
• Commercial accounts with complex procurement and payment approval processes that require additional time

The decision to offer net 60 versus net 90 terms depends on multiple factors beyond just purchase volume:

• Customer creditworthiness as demonstrated through payment history and financial stability
• Product mix—specialized or slow-moving inventory may warrant shorter terms due to lower turnover rates
• Market competition in the distributor's geographic territory
• The distributor's own supplier terms and cash flow position

Resolve's proprietary AI models evaluate thousands of buyer data points to generate dynamic, scalable credit decisions, enabling distributors to offer extended net 60 or 90 day terms tailored to each customer without delaying cash flow through our net terms management platform.

How Tire Distributors Can Use a Net 30 Calculator to Forecast Cash Flow

Effective cash flow management in tire distribution requires accurately forecasting when payments will actually arrive versus when they're contractually due. While net 30 terms specify payment within 30 days, businesses typically wait 40.3 days on average to receive payments, creating a critical gap that must be planned for.

Manual Net 30 Calculation Formula

Distributors can calculate their expected cash flow using this basic formula:

Expected Cash Inflow = (Total Monthly Invoices × Percentage Paid Within Terms × Average Days to Pay) + (Total Monthly Invoices × Percentage Paid Late × Average Days Late)

For example, if a distributor issues $500,000 in monthly invoices with 60% paid within net 30 terms (averaging 35 days) and 40% paid late (averaging 50 days):

• Expected cash inflow timing = (500,000 × 0.6 × 35) + (500,000 × 0.4 × 50) = $20,500,000 day-equivalent
• Average days to collect = $20,500,000 ÷ $500,000 = 41 days

This calculation reveals that despite offering net 30 terms, the distributor should plan for 41-day collection cycles.

Resolve's AI-driven accounts receivable automation platform automates your entire net terms workflow from invoice to payment, reducing DSO, accelerating cash flow, and transforming your customer's payment experience with smart bookkeeping automation that maps transaction data in real time.

Payment Terms COD vs. Net Terms: Which Is Right for Your Tire Business?

The choice between cash on delivery (COD) and net terms represents a fundamental strategic decision that impacts both competitive positioning and cash flow management in tire distribution.

Pros and Cons of COD for Tire Distributors

Advantages of COD:

• Immediate cash flow—no waiting period between delivery and payment
• Eliminated credit risk—no exposure to customer default or late payments
• Simplified accounting—no accounts receivable tracking or collections management
• Reduced administrative burden—no credit applications or ongoing credit monitoring

Disadvantages of COD:

• Limited market reach—excludes customers with cash flow constraints who represent significant sales opportunities
• Competitive disadvantage—most established tire distributors offer net terms as standard practice
• Reduced customer loyalty—inflexible payment terms can drive customers to competitors

How Net Terms Increase Customer Order Frequency

Net terms directly impact customer purchasing behavior by:

• Expanding buying power—customers can purchase larger quantities without immediate cash outlay
• Enabling strategic inventory building—retailers can stock seasonal items or capitalize on manufacturer promotions
• Reducing transaction friction—eliminating the need for credit card fees or immediate payment approvals
• Building long-term relationships—demonstrating trust and partnership through credit extension

Resolve's B2B payments platform supports any payment structure through a branded portal offering ACH, credit card, wire, or check, with LLM-powered invoicing workflow ensuring every transaction is synced and reconciled automatically.

Top Payment Terms Examples Used by American Tire Distributors and ATD Tires

The tire distribution industry operates under established payment term conventions that reflect the capital-intensive nature of inventory management and the seasonal buying patterns of retailers. Major distributors like American Tire Distributors (ATD) and other national chains have standardized practices that smaller distributors often benchmark against.

Industry-standard payment term structures include:

• 2/10 Net 30—2% discount for payment within 10 days, full payment due within 30 days
• Net 30/60/90 DOI—one-third of invoice amount due at 30 days, one-third at 60 days, one-third at 90 days from date of invoice
• Seasonal payment arrangements—extended terms during slow periods with payment due after busy seasons
• Volume-based tiered terms—longer payment windows for higher monthly purchase volumes

The specific terms offered depend heavily on the customer's relationship with the distributor, with distributors buying 10,000 to 12,000 tires monthly receiving much more lenient terms than those purchasing 500 tires monthly. 

