Net 30/60/90 Terms – Guide for Wholesale Distributors

Net payment terms are the lifeblood of wholesale distribution, enabling businesses to purchase inventory now and pay later—fueling growth while managing cash flow. Yet these same terms can become a double-edged sword, with over half of wholesale companies identifying late payments as their main cash flow challenge. 

For distributors operating on thin margins, offering Net 30, 60, or 90 terms without proper risk management can tie up critical working capital or lead to bad debt, which averages 8% of all B2B credit sales in the United States. 

The solution lies not in avoiding net terms, but in implementing them strategically with the right tools and safeguards. Resolve's B2B net terms platform streamlines this entire process by combining credit underwriting, invoice financing, and payment collection into a single system that lets you offer flexible terms while getting paid in 1 day instead of 60.

Key Takeaways

• Net terms (30/60/90 days) are deferred payment agreements that allow B2B customers time to pay after receiving goods or services
• 52.3% of wholesale companies identify late payments as their main cash flow challenge
• Bad debts average 8% of all B2B credit sales in the United States
• Offering net terms can significantly boost sales and build customer loyalty but requires careful cash flow management
• Early payment discounts (like 2/10 Net 30) can encourage faster payment while maintaining customer flexibility
• Automated systems and proper credit evaluation are essential for successfully managing extended payment terms
• Non-recourse financing solutions let you offer net terms while transferring payment risk to a third party

What Are Net 30 Terms and How Do They Work

Net terms represent a fundamental aspect of B2B commerce, particularly in wholesale distribution where transaction values are substantial and business relationships are long-term. 

At its core, "Net 30" means the customer has 30 days from the invoice date to pay the full amount owed. Similarly, Net 60 provides 60 days, and Net 90 extends the payment window to 90 days. These terms function as interest-free trade credit, allowing buyers to receive and potentially resell goods before needing to settle their accounts.

For wholesale distributors, net terms serve multiple strategic purposes:

• Sales Enablement: Customers with limited immediate cash can still purchase necessary inventory
• Competitive Differentiation: In industries where net terms are standard, not offering them puts you at a disadvantage
• Relationship Building: Extending credit signals trust and fosters long-term business partnerships
• Inventory Velocity: Buyers can maintain optimal stock levels without immediate cash outlays

The wholesale distribution industry often sees Days Sales Outstanding (DSO) around 30–50 days, depending on the sub-sector.

Net 30 vs Net 60 vs Net 90 Explained

While all net terms provide payment flexibility, they serve different purposes and carry varying levels of risk:

Net 30 Terms

• Most common payment term in business transactions
• Suitable for new customer relationships or standard purchases
• Lower risk profile with quicker cash conversion
• Industry standard for many wholesale categories

Net 60 Terms

• Extended timeline for larger orders or established customers
• Balances customer flexibility with reasonable risk management
• Often used for seasonal inventory builds
• Requires more robust credit monitoring

Net 90 Terms

• Longest standard payment window
• Typically reserved for major retailers or strategic accounts
• Highest risk exposure but strongest relationship signal
• May be necessary to compete for large contracts

The choice between these terms should be based on customer creditworthiness, order size, relationship history, and your own cash flow requirements. Net 30 and Net 90 are the most common payment terms in business transactions, with Net 60 serving as a middle ground for specific situations.

Net 30 Calculator: How to Calculate Payment Due Dates

Accurately calculating payment due dates is essential for both suppliers and buyers to avoid late fees and maintain business relationships. The calculation seems straightforward but contains nuances that can affect payment timing.

Step-by-Step Calculation Guide

• Identify the starting point: Most net terms begin from the invoice date, but some may start from the delivery date or service completion date. This should be clearly specified in your terms.
• Count business days vs. calendar days: Net terms typically use calendar days, not business days. This means weekends and holidays are included in the count.
• Apply the formula: Due Date = Invoice Date + Number of Net Days
• Handle month-end scenarios: If the invoice date is January 31st with Net 30 terms, the due date would be March 2nd (or March 1st in leap years), since February doesn't have 31 days.
• Consider grace periods: Some businesses include a 5-10 day grace period before considering payments late, though this should be explicitly stated in your terms.

