NET30/60/90 cash flow impact and supplier negotiation value.
Inputs
your borrowing rate or cash opportunity cost
Cash flow value
Annual savings vs COD—
Avg working capital freed
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Annual capital cost saved
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Early-pay discount yield
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Comparison
Terms
Avg WC freed
Annual savings vs COD
About this calculator
Vendor payment terms are one of the most underrated levers in ecommerce cash flow management. While operators obsess over ad efficiency, founders with NET60-NET90 terms have meaningfully better cash positions than competitors with COD or 50/50 deposit structures — sometimes the difference between needing inventory financing and not.
This calculator computes the cash flow value of payment terms: average days delayed × annual purchases ÷ 365 = average working capital freed. Multiply by cost of capital to compute annual savings versus cash-on-delivery. The model also handles early-payment discount math: if the supplier offers 2% off for paying 20 days early, that\'s an effective 36%+ APR yield versus holding cash.
The strategic action: most operators significantly under-negotiate payment terms. Suppliers granting NET30 after 6 months of clean payment history is normal; NET60 after 12 months and $250K+ annual volume is achievable. Push for terms by year 2 of any supplier relationship. Combine improved terms with disciplined payment (don\'t damage the relationship) to compound cash flow benefit over time.
Pair with the Cash Flow Runway calculator (validates payment-term value against runway), Inventory Cash Tied Up calculator (broader working capital picture), and MOQ vs Cash Flow calculator (the inventory-side companion). Most successful operators treat supplier payment terms as a Q1 negotiation priority each year — improvements in terms compound exactly the same way improvements in margin do.
Frequently asked questions
What are NET30/60/90 terms?
How long after delivery you pay the supplier. NET30 = pay 30 days after invoice. NET60 = 60 days. NET90 = 90 days. The standard for new suppliers is COD (cash on delivery) or 50% deposit + 50% on delivery. Better terms come with track record.
How much are NET terms worth?
Massive for cash flow. NET60 effectively gives you 60 days of free working capital. On $500K of inventory purchases, that's $500K of cash you don't need to fund. At 8% cost of capital (typical for ecommerce), NET60 saves $6,500/month or $80K/year on supplier costs of that scale.
How do I get better payment terms?
Track record + volume. Most suppliers offer NET30 after 6-12 months of clean payment history. NET60-NET90 typically requires $250K+/year purchase volume and 12+ months track record. Trade references from other US clients accelerate it. Some suppliers will offer terms in exchange for guaranteed annual minimums.
What's "early payment discount"?
Some suppliers offer 1-2% discount for paying early (e.g., NET30 with 2% off if paid in 10 days). At ecommerce cost of capital (~8%), 2% for 20 days early is roughly equivalent to a 36% APR yield — almost always worth taking if you have the cash.
Should I push for NET90 even if I don't need it?
Yes if available. Cash flexibility is always valuable. But don't damage the relationship — suppliers granting NET90 are extending you trust, and demanding payment delays beyond what you need can flag you as a credit risk. Take the terms; pay on or near schedule unless cash actually requires the delay.