This volume-based approach reflects the mutual benefit of high-volume relationships—distributors secure consistent business while customers gain payment flexibility.

Most tire suppliers are notably strict about credit, and many warehouses maintain no-return policies where ordered tires belong to the buyer permanently, or if returns are accepted, a 15 percent restocking fee is charged.

Finding Tire Distributors Near Me in Georgia: What Payment Terms to Expect

Geographic location significantly influences payment term expectations and flexibility in tire distribution. When searching for "tire distributors near me" in Georgia or other regions, several factors affect the terms available:

How Location Affects Payment Term Flexibility

• Major metropolitan areas—Distributors in Atlanta and other large Georgia cities typically offer more standardized terms due to higher competition and established customer bases
• Near-metro regions—Distributors serving suburban areas may offer more flexible terms to compete with larger chains
• Rural areas—Limited competition in rural Georgia can result in either more or less flexible terms depending on the distributor's market position

The delivery logistics in different regions also impact payment structures. In major metropolitan market areas, tire distributors can move inventory to retailers within an hour's notice, while in near-metro areas delivery takes within a day, and in rural areas lead time may extend up to a week. 

This delivery timing affects how distributors structure payment terms, with longer lead times sometimes warranting more flexible payment arrangements.

Regional relationships also play a crucial role—local Georgia distributors often have deeper customer relationships that enable more customized payment solutions based on individual retailer needs and seasonal business cycles.

Trade Credit and Trade Credit Insurance for Tire & Wheel Distributors

Trade credit represents the foundation of B2B relationships in tire distribution, but it comes with inherent risks that require careful management. Trade credit insurance provides protection against customer default, but alternative solutions can offer more comprehensive risk mitigation.

What Is Trade Credit Insurance?

Trade credit insurance is a policy that protects businesses against the risk of non-payment by customers due to insolvency, bankruptcy, or protracted default. For tire distributors, this insurance can cover a percentage of outstanding receivables, providing a safety net against bad debt losses.

When to Use Trade Credit Insurance vs. Invoice Financing

While trade credit insurance protects against loss, it doesn't solve the fundamental cash flow timing issue. Invoice financing solutions like Resolve's non-recourse model provide both risk protection and immediate liquidity.

Resolve is non-recourse financing (and is not a loan), meaning all cash advances are yours to keep; Resolve takes on the credit assessment, credit decision, and the majority risk of late payments or defaults, functioning as built-in trade credit insurance through our alternative to factoring platform.

How to Offer Net 30/60/90 Terms Without Hurting Your Cash Flow

The fundamental challenge of offering net terms is maintaining healthy cash flow while extending credit to customers. Traditional approaches require significant working capital reserves, but modern solutions enable distributors to offer competitive terms while receiving immediate payment.

Invoice Advance Solutions for Tire Distributors

Invoice advance solutions allow distributors to receive a significant percentage of their invoice value immediately while customers maintain their full payment terms. This approach:

• Eliminates cash flow gaps between paying suppliers and collecting from customers
• Reduces working capital requirements for inventory purchases
• Enables competitive payment terms without financial strain
• Transfers credit risk to specialized financing providers

Resolve underwrites your customers in real time and advances up to 90% of your invoice value within 24 hours, allowing you to offer extended net terms or installment options tailored to each customer without delaying your cash flow through our B2B net terms platform.

Automating Net Terms with Ecommerce and Accounting Integrations

The digital transformation of B2B payments requires tire distributors to integrate net terms seamlessly into their existing technology infrastructure. Modern solutions support both ecommerce platforms and accounting systems to create unified payment experiences.

Integrating Net Terms into Your Tire Ecommerce Platform

Ecommerce integration enables tire distributors to offer net terms at checkout while maintaining operational efficiency:

• Instant credit decisions during the online ordering process
• Seamless checkout experience with net terms presented as a payment option
• Automated invoice generation upon order completion
• Real-time credit limit updates based on customer payment history

QuickBooks and ERP Sync for Payment Term Automation

Accounting integration ensures that all net terms transactions are automatically recorded and reconciled:

• Automatic transaction syncing to accounting software
• Real-time accounts receivable updates
• Automated payment application when customers pay
• Comprehensive reporting on customer payment patterns

Resolve fits directly into your B2B ecommerce and accounting stack with instant plug-ins, flexible APIs, and automated syncing for QuickBooks Online, Xero, NetSuite, Sage Intacct, Magento 2, Shopify, BigCommerce, and WooCommerce through our ecommerce integrations for net terms.