Common Calculation Mistakes to Avoid

• Confusing invoice date with delivery date: Always clarify which date triggers the payment clock
• Excluding weekends and holidays: Net terms typically include all calendar days
• Failing to account for month length variations: February's shorter length can trip up calculations
• Not specifying time zones: For businesses operating across multiple time zones, specify which time zone determines the invoice date

Tools like automated invoicing systems can eliminate these calculation errors while providing clear due date visibility to customers through branded payment portals.

Payment Terms Examples for Wholesale Distributors

Beyond basic Net 30/60/90 terms, wholesale distributors can implement various payment structures to incentivize desired customer behaviors and manage cash flow more effectively.

Industry-Specific Payment Terms

Standard Net Terms

• Net 30: Most common across industries
• Net 60: Common for larger orders or established relationships
• Net 90: Typically for major retailers or strategic accounts

Early Payment Discounts

• 2/10 Net 30: 2% discount if paid within 10 days, otherwise full amount due in 30 days
• 1/15 Net 45: 1% discount if paid within 15 days, otherwise full amount due in 45 days
• Taking a 2/10 Net 30 discount is equivalent to earning a 36.73% annualized return

Alternative Payment Structures

• COD (Cash on Delivery): Payment required at time of delivery
• Due Upon Receipt: Payment expected immediately upon invoice receipt
• Installment Terms: Large orders split into multiple payments over time
• Seasonal Terms: Extended payment windows during peak inventory periods

Customizing Terms for Different Buyers

Effective payment term management involves tailoring terms to different customer segments:

• New Customers: Start with Net 15 or Net 30 with credit limits based on verified business credit
• Established Customers: Offer Net 60 for consistent payment performers
• Strategic Accounts: Consider Net 90 for high-volume, reliable customers
• High-Risk Customers: Require deposits or shorter payment terms

Resolve's Net Terms Management platform automates this customization process by evaluating customer creditworthiness in real-time and suggesting appropriate terms and credit limits, letting you manage every aspect from smart credit checks to payment and collections management.

Finding Wholesale Distributors Near Me That Offer Net Terms

For businesses seeking suppliers that offer flexible payment terms, the process requires both strategic searching and qualification preparation.

Regional Distributor Networks

Local and regional wholesale distributors often offer more flexible terms than national chains because they can evaluate customers more personally and build direct relationships. To find these suppliers:

• Industry Associations: Trade associations often maintain member directories with payment term information
• B2B Marketplaces: Platforms like ThomasNet or Alibaba connect buyers with verified suppliers
• Trade Shows: Industry events provide opportunities to meet distributors and discuss terms directly
• Referrals: Existing business relationships can lead to introductions with distributors offering net terms

Qualifying for Net Terms with New Suppliers

New businesses often struggle to qualify for net terms because they lack established payment history. To improve your chances:

• Business Credit Profile: Ensure your business has a DUNS number and established credit profile
• Financial Statements: Be prepared to provide recent financial statements or bank references
• Trade References: Provide references from other suppliers who can vouch for your payment reliability
• Personal Guarantee: Some distributors may require a personal guarantee for new customers
• Start Small: Begin with smaller orders to establish a payment track record

Best Wholesale Distributors in USA with Flexible Payment Terms

National wholesale distributors typically offer standardized payment terms based on company size, credit history, and purchase volume. The largest distributors often have the resources to offer more flexible terms because they can absorb payment delays more easily than smaller suppliers.

Top National Distributors

Major wholesale distributors across various industries generally offer Net 30 as standard, with Net 60 or Net 90 available for qualified customers. These include:

• Industrial Supplies: Grainger, Fastenal, MSC Industrial Supply
• Food Service: Sysco, US Foods, Performance Food Group
• Electronics: Avnet, Arrow Electronics, Digi-Key
• Building Materials: Ferguson, ABC Supply, Beacon Roofing Supply
• Automotive Parts: NAPA Auto Parts, O'Reilly Auto Parts, AutoZone Commercial

Industry-Specific Leaders

Different industries have different payment term standards:

• Manufacturing Sector: DSO benchmarks often range from 45 to 60 days, reflecting longer production cycles
• Food Distribution: Typically Net 30 due to perishable inventory and faster turnover
• Industrial Equipment: May offer Net 60 or Net 90 for large capital purchases
• Office Supplies: Generally Net 30 with volume discounts available

Wholesale Suppliers for Resellers: Negotiating Better Terms

Resellers represent a significant customer segment for wholesale distributors, and successful negotiation of favorable payment terms can dramatically impact their cash flow and profitability.

