Once you have decided to offer payment terms at all, the next question a buyer asks is how long. Net 30 vs net 60 sounds like a detail, but the difference is a full extra month of your money sitting in someone else's bank account on every order, forever. For a small brand with inventory to fund, that month can be the difference between taking the next order and turning it down. This guide covers what the extra 30 days actually costs, which buyers ask for net 60 and why, and a decision rule for when to say yes, when to counter, and when to hold at net 30.
If you are still deciding whether to offer terms at all, start with net 30 payment terms for wholesale; this article assumes you have said yes to terms and are choosing the length.
What the terms mean
Net 30 means the invoice is due 30 days after the invoice date. Net 60 means 60 days. Some retailers count from the date they receive the goods rather than the invoice date, which quietly adds shipping time on top, so check which the buyer means.
Neither number describes when you will actually be paid. Large buyers commonly pay a little after the due date, and their payment runs happen on a schedule, so net 30 often lands in your account at 35 to 45 days, and net 60 at 65 to 75. Plan on the realistic number, not the one on the invoice.
What the extra 30 days really costs
The cost of net 60 is not a fee; it is cash you do not have. Here is the simple way to see it.
Say a retailer orders 2,000 dollars of product a month. On net 30, at any moment you have roughly one month of sales outstanding: about 2,000 dollars owed to you. On net 60, you have two months outstanding: about 4,000 dollars. The extra 2,000 dollars is money you already spent on inventory, shipping and packaging, and cannot spend again until it comes back.
Now scale it. Five accounts like that on net 60 instead of net 30 means an extra 10,000 dollars permanently tied up. That is 10,000 dollars of stock you cannot buy, or a credit line you have to pay interest on. If you finance it by factoring the invoices, the extra 30 days has a direct fee attached. Either way, net 60 is a real cost, and it belongs in your pricing for that account.
There is a second cost: risk. The longer an invoice is open, the more can go wrong at the buyer between shipment and payment. Net 60 doubles the window.
Who asks for net 60, and why
Different buyers ask for different terms, and the reason behind the request tells you how to respond:
- Independent stores and small specialty retailers usually expect to pay on order or net 30. Net 60 from a small store is unusual and worth a closer look at their finances.
- Regional and national chains commonly have standard terms, and net 60 is a normal starting point for many of them. It is policy, not a comment on you, and it is often negotiable for smaller suppliers.
- Distributors ask for net 30 to net 60 because they are themselves waiting on their retailers. The longer they can push you, the less of their own cash they use.
- Buyers with cash flow trouble ask for the longest terms they can get. This is the case to watch for, and a credit check on a new buyer is how you tell it apart from a chain with a standard policy.
A decision rule for net 30 vs net 60
Use three questions, in order.
- Can you afford the cash gap? Work out the outstanding balance the account would carry at net 60 and ask whether you can fund it without starving other accounts. If not, the answer is net 30 or a counter, regardless of how big the buyer is.
- Is the buyer good for it? Trade references, a credit report, and a history of paying on time with other suppliers. A strong buyer on net 60 is safer than a shaky one on net 30.
- Is the order big enough to justify it? Net 60 on a 500 dollar order is not worth the admin. Net 60 on a recurring 10,000 dollar chain order that you could not otherwise win may be.
If the answer to all three is yes, net 60 is a reasonable price of admission for a large account. If any is no, counter.
How to counter a net 60 request
A buyer who asks for net 60 rarely walks away over net 30. The useful middle positions:
- Net 30 with an early payment discount. Offer a small discount, for example 2 percent off if paid within 10 days, and net 30 otherwise. Some accounts payable departments will take the discount every time, which gets you paid fast.
- Net 30 on the first orders, net 60 after a clean payment history. Terms are earned. Three orders paid on time is a fair threshold.
- Net 60 with a higher price. If the account insists on net 60, price it in. A slightly higher wholesale price for that account is honest and usually accepted, because the buyer knows what the terms are worth.
- Net 60 on a smaller opening order. Cap the exposure while you learn how they pay.
- A deposit plus net terms on the balance. Common for a first large order. Wholesale payment terms covers deposits and the rest of the protection toolkit.
Whatever you agree, put it on the invoice and in your written terms. Buyers pay to what the paperwork says, not to what was discussed on a call.
A worked example
A pet brand gets its first regional chain order: 6,000 dollars a month, and the buyer's standard terms are net 60. The brand's cost on that order is about 3,600 dollars a month. On net 60 it would carry roughly 12,000 dollars of receivables at any time, meaning 7,200 dollars of its own cash permanently out the door, plus the risk.
The brand counters with net 30 for the first three orders, then net 60 after a clean payment history, and offers a 2 percent discount for payment within 10 days. The buyer accepts net 30 for the trial period. After three on-time payments, the brand moves the account to net 60 and, now knowing the chain pays reliably, arranges a factoring line as a backstop for the months when it needs the cash sooner. The chain got its standard terms; the brand got a look at how the chain pays before betting two months of cash on it.
The short version
Net 30 is the default. Net 60 is a concession you make for large, creditworthy, recurring accounts when you can fund the gap or price it in. Everyone else gets net 30, an early payment discount, or a counter. The number is negotiable far more often than buyers let on.
Good terms are only worth negotiating with buyers who will actually order. WholesalePilot finds the distributors, chains and independent stores that fit your product, verifies their buyer emails, sends the outreach in your name and books the calls, so you are choosing terms for real accounts instead of hypothetical ones.
Net 60 is not a payment term. It is an interest-free loan you are making to the buyer, and it should be priced like one.
Paste your product link and see the buyers you would be offering terms to, free. Start here.