Smart Credit Checks: Approving Tire Buyers for Net Terms Instantly

Credit evaluation is the foundation of successful net terms programs, but traditional credit check processes can create friction and delays. Modern AI-powered solutions enable instant credit decisions without customer interaction.

How AI-Powered Credit Checks Work for Tire Buyers

AI-powered credit checks analyze thousands of data points to assess customer creditworthiness:

• Business registration and legal status verification
• Payment history analysis from trade references and credit bureaus
• Financial health indicators from public records and business activity
• Risk scoring based on industry-specific patterns and behaviors

Instant Credit Decisions Without Customer Friction

The most effective credit check processes require minimal customer input while delivering comprehensive risk assessment. Resolve provides personalized business credit checks free of charge, requiring only your customer's business name and address and delivering results within 24 business hours; our experts—formerly of Amazon, PayPal, and Fortune 500 firms—deliver deeper credit insights than traditional bureaus through our business credit check platform.

Managing Collections and Payment Reminders for Net 30/60/90 Invoices

Effective collections management is essential for maintaining healthy cash flow and customer relationships in tire distribution. Automated systems reduce administrative burden while maintaining consistent communication.

Automating Payment Reminders for Tire Distributors

Systematic payment reminders should follow a structured timeline:

• 10 days before due date—Encourage early payment discount capture
• 3 days before due date—Final reminder before payment is due
• On the due date—Confirmation of payment expectation
• 7, 15, and 30 days past due—Escalating reminders for overdue accounts

Resolve uses AI agents to manage workflows, automate payment reminders, and reduce friction in collections, streamlining credit, invoicing, and collections while empowering finance leaders to scale operations with precision and without manual overhead through our accounts receivable automation platform.

Why Offering Net Terms Increases Sales for Tire & Wheel Distributors

Net terms directly impact sales performance by expanding customer buying power and strengthening business relationships. In an industry with high and increasing levels of competition, payment flexibility represents a significant competitive advantage.

How Net Terms Drive Larger Tire Orders

Net terms enable customers to:

• Purchase larger quantities without immediate cash constraints
• Build strategic inventory for seasonal demand or manufacturer promotions
• Consolidate orders to reduce shipping costs and administrative burden
• Invest in higher-margin products like specialty tires or wheel packages

Improving Customer Retention with Flexible Payment Terms

Long-term customer relationships benefit from net terms through:

• Demonstrated trust in the business partnership
• Reduced transaction friction compared to immediate payment requirements
• Alignment with industry expectations where net terms are standard practice
• Competitive differentiation against distributors with inflexible payment policies

Resolve helps you give your buyers the credit they need to expand their budgets and pull the trigger on larger purchases, providing your buyers a dedicated line of credit while Resolve pays you upfront for the Net 30-60 terms billed to your customers through our Resolve for sellers platform.

Frequently Asked Questions

What is the difference between net 30, net 60, and net 90 payment terms?

Net 30, net 60, and net 90 indicate the number of days customers have to pay after the invoice date. Net 30 is the industry baseline, while net 60 and 90 are typically reserved for high-volume customers or seasonal businesses. The tire industry commonly uses a "2/10 30 60 90" structure offering a 2% discount for 10-day payment.

How do tire distributors calculate net 30 payment terms?

Net 30 typically begins from the invoice date (Net 30 DOI), including all calendar days. For example, an invoice dated January 15th with Net 30 DOI terms would be due February 14th. The average collection period formula is: (Share paid on-time × Avg days on-time) + (Share paid late × Avg days late).

Can I offer net terms without risking cash flow?

Yes, through non-recourse invoice advancement solutions like Resolve's platform, distributors can offer net 30/60/90 terms while receiving up to 90% of invoice value within 24 hours. This transfers credit risk to the financing provider while providing immediate liquidity for operations.

What payment terms do large tire distributors typically use?

Large distributors often use the "2/10 net 30" structure (2% discount for 10-day payment, otherwise net 30), with extended 60–90 day terms for high-volume customers based on credit rating and purchase volume. Volume-based tiered terms are common industry practice.