Building Supplier Relationships

Strong supplier relationships are built on reliability and mutual benefit:

• Consistent Ordering: Regular, predictable order patterns demonstrate stability
• On-Time Payments: Perfect payment history is the strongest negotiating leverage
• Volume Commitments: Guaranteeing minimum monthly or annual purchases can justify better terms
• Exclusive Partnerships: Offering to be a primary or exclusive reseller can warrant preferential terms

Leveraging Purchase Volume

Volume is often the most effective negotiating tool:

• Tiered Terms: Negotiate escalating terms based on purchase thresholds (Net 30 up to $10K/month, Net 45 above $10K)
• Annual Reviews: Schedule annual term reviews based on the previous year's performance
• Cross-Category Purchases: Buying across multiple product categories can increase your total volume and negotiating power

Before approaching suppliers for better terms, conducting a business credit check can help you understand your current credit standing and identify areas for improvement. Resolve delivers instant, data-rich credit decisions trusted by market leaders, giving you the insights needed to strengthen your negotiating position.

Trade Credit vs Traditional Financing for Distributors

Trade credit represents a unique financing option that differs significantly from traditional business loans or lines of credit.

Advantages of Trade Credit

• No Interest Charges: Unlike loans, trade credit is typically interest-free during the payment window
• No Collateral Required: Trade credit doesn't require assets as security
• Relationship Building: Extending credit strengthens business partnerships
• Flexible Limits: Credit limits can adjust based on ongoing business performance
• Simplified Access: Often easier to obtain than traditional financing, especially for newer businesses

When to Use Each Financing Type

Trade Credit is Ideal When:

• You have established relationships with suppliers
• You need short-term working capital for inventory
• You want to preserve traditional credit lines for other purposes
• Your customers also offer you net terms (creating a payment cycle)

Traditional Financing is Better When:

• You need longer-term capital (beyond 90 days)
• You require larger amounts than suppliers can provide
• You're starting a new business without supplier relationships
• You need capital for purposes other than inventory (equipment, expansion, etc.)

Resolve's factoring alternative offers a middle ground, providing non-recourse financing that's not a loan, with no twists, turns, or hidden fees. This approach combines the relationship benefits of trade credit with the cash flow security of immediate payment.

Trade Credit Insurance: Protecting Your Net Terms

Trade credit insurance protects businesses against the risk of non-payment by customers, providing a safety net when offering net terms.

Types of Coverage Available

• Whole Ledger Policies: Cover all customers up to specified limits
• Single Risk Policies: Cover specific high-value customers
• Political Risk Coverage: Protects against non-payment due to political events in foreign markets
• Non-Recourse Financing: Transfers payment risk to a third party without recourse to you

Cost-Benefit Analysis

Trade credit insurance typically costs 0.1% to 0.3% of insured sales, depending on customer risk profiles and coverage limits. For businesses with significant accounts receivable exposure, this cost is often justified by:

• Bad Debt Protection: Coverage against customer insolvency or protracted default
• Increased Sales Capacity: Ability to offer more generous terms with reduced risk
• Improved Bank Relationships: Insured receivables may be viewed more favorably by lenders
• Peace of Mind: Reduced stress about customer payment reliability

Resolve's AI-powered accounts receivable platform provides an alternative approach to risk management by automating the entire net terms workflow from invoice to payment—reducing DSO, accelerating cash flow, and transforming your customer's payment experience while minimizing bad debt exposure.

Managing Cash Flow with Net 30/60/90 Terms

Effective cash flow management is critical when offering net terms, as the timing gap between paying suppliers and receiving customer payments can create liquidity challenges.

