Net 30 means the buyer pays the invoice within 30 days. Plain "Net 30" usually counts from the invoice date, unless your terms name another start date, such as the ship date. Net 60 means 60 days. For a wholesale brand, terms are a credit decision: you ship now and get paid later. Start new accounts on prepay or a deposit, move to net 30 after on-time payments, and offer net 60 only when an account earns it.

This page expands the payment-terms step in how to start selling wholesale.

Key takeaways

• Terms are credit. Set them per account, not as a courtesy.
• Name a start date in every terms line, and show the due date as a calendar date.
• Agree the late charge in writing before the first shipment.
• Follow up on a fixed schedule, and hold new shipments while an account is past due.
• Protect big balances with credit limits, deposits, factoring or credit insurance, and keep proof of delivery.

What does net 30 mean on an invoice?

Net 30 on an invoice means the amount due must be paid within 30 days of the invoice date, unless your terms name another start date. "Net" is the invoice total after any agreed discounts.

Other common terms:

• Net 60: payment is due 60 days after the start date.
• 2/10 net 30: the buyer can take 2% off by paying within 10 days. Otherwise the full amount is due in 30.
• Prepay: the buyer pays before you ship.

Is net 30 or net 60 better for a wholesale brand?

Net 30 is better for the brand. Net 60 is better for the retailer. Every extra day of terms is a day you pay for the retailer's stock.

Longer terms also come with more late payment. QuickBooks' small-business survey found 59% of small businesses have invoices 30+ days overdue, and 55% of net-30 businesses have overdue invoices vs 26% on immediate terms.

Offer net 60 only to accounts with a strong payment record or above a set order size, and keep a credit limit in place.

Which payment terms should each type of account get?

Use a ladder.

A credit application is the form a buyer fills in to ask for terms. It usually asks for the legal business name and address, the owners' names, a bank reference, two or three trade references from other suppliers, and a signature accepting your terms. Call the references and ask whether the account pays on time.

When does the net 30 clock start?

Plain "Net 30" is usually read as 30 days from the invoice date. Systems and retailers still count from different events, so name the start date.

Write the start date the same way on your line sheet, order confirmation and invoice, for example "Net 30 from invoice date." Next to it, print the due date as a calendar date.

What should you put in writing?

Agree on terms in writing before the first shipment, then repeat them on every order confirmation and invoice. Lead with how to order and when payment is due, and keep it to rules you'll actually enforce. Include:

1. Payment terms and start date, such as "Net 30 from ship date."
2. Accepted payment methods.
3. Deposit rules for first orders and large orders.
4. The account's credit limit.
5. The late charge.
6. A hold rule: no new shipments while any invoice is past due.
7. A deadline to dispute an invoice or report damage.

Late charges. A common wording is "1.5% per month on past-due balances, or the maximum rate allowed by law, if lower." Put the late charge in the credit application or terms the buyer accepts before the first shipment. Between merchants, UCC section 2-207 can make terms added in a written confirmation part of the contract. State courts have split on late charges that appear only on the invoice. Have a lawyer review the clause.

How do you collect from a retailer that pays late?

A simple schedule:

• Before you chase: confirm the invoice matches the PO and delivery records, and check for disputes or deductions the retailer has raised.
• A few days before the due date: a friendly reminder.
• The day after the due date: a short past-due note with the amount.
• About 15 days overdue: a call to the buyer and to accounts payable. New orders go on hold.
• 30 days overdue: a written demand, with the late charge applied if your terms allow it.
• Beyond that: a written payment plan, a collection agency or small claims court, depending on the amount.

If an account keeps paying late, move it back to prepay or a deposit. Ask for a large share of the balance now and the rest by a set date, in writing. Ship nothing new until it is current.

How do you protect a large unpaid balance?

The more one retailer owes you, the more its failure hurts. Five safeguards:

• Credit limits. Cap what each account can owe, and ship more only after payment.
• Deposits. Take part of a large order up front.
• Factoring. A factor approves each order, sets a limit per retailer and takes the credit risk on approved invoices.
• Trade credit insurance. It pays on covered invoices if a retailer fails or pays very late.
• Delivery records. Keep proof of the delivery date for every shipment.

Delivery records matter most if a retailer enters bankruptcy. Unpaid invoices are then generally unsecured claims, which often recover only part of what's owed. Goods the retailer received shortly before filing may get priority under Bankruptcy Code section 503(b)(9), and that claim depends on proof of the delivery date. Talk to a lawyer as soon as a retailer files.

How do you set up and collect on payment terms online?

In Brandboom, sellers create custom payment terms, such as Net 30, in Showroom Settings > Shipping & Payment. Buyers choose one from a dropdown on the order form. Invoices are generated from the order. Sellers can send up to three automatic unpaid-invoice reminders with a custom message. They can log payments made by check, cash or other external methods, or charge a card.

On Business and above, sellers can request a deposit, as a percentage or a dollar amount, before the buyer places the order. Buyers pay deposits by card or PayPal. A paid deposit is applied as a credit to invoices. Brandboom plans start at $50/month for the Basic plan (see all plans).

Frequently asked questions

Do net 30 terms include weekends and holidays?

Usually yes. Net terms normally count calendar days, so weekends and holidays are included. If a due date falls on a weekend, many businesses accept payment the next business day. Print the due date as a calendar date on each invoice so neither side has to guess.

Should a new boutique get net 30 on its first order?

Usually not. A first order carries the most risk because the account has no payment history with you. Ask for prepayment or a deposit, and have the boutique fill in a credit application with trade references. Once it pays its first orders in full and on time, net 30 with a credit limit is a reasonable next step.

Can I charge a late fee on a wholesale invoice?

Often, yes. A common clause is 1.5% per month on past-due balances, or the maximum rate allowed by law, if lower. Put it in the credit application or terms the buyer accepts before the first shipment, then repeat it on invoices. Rules differ by state, so have a lawyer review the wording.