How to Offer Wholesale Net Terms


Net terms can be risky. They require you to send products to buyers without payment for 30, 60, or even 90 days. You're taking a big risk by extending your payment window that long. During that time, the buyer has your products and your payment. Meanwhile, you're hoping that they won't ghost you. We want to make sure that doesn't happen!


1. Require a minimum order number

In your wholesale contract, make it clear who is eligible for net terms. Typically, they should place a certain number of orders with you before you'll consider it.

How to do it: Make it clear in your wholesale contract that net terms are only granted after 3 orders and an approved net terms application.


2. Require a credit application

Buyers need to complete an application form to verify their company information, approved buyers, current net accounts, and business bank information.

How to do it: Create a net terms application for potential buyers. Thoroughly vet each application: call references and banks to ask about histories of nonpayment. If you're not comfortable extending net credit, it's okay to tell buyers that you cannot extend any net terms at the moment, but to check back in a few months.


3. Require a signed net terms contract

If you set clear expectations from the start, buyers are more likely to pay on time. Here are some policies that may protect you:

  • Clearly state that the products are being sold on net terms

  • Describe what the terms are: 30, 60, 90 days

  • State the fee for nonpayment: a percentage of the balance due is a good idea

  • State when the fees apply: daily, weekly, monthly, annually

  • Inform them that future orders will not be sent until past due balances are paid

  • If the matter goes to collection, they will be responsible for legal fees

  • Disputes will be handled in your home state courts

  • Any changes to these terms must be in writing

How to do it: You should already have a wholesale contract in place to set policies on minimum order amounts, payment methods, and shipping. Create a separate contract for net term buyers.

BlogNicole SwartzSales