Net 30, Net 60 and Net 90 Payment Terms Explained for Wholesale Buyers and Sellers

Net 60 payment terms mean the buyer receives the goods or invoice now and has 60 calendar days from the invoice date to pay in full. Net 30 gives 30 days, and Net 90 gives 90. These terms are a form of trade credit: the seller finances the buyer for a period, usually without charging interest if payment arrives on time. This guide explains how net terms work, how a buyer qualifies, what risks sellers face, how early-payment discounts such as 2/10 net 30 are calculated, and how traders in Africa can use these ideas carefully.

What net 30, net 60 and net 90 mean

In short, net 30 net 60 net 90 are three common supplier credit terms, and they differ only in how long the buyer has to pay.

The number after "net" is the number of days allowed for payment. The clock normally starts on the invoice date, not the delivery date, unless the contract says otherwise. That small detail matters. If an invoice is dated on the 1st but goods arrive on the 20th, a buyer on Net 30 has only ten days left after delivery.

Net 30: full payment due 30 days after the invoice date.
Net 60: full payment due 60 days after the invoice date.
Net 90: full payment due 90 days after the invoice date.
EOM terms: some contracts count from the end of the month, such as "Net 30 EOM." Check the wording.

Terms like these appear on the invoice and in the supply agreement. They are agreed between buyer and seller, so they are not a legal right. A supplier can offer net terms to one customer and require cash from another.

Why sellers offer net terms

Suppliers in many markets use credit to win and keep customers. A buyer who can pay in 60 days may order more, or may switch from a competitor who demands payment up front. For the seller, the cost is waiting for cash. A seller who offers Net 60 must be able to fund production, wages and transport for two months before the money arrives, or use financing against its invoices. Some sellers do this through factoring, where a finance company advances money against the invoice for a fee.

Wholesale vendors that sell to retailers often have standard credit policies. If you are searching for net 60 wholesale vendors, remember that most suppliers extend longer terms only after a trading history. New customers are frequently asked to start with prepayment or cash, then move to Net 30 and, later, longer terms.

How a buyer qualifies for trade credit for retailers

Suppliers ask one question: will this buyer pay on time? To answer it they usually look at:

Business registration and identity, including a registered address and proper documents.
Trading history: how long you have operated and with whom.
Trade references: other suppliers who can say you pay as agreed.
Bank details and statements, showing regular cash flow.
Order size and pattern: steady repeat orders look safer than a single huge first order.
Your payment record with them, which is the strongest evidence of all.

If you are a small retailer, our guide on how small retailers can get supplier credit explains how to build that record step by step.

A worked example (illustrative)

Numbers below are round and for illustration only. They are not real prices.

A retailer buys goods worth 1,000,000 in local currency from a wholesaler on Net 60. The invoice is dated 1 March. The retailer receives the goods on 5 March, sells most of them by the end of April, and pays on 30 April. The wholesaler waited 60 days. If the wholesaler pays its own supplier on Net 30, it has to fund a 30-day gap from its own cash. If the retailer pays late, say on 30 May, the wholesaler waits 90 days for money it expected in 60 days, and its own plans suffer.

Now compare with an early payment discount 2/10 net 30 offer. The terms read "2/10 net 30," which means a 2 percent discount if paid within 10 days, otherwise the full amount in 30 days. On a 1,000,000 invoice, paying within 10 days saves 20,000 and the buyer pays 980,000. Paying on day 30 costs the full 1,000,000. The buyer pays 20,000 more to keep the money for 20 extra days. Over a year, that is a costly form of credit if you could have paid early, so many well-run buyers take the discount when cash allows. The same logic applies to 2/10 net 60, where the discount is available for 10 days and the full amount is due at day 60.

Risks sellers should manage

Late payment. Cash arrives later than planned, and the seller may have borrowed in the meantime.
Non-payment. Some invoices are never paid. Recovery can be slow and expensive.
Concentration. A big share of sales to one buyer on long terms creates dependence.
Disputes. Quality complaints, wrong quantities or missing paperwork give buyers reasons to delay.
Currency movement. If the invoice is in another currency and the local currency weakens, either side can gain or lose.

How to protect cash flow when you offer terms

Set credit limits per customer and review them regularly.
Start small. Offer a modest limit to new buyers and raise it as they pay on time.
Write the terms down: due date rule, late fees if the law allows, and dispute process. Have both sides sign.
Invoice promptly and accurately, with purchase order numbers and delivery proof.
Send reminders before the due date, not only after it.
Offer an early-payment discount if it suits your margin.
Consider a deposit on large or custom orders.
Keep a plan for financing, such as a credit line or invoice finance. Read about trade finance for African manufacturers and SMEs if you need working capital.

Also check the law and tax treatment in your country. Rules on interest, late fees and enforcement differ, and this guide does not replace advice from an accountant or lawyer.

Net terms for African traders and cross-border deals

Credit terms are common in domestic wholesale across Africa, often informally and based on personal trust. In cross-border trade, suppliers tend to be more cautious because distance, currency and legal enforcement make collections harder. Many exporters ask for a deposit before production and the balance before shipment or against shipping documents. Some offer open-account terms only to long-standing buyers.

If you export, read how African exporters get paid by foreign buyers. If you import from Chinese suppliers, payment terms for African buyers and Chinese suppliers explains typical arrangements. Shipping time also affects your cash cycle, so pair this guide with our freight to Africa guide. If goods take weeks to arrive and then clear customs, a "Net 60 from invoice date" term can leave you with little selling time.

Questions to ask before you accept net terms

When does the clock start: invoice date, shipment date or delivery date?
What happens if I pay late: fees, a lower credit limit, or a return to prepayment?
Is there an early-payment discount?
Who handles disputes, and how are they raised?
Can the supplier change the terms, and how much notice will it give?

Frequently asked questions

What does net 60 mean on an invoice? It means payment is due in full within 60 days of the invoice date.

Is net 60 better than net 30 for buyers? It gives buyers more time to sell goods before paying, which helps cash flow. But it depends on the seller agreeing, and sellers usually offer longer terms to proven customers.

What does 2/10 net 30 mean? A 2 percent discount applies if you pay within 10 days. Otherwise the full amount is due within 30 days.

Can a new business get net 60? It is possible, but many suppliers start new buyers on prepayment or shorter terms. Building a payment record usually opens the door to longer terms.

Do net terms charge interest? Often there is no interest if you pay on time, but vendors may charge fees or interest on late payments according to their credit terms. Read your agreement.

What if a buyer does not pay? Follow the dispute and collection steps in your contract, keep proof of delivery, and seek local legal advice. Prevention through credit checks and limits works better than recovery.

Getting started

If you buy for resale, ask suppliers what terms they offer to new customers and what they need from you. If you sell, decide your credit policy before the first request arrives. You can browse products from sellers on Comilmart or create an account to start conversations with suppliers. Comilmart connects buyers with verified sellers across Africa, and there are no listing fees to get started. Payment terms are agreed between buyer and seller, so confirm them in writing before you order.