Net 30 Payment Terms
Payment terms where the full invoice amount is due 30 days after the goods are shipped or received. A sign of strong buyer-supplier trust and beneficial for the buyer's cash flow.
Net 30 (also written as "Net-30" or "N30") means the buyer has 30 days from the invoice date (or shipment date, depending on the agreement) to pay the full invoice amount. This is a significant benefit for the buyer's cash flow: you receive the goods, can start selling them, and potentially collect revenue before you need to pay the supplier. In contrast, standard T/T terms require payment (or at least the balance) before shipment.
Net 30 terms are a privilege earned through a track record of reliable payment and consistent order volume. Most overseas factories will not offer Net 30 to new customers. Typical progression: first order is 50% deposit / 50% before shipment, subsequent orders shift to 30% deposit / 70% before shipment, after 6-12 months of regular orders the factory may offer 100% payment against B/L (pay upon shipment), and after 1-2 years of proven reliability, Net 30 or even Net 60 may be negotiated.
Net 30 dramatically improves your working capital cycle. If your products take 30 days to ship, 5 days to clear customs, and you sell through in 30 days, standard payment terms mean your capital is tied up for 65+ days before you see any return. With Net 30, your cash outflow is delayed by 30 days, potentially meaning you can sell products before paying for them. This is the ideal position for a growing DTC brand.
Why it matters
Start working toward Net 30 terms after 3-4 successful orders. Begin by asking to reduce the deposit percentage, then shift to payment against B/L, then propose Net 15, and finally Net 30. Each step builds trust.
Practical Tip
Start working toward Net 30 terms after 3-4 successful orders. Begin by asking to reduce the deposit percentage, then shift to payment against B/L, then propose Net 15, and finally Net 30. Each step builds trust.
You'll hear this when…
When arranging payment
“"The factory requires a Net 30 Payment Terms before they'll book production time on their line."”
When reviewing an invoice
“"Our accountant flagged the Net 30 Payment Terms terms on this supplier invoice — make sure they match the contract."”
When negotiating terms
“"We proposed net-30 but the supplier countered with Net 30 Payment Terms — standard for first-time buyers."”
Related Terms
Wire Transfer
T/TAn electronic bank-to-bank payment (also called Telegraphic Transfer or T/T) that is the most common payment method for international manufacturing orders. Typically structured as a deposit before production and balance before shipment.
Letter of Credit
L/CA financial instrument issued by a bank guaranteeing the seller will receive payment as long as the terms and conditions specified in the letter of credit are met. Provides security for both buyer and seller in international transactions.
Landed Cost
The total cost of a product delivered to your warehouse, including the product price, shipping, insurance, customs duties, customs broker fees, and drayage. The true cost you must use for pricing and margin calculations.
This term appears in every Bottlecap report.
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