Prepayment or Net 30: How Payment Terms Are Earned in Wholesale

14 June 2026 · The Glow Trade

A new retailer's first wholesale order comes with a pro forma invoice and a simple instruction: payment before dispatch. Her second supplier does the same. By the fourth she is asking the question every new buyer asks: when does anyone start trusting me? The answer is measurable, boring and faster than most expect: after six to twelve months of orders that arrive and invoices that get paid without a reminder, net terms stop being a favour and start being a routine offer.

Payment terms are not a courtesy; they are the wholesaler lending you money against your track record. Prepayment is the default because at the start there is no track record, and the path out of it is paved with exactly the behaviours that make you cheap to lend to.

The short version

Prepayment on the first orders is the wholesale default, not a distrust signal: the supplier finances the goods until your payment clears, and with no history that risk is unpriced.
Net terms, fourteen or thirty days, are typically earned after six to twelve months of clean orders, and the EU's late payment directive sets 30 days as the default horizon for B2B anyway.
The payment method is a margin line: SEPA transfers cost cents, cards cost percent, and the difference on a year of wholesale purchases is a real number.

Why prepayment is the opening position

Run the risk from their chair: a new account orders two thousand euros of stock, the warehouse picks and ships it, and the supplier now waits for money from a business they cannot evaluate. Default risk, dispute risk, and the plain financing cost of the gap all sit with them, so the opening terms are prepayment against the pro forma, which prices the risk at zero. It is not personal, and reading it as distrust wastes the energy the relationship needs.

What shortens the prepayment phase is everything that makes you legible: a verifiable company with a proper registration, a VAT ID that validates, a delivery address that is a business, and communication that answers in hours rather than days. The vetting is mutual in a good relationship, and the supplier checklist is what you run while they run theirs.

The ladder to terms

The typical progression looks like this: prepayment for the first orders, then small courtesies, ship-on-Friday-if-paid-Monday, then net seven or fourteen as a trial, then net thirty as a standing term once the trial invoices clear on time. Some suppliers formalise it with a credit application and trade references; most just let the account history argue for itself, which is why the payment record is the strongest document you own.

Two behaviours accelerate the ladder and one kills it. Accelerators: paying early when you can, because their system logs it, and keeping claims clean and documented, because a customer whose disputes are always photographed and inside the window is a customer you can lend to. Killer: the first late payment, especially with silence around it, because it rewrites the risk price on the whole relationship. If a tight month comes, the email before the due date preserves terms that the missed deadline would destroy, and the directive's 30-day B2B default is the frame everyone is working inside anyway.

The method is a margin line

SEPA transfer: cents, sometimes free, and the wholesale standard. Card: one to two percent in fees that someone pays, and if the supplier absorbs it, it is priced into your terms anyway. PayPal and similar: convenient, fee-heavy, and often capped for B2B amounts. On a year of wholesale purchases, the method choice alone is worth more than many negotiated discounts, which is why the terms conversation and the payment-method conversation are the same conversation, and the negotiating guide puts both on the annual ask.

PO discipline belongs here too: order numbers on every purchase, matched to invoices, matched to deliveries, because the day you have net terms, the paper trail is what keeps them, and the receiving checklist from the sample order guide is what keeps the trail clean.

Questions buyers ask

Should I ever pay for terms, like a deposit or a fee?

A deposit against a first large order is a legitimate middle step: part prepayment, part on delivery, and it lets both sides size the risk while the history builds. Recurring fees for the privilege of terms are rarer and worth refusing in most cases, because the market supplies terms free to good accounts. The borderline case is the factoring-style arrangement some wholesalers use, insured receivables or third-party credit checks, and that is normal B2B plumbing: your payment behaviour is still the price.

What happens to my terms if I pay late once?

Depends entirely on the silence around it. A late payment with a warning email beforehand, a reason, and a date usually costs nothing but the fee or interest the invoice names; the same payment late in silence costs the terms themselves, because what the supplier prices is predictability, and silence reads as the first missed payment of many. The repair is immediate, honest and followed by a stretch of early payments, which their system logs as loudly as the late one.

Do marketplaces like Ankorstore or Faire change the terms game?

They change the opening position: the platforms extend their own payment terms to buyers, sometimes net sixty on early orders, because the platform finances the trade and prices the risk across thousands of accounts. That is genuinely useful for a new shop's cash flow, with the trade-offs in assortment depth and pricing that the marketplace comparison lays out. The terms you earn there are the platform's, though, and they do not transfer to your direct supplier relationships, which still start at prepayment and climb the same ladder.