Net 30 means the shop takes the goods now and pays the invoice thirty days after you send it. For a brand used to Shopify money landing two days after checkout, that is a real change: you fund the materials, the labour and the freight, and the cash comes back a month after the box leaves.
The rule that keeps most small brands out of trouble is narrow. New accounts prepay. Accounts that have paid two orders on time and want to grow can have thirty days. Everyone else gets a card link and a polite sentence.
What net 30 actually means, and what it does not
Net 30 is the payment window on the invoice, counted from the invoice date, not from delivery and not from when the shop sells the product. If you invoice on the fourth and ship on the sixth, payment is due on the fourth of the next month.
Two variants come up constantly. Net 30 from end of month means a shop that buys on the second and one that buys on the twenty-eighth both pay at the same time, which quietly turns into net 45 or worse. And "2/10 net 30" is an early-payment discount: pay within ten days and take a small discount off the invoice, otherwise the full amount is due at thirty. That discount is a real cost and belongs in the same budget as every other wholesale discount you hand out.
What terms are not is consignment. Under terms, the shop owns the goods the moment they ship and owes you the money whether or not a single bar sells. If a shop is asking to pay you only for what sells, that is a different arrangement entirely.
What thirty days costs a brand your size
Use soap. A bar retails at nine dollars, wholesales at four fifty, ships in cases of twelve. A mid-size account orders eight cases: ninety-six bars, four hundred and thirty-two dollars.
Your landed cost is one dollar seventy a bar, so a hundred and sixty-three dollars of that order is money you have already spent on oils, moulds, wrap and labour before the invoice exists. Grant net 30 and you are out of pocket by that amount for a month, plus whatever you paid in freight.
One account is nothing. Six accounts ordering that size in the same fortnight, which is exactly what happens before a gift season, is two and a half thousand dollars of materials funded out of your own bank account while every invoice sits unpaid. Brands do not usually fail at wholesale because the margin was bad. They get squeezed because the cash left before it came back.
So the question is never "should we offer terms". It is "how much of our own cash can sit in other people's shops at once", and that number should be written down before the first shop asks.
Who should get terms, and when
A simple ladder works better than case-by-case judgement, because case-by-case judgement is what happens at nine at night when a shop owner you like asks for a favour.
First order: prepay, always. Card, bank transfer, payment link on the invoice. No exceptions, no apology, and no discussion about how long they have been in business. Everything about the opening order is meant to be low risk on both sides.
Second order: prepay again, or a deposit. Half up front and half on despatch is a reasonable middle step for a larger reorder.
Third order onward: net 30 is reasonable if the first two were paid without chasing and the account is ordering enough that the administration is worth it.
Chains, department stores and distributors: they will tell you their terms rather than ask, and those terms will be longer than thirty days. Price that in before you accept, because it is not negotiable for a small supplier and it is a real cost of the account.
How to check an account before extending credit
You are not a bank, so keep this to twenty minutes.
Look at whether the business is real and settled: a working website, a physical address, opening hours, a phone that is answered, a social account with recent posts rather than a graveyard from two years ago. A shop that has traded in the same place for three years is a better credit risk than one that opened in March, regardless of how enthusiastic the owner is.
Ask for two trade references, meaning two other brands they buy from, and actually email one. Brands answer each other honestly about this and it takes a sentence.
Get a signed order form or terms acknowledgement with the legal business name, the billing contact and the address on it. Not because you plan to sue anyone, but because "who exactly owes this money" is the question that becomes impossible to answer eight months later.
Then set a credit limit and say it out loud: this account can have four hundred dollars of unpaid invoices at a time, and the next order ships when the last one is paid. Limits are not insulting. They are what lets you say yes.
Write the policy once, on one page
Put it in your terms document, on your line sheet and in the account sign-up form, in the same words everywhere.
- Payment terms: opening order prepaid; net 30 available after two orders paid on time, up to a stated credit limit.
- What starts the clock: the invoice date.
- Late fee: a flat charge after a stated number of days past due. State it even if you rarely apply it, because having it written is what makes the reminder email uncomfortable to ignore.
- Held orders: new orders ship when the account is current.
- Who to pay and how: bank details, card link, and the email that receives remittances.
If you sell through Shopify's B2B tooling, most of that can be enforced rather than requested: accounts tagged with a payment-terms template, orders that check out on account rather than card, and price lists that only those accounts see. The mechanics are in Shopify net terms, and the wider set of controls in Shopify B2B payment terms.
What to do when an invoice goes past due
Assume it is an accident, because usually it is. A shop owner is running a till, a staff rota and eighty supplier relationships, and your invoice is a piece of paper in a pile.
Day one past due: a short friendly email with the invoice attached again and the amount in the subject line. Attaching it matters more than you think, because "can you resend it" is the most common reply.
Day seven: a different channel. A phone call to the shop in the morning, before it gets busy, asking to speak to whoever handles payments. One call collects more than four emails.
Day fourteen: the order that is currently packed does not ship, and you say so plainly. Holding stock is the only leverage a small supplier has, and it works because the shop wants the goods.
Day thirty: stop selling to them on terms permanently, offer prepay only, and move on. Chasing further costs more in attention than the invoice is worth.
The habit that prevents most of this is boring: invoice the day you ship, put the due date in bold, and reconcile every Friday morning so nothing is discovered at day sixty.
Alternatives that give you most of the upside
Terms exist because shops are trying to buy stock with money they have not earned yet. There are cheaper ways to solve that for both of you.
Take a deposit and balance: half now, half on despatch. Most shops accept it and your exposure halves.
Offer the early-payment discount rather than longer terms. A small discount for paying inside ten days often appeals more than thirty days of credit, and you keep the cash.
Split the order. If a shop wants twelve cases and you are nervous, ship six now and six in four weeks, each prepaid. They get stock flow, you get paid twice.
Or route the account through a wholesale marketplace, which pays you on its own schedule and carries the retailer's credit risk itself. That is a real service and part of what the commission buys.
Keep the minimum high enough that the whole exercise is worth it either way. A three-hundred-dollar order that pays in thirty days is a business decision. A sixty-dollar order that pays in thirty days is a hobby with paperwork, which is why minimum order quantity and terms should be set in the same sitting.
Questions brands ask about net 30
Is it rude to refuse terms to a new shop? No. Every experienced buyer has been asked to prepay an opening order, and most expect it. What looks unprofessional is having no stated policy and deciding in the moment.
Do I need to offer terms to compete? Not at the opening-order stage. It starts to matter once accounts reorder regularly, and by then you have a payment history to base the decision on.
What if a distributor asks for sixty days? Treat it as a price question. Longer terms are a cost, so either the volume justifies it or the price does, and it is fair to say that out loud during the negotiation.
How do I know which shops are worth extending credit to at all? Start by choosing better accounts. Pasting your product link into WholesalePilot shows a preview of the retailers and distributors that already stock products like yours, which is a more useful filter than judging whoever emailed you last.