The workable rule for a brand taking its first stockists is short: every opening order is paid before it ships, and terms are something an account earns by ordering again and paying on time. Everything else in a payment terms policy is detail hung off that sentence.
It matters more than it sounds, because wholesale changes the shape of your cash. On your Shopify store money settles two days after the sale. In wholesale you buy materials, spend a week making the order, ship it, and then wait a month. A brand that grants terms to everybody in its first season can be profitable on paper and unable to pay a supplier in the same week.
The terms a small brand actually needs
Three, and no more than three.
Prepayment. The invoice is issued, the shop pays by card or transfer, and the order ships. This is the default for every new account and it is not unusual, so you do not need to justify it.
Net thirty. The invoice is dated the day the order ships and payment is due thirty days later. This is the standard in independent retail and what most established shops will eventually ask for. What it means in practice, including how the clock is counted, is covered in net 30 terms.
A deposit split. Half on order, half before shipping, or half on order and the balance at net thirty. This is the one to reach for on large orders from accounts you do not know well, and for anything you have to manufacture specially.
Net sixty exists and some larger retailers insist on it. For a small brand it is a financing decision rather than a payment decision, and it should come with a price that reflects the two months of your money they are holding.
Why the first order is prepaid, every time
Because you know nothing about the account yet, and the first order is the one most likely never to be paid.
A shop placing a first order with a brand it discovered last week has no relationship to protect. If the season goes badly, the invoice they stop paying is the one from the supplier they have no history with. That is not cynicism, it is how any business triages a bad month.
There is also a practical benefit. Asking for prepayment on the opening order filters out the accounts that were never going to be real. A buyer who will not put a card on a two-hundred-and-fifty-dollar first order was not planning to build a relationship with your brand.
Say it as a policy rather than as a judgement about them. Opening orders are prepaid, terms are available from the second order for accounts in good standing. Nobody argues with a policy. People argue with what feels like suspicion.
What granting terms actually costs
Run the numbers before you decide it is a small favour.
A candle brand with ten accounts each ordering five hundred dollars every quarter is doing twenty thousand dollars a year in wholesale. If all ten are on net thirty and half of them pay at forty-five days, the brand is carrying roughly two thousand five hundred dollars of other people's inventory at any moment. That money is already spent on wax, jars and labels.
Now add a gift season. Eight of the ten order in the same three weeks ahead of the holidays. The brand ships eight thousand dollars of product, has paid maybe four thousand three hundred for the materials, and will see the revenue in December. November is the month where a growing brand runs out of cash.
Two habits prevent it. Stagger terms rather than granting them to everyone at once, and keep prepayment on seasonal orders that are larger than the account's normal size. A shop that usually orders five hundred dollars and suddenly wants two thousand is either having a great year or is about to have a problem, and you cannot tell which.
How to check an account before extending credit
You do not need a credit bureau. You need twenty minutes and a few questions.
- How long has the shop been trading? A business with a five-year-old storefront and a stocked website is a different risk from one that opened in March.
- Does the shop have a physical address with real photos, or only a social account? Physical premises with a lease are a commitment.
- Who signed the order, and is that person the owner or a buyer with authority? Getting this wrong is common enough that it is worth confirming in writing.
- Have they paid you before, on time, without being chased?
For the first year, the fourth question is the only one that matters much. Terms after two clean prepaid orders is a defensible rule and it costs you almost nothing to enforce.
If you are selling through a marketplace, the platform often pays you on its own schedule and handles the shop's credit itself, which is one of the genuine reasons to be on one early. That trade is weighed up in wholesale marketplace vs own website.
Getting paid on time without chasing
Most late payment is administrative rather than deliberate, which means it responds to process.
Put the due date on the invoice as a date, not as a phrase. Thirty days from shipping is ambiguous; a specific date is not.
Send the invoice the day the order ships, not when you remember. Invoices sent late get paid late by the same margin.
Send a short reminder three days before the due date. This one habit collects more money than every late fee ever written into a terms document, because it lands while the shop is doing its payment run rather than after.
Write a late fee into your terms anyway, and use it rarely. Its purpose is to make the second reminder carry weight.
And stop shipping to an account with an overdue invoice. Not as punishment, as policy, stated once when you grant the terms. The fastest way to turn a slow payer into a bad debt is to keep sending them product while the balance grows.
If you sell on Shopify, most of this can be automated rather than remembered, which is what the native business-to-business tooling is for. The setup is described in Shopify B2B net terms.
Where payment terms live
On the terms page, on the line sheet, and on the invoice itself. Three places, same wording. Payment terms that exist only in the email where you agreed them are the ones that get disputed six months later when the buyer who agreed them has left the shop.
The wider document these sit inside, including late payment, damages and cancellation, is covered in wholesale terms and conditions.
Questions brands ask about wholesale payment terms
Can I take a card for an order on terms? You can keep a card on file and charge it on the due date, which many small brands now do. Say so up front. Charging a card the buyer did not expect you to hold is a good way to lose an account.
Do payment terms belong in the discount conversation? They are part of the same trade. A buyer asking for a lower price can sometimes be offered terms instead, and a buyer asking for terms can sometimes be offered a small prompt-payment saving for paying up front.
What about international accounts? Prepay for longer, usually for the first several orders, and quote in your own currency. Chasing an unpaid invoice across a border is not a realistic use of a small brand's week.
How many accounts on terms is too many? When the total amount outstanding at any moment is more than you could comfortably lose, you have gone too far, whatever the number of accounts is.
If you are deciding how much credit risk a channel is worth before you commit to it, it helps to see the kind of buyer you would be selling to. Paste a product link into WholesalePilot and look at the preview of retailers and distributors that stock similar products: a channel made of long-established regional shops carries different risk from one made of new independents.