Net 30 vs Net 60: Which to Offer Wholesale Buyers

A buyer asks for Net 60. Your competitor is offering it. Do you match, or hold the line at Net 30?

That question comes up in almost every wholesale deal of any size, and most merchants answer it by gut feel. The extra 30 days sounds small until you work out what it costs you across every account that gets it. This post is the head-to-head on Net 30 vs Net 60: what each term does to your cash, when the longer one is worth it, when it is just margin leaking out the door, and how to enforce whichever you pick at checkout on Shopify Plus.

What Net 30 and Net 60 actually mean

Both are net terms. The number is how many days the buyer has to pay after you invoice.

• Net 30. Full payment due 30 days after the invoice date.
• Net 60. Full payment due 60 days after the invoice date.

The difference is not 30 days of paperwork. It is 30 extra days where you have shipped the goods, covered the cost of making or sourcing them, and have not been paid. That gap is the whole decision.

The cash conversion math

The cleanest way to see the cost is your cash conversion cycle: how long a dollar is tied up between paying for inventory and collecting from the buyer. Payment terms move one part of that directly. Net 30 adds about 30 days of receivables. Net 60 adds about 60.

Here is a worked example. Say a buyer places a $20,000 order every month and your cost of goods is 40%, so each order costs you $8,000 to fulfill.

On Net 30, you typically have one order outstanding at any time. That is roughly $8,000 of your own cash deployed before payment lands.

On Net 60, you have two orders outstanding at once: this month's shipment and last month's invoice still running toward its due date. That is about $16,000 tied up, all the time, per account.

So moving one account from Net 30 to Net 60 costs you roughly $8,000 in additional working capital that stays locked up for as long as the relationship lasts. Multiply that across ten accounts and Net 60 is quietly financing $80,000 of someone else's business.

A quick heuristic: average order value times months outstanding times COGS percentage gives you the capital deployed per account. Net 30 is one month, Net 60 is two.

None of this makes Net 60 wrong. It makes it a cost you should price in on purpose instead of absorbing by default.

When Net 60 is worth it

Net 60 earns its cost in a few specific situations.

Large, committed buyers. A buyer placing $200,000 a year earns more flexibility than one placing $8,000. When the account is big enough, the carry cost is a reasonable price for keeping the relationship and the volume.

Enterprise accounts with fixed procurement cycles. Large retail chains, hospital systems, and government suppliers often have Net 60 baked into their AP process. They are not asking a favor, they are telling you how they pay. If the account is worth it, you offer the terms and build the timeline into your cash flow planning.

Competitive pressure on a deal you want. If a comparable supplier offers Net 60 and you are at Net 30, terms can be the thing that loses you the order. On a strategic account, matching can be the right call.

Proven buyers with a clean history. A buyer who has ordered for 12+ months and never paid late has given you the data to extend more credit. The risk is low because you can see it. For the deeper version of this decision, including how to gate eligibility and downgrade slow payers, see the full guide to Net 60 on Shopify Plus.

When Net 60 is just margin leakage

The same term is a mistake in the wrong place.

First orders from unproven buyers. You have no payment history. Net 60 on a first order finances a stranger for two months with nothing to go on. Payment on fulfillment or a deposit is the right default until they have cleared an order or two.

Small accounts. The carry cost is fixed overhead per account. On an $8,000-a-year buyer, 60 days of unsecured credit is not buying you loyalty worth having. Net 30 is plenty.

Buyers who already pay late. If an account routinely pays on day 70, formalizing Net 60 just tells them day 90 is fine. Tighten, do not extend.

A blanket policy. The most expensive version of Net 60 is giving it to everyone because it is easier than deciding case by case. That is how a term meant for your top accounts ends up subsidizing your smallest and riskiest ones.

The hybrid approach beats picking one

The real answer is usually not Net 30 or Net 60. It is both, applied by condition.

The problem is that Shopify's native payment terms cannot do conditional. On Shopify Plus you set one static term per company location, and it applies to every order from that account regardless of size, history, or how this particular order looks. It is Net 30 for that buyer, or Net 60, forever, until someone edits the account by hand.

That is fine for a handful of accounts that all get the same treatment. It breaks the moment your policy has any nuance. A few hybrid rules that native terms cannot express:

• Net 60 only above an order threshold. Small orders get Net 30, large committed orders get Net 60, because that is where the longer term actually buys you something.
• Net 60 only for buyers with 10+ orders. New accounts start tighter and graduate as they prove out, so credit tracks behavior instead of whatever got typed into a form on day one. That is the order-count graduation ladder.
• Net 60 by tier, with a ceiling. Gold accounts get Net 60, but any single order over $25,000 requires a deposit regardless of tier.
• Automatic downgrade on slow pay. An account tagged slow-pay reverts to Net 30 at checkout, no matter what their normal term would be.

None of these are exotic. They are what a credit manager at any traditional distributor does in their head. The issue is doing them reliably at checkout, on every order, without anyone remembering to.

When native Shopify settings are not enough

For the simple case, native payment terms are fine. Set one term per company location and it applies to every order. If every wholesale account gets the same treatment, that is adequate.

What native settings cannot do is anything conditional. They cannot give Net 60 only above an order size, only after 10 orders, or only to a tier, and they cannot downgrade a slow payer on their own. For any of that you need Shopify's Payment Customization Functions, either as a custom build with a developer or through a rules app built on top of them.

Enforcing whichever policy you pick

Once you have decided who gets Net 30 and who gets Net 60, the terms have to apply themselves. Setting them per account by hand is where good policies quietly rot: someone forgets, an account that earned Net 60 never gets it, a slow payer never gets downgraded.

That is what I built TermStack for. You write the policy as ordered rules: Net 60 for Gold-tier buyers, a deposit on orders over $25,000, Net 30 for everyone else, payment on fulfillment for first orders. Rules evaluate top down and the first match wins, so a big order from a trusted buyer hits the ceiling rule while a routine reorder falls through to their normal term. It runs at checkout on every B2B order and leaves your direct-to-consumer checkout untouched.

You can test each rule against a sample order in a simulator before publishing, so you catch the boundary cases, like a buyer landing exactly on your order-count threshold, before a real checkout does. Every publish is versioned with one-click rollback if a policy turns out too generous, and there is an audit trail of what changed and who changed it. The point is not the tool. It is that Net 30 vs Net 60 stops being a per-deal argument and becomes a written policy that enforces itself.

Quick reference

Frequently Asked Questions

Summary

Net 30 collects your cash twice as fast. Net 60 wins and keeps large or enterprise accounts that expect it. The mistake is treating it as one choice for the whole book of business.

Decide it deliberately: Net 30 as the default, Net 60 earned by size, tier, or proven history, with a deposit ceiling on oversized orders and an automatic downgrade for slow payers. Then write it as rules that apply themselves at checkout instead of settings someone has to remember to change. That is the setup TermStack gives you on Shopify Plus, with a simulator to test each boundary and version history to roll back if a policy runs too loose.