Optimizing Payment Cycles

• Stagger Payment Terms: Negotiate different payment terms with different suppliers to spread out cash outflows
• Align Customer and Supplier Terms: Try to match your customer payment terms with your supplier terms
• Monitor DSO Closely: Track Days Sales Outstanding to identify payment delays early
• Implement Early Payment Discounts: Offer small discounts to encourage faster customer payments

Tools for Cash Flow Management

• Aging Reports: Regular accounts receivable aging reports identify overdue invoices
• Cash Flow Forecasting: Project cash inflows and outflows to anticipate shortfalls
• Invoice Factoring: Sell invoices to third parties for immediate cash (though this typically involves fees and may be recourse)
• Advance Payments: Solutions like Resolve's B2B Payments Platform can provide a substantial percentage upfront on approved invoices, letting you maintain customer relationships while securing immediate cash flow 

The challenge is significant: 87% of businesses report that they are typically paid after their invoice due date, and many companies still perform a significant portion of their payment operations manually. 

Automating Net Terms Management for Wholesale Operations

Manual management of net terms becomes increasingly difficult as customer bases grow and transaction volumes increase. Automation addresses this challenge through integrated systems that handle the entire credit-to-cash cycle.

Integration with Existing Systems

• ERP Integration: Connect with systems like NetSuite, Oracle, or SAP for real-time data synchronization
• Accounting Software: Automatic syncing with QuickBooks, Xero, or other accounting platforms
• E-commerce Platforms: Integration with Shopify, BigCommerce, Magento, and WooCommerce for online orders
• Banking Systems: Direct connections to banking platforms for payment processing and reconciliation

ROI of Automation

• Reduced DSO: Automated payment reminders and follow-ups can significantly reduce Days Sales Outstanding
• Lower Administrative Costs: Eliminate manual data entry, invoice generation, and payment tracking
• Improved Accuracy: Reduce errors in invoicing, payment application, and reconciliation
• Better Decision Making: Real-time dashboards provide insights into customer payment patterns and credit risk

Resolve's integrations with the financial tech stack fit directly into your B2B ecommerce and accounting stack—with instant plug-ins, flexible APIs, and automated syncing that streamline the entire net terms process while maintaining your existing business systems.

Frequently Asked Questions

What's the difference between Net 30 and 2/10 Net 30 terms?

Net 30 terms require full payment within 30 days of the invoice date. 2/10 Net 30 terms offer a 2% discount if the invoice is paid within 10 days, otherwise the full amount is due within 30 days. 

The 2/10 Net 30 structure incentivizes early payment while maintaining the standard payment window for customers who need the full term. Financially, taking the 2% discount is equivalent to earning a 36.73% annualized return on the funds used for early payment.

How do I qualify for net terms with wholesale suppliers?

Qualification typically requires an established business credit profile, demonstrated payment history with other vendors, and financial stability. Suppliers will usually check your business credit report, verify your business license and registration, and may request financial statements or bank references. 

New businesses without established credit may need to start with shorter terms (Net 15) or provide a personal guarantee. Building relationships with smaller, local distributors can also be easier than qualifying with large national suppliers.

Can small businesses get Net 60 or Net 90 payment terms?

Yes, but it typically requires a strong payment history and financial stability. Small businesses should start with Net 30 terms and demonstrate consistent, on-time payments before requesting extended terms. Having strong business credit, providing trade references from other suppliers, and maintaining consistent order volumes can improve your chances of qualifying for Net 60 or Net 90 terms. Some suppliers may offer extended terms for larger individual orders even if your standard terms are shorter.

What happens if I pay late on Net 30 terms?

Late payments can result in late fees (typically 1-2% per month), interest charges, suspension of credit privileges, or even account cancellation. More significantly, consistently late payments can damage your business credit score and reputation, making it harder to obtain credit from other suppliers in the future. 

Some suppliers report payment history to business credit bureaus, which can affect your ability to secure financing or favorable terms elsewhere. Maintaining open communication with suppliers about any payment difficulties can help preserve relationships.

Do wholesale distributors report payment history to business credit bureaus?

Many wholesale distributors do report payment history to business credit bureaus like Dun & Bradstreet, Experian Business, and Equifax Business, though not all do so consistently. Reporting practices vary by distributor size and industry—larger national distributors are more likely to report than smaller local suppliers. 

Positive payment history can help build your business credit profile, while late payments can damage it. You can request a business credit report to see which of your suppliers are reporting your payment behavior and verify the accuracy of the information.

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.