Net terms for homewares and gift wholesale
Gift shops order in a rush before Christmas and pay in January, if they can. Terms Due keeps the season from turning into a bad debt.
Who your buyers are
Independent gift shops, homeware boutiques, garden centres, farm shops and museum shops. Owner-run, seasonal, and ordering from several dozen suppliers who all want paying in the same month. Most are careful and loyal; the ones that fail tend to fail in February, owing everyone.
Trade shows and wholesale marketplaces bring in new stockists in batches, which is exactly when checks get skipped. A credit application and a low first limit cost nothing and sort the good from the hopeful.
What goes wrong
- Big autumn orders on Net 30 from shops that pay in the new year.
- New stockists from the show with no references and no limit.
- Dozens of small balances that nobody tracks individually.
- Reorders in December from shops that have not paid for October.
- Chasing in January when every supplier is chasing.
Before and after
Before
- Show orders shipped on terms to anyone with a shop.
- Autumn invoices chased by hand in January.
- December reorders shipped to shops that owe for autumn.
- February's failures discovered when the cheques do not come.
With Terms Due
- New stockists on a low limit until the first invoice is paid.
- Heads-up before the due date, text on the day, every invoice.
- December reorders held until autumn is paid.
- Aging report shows who to call before the new year.
Suggested starting settings
| Setting | Suggested | Why |
|---|---|---|
| Terms | Net 30; pro forma for show orders from new shops | Earn terms before the season |
| Default limit | $500 to $1,500 | One to two orders for a typical independent |
| Seasonal limits | Raise in September, lower in January | Match the ordering pattern |
| Grace period | 14 days | One payment run |
| Reminders | Email at -5, 0; text at 0, 7, 14 | Owners are on the shop floor |
| Collection | On for established shops | January payment with nobody chasing |
Worked example
The Christmas reorder
A candle brand ships a $1,900 autumn order to a gift shop on Net 30, due 12 November. It is not paid. On 3 December the shop places a $1,400 reorder for Christmas. Checkout stops: 21 days overdue, pay link. The owner pays the autumn invoice from her phone and the reorder ships the same day. In February, when three of the brand's stockists close, this shop is not one of them, and the brand is owed nothing by the ones that are, because December's reorders to late accounts never shipped.
| Autumn order | $1,900, 21 days overdue |
|---|---|
| Christmas reorder | $1,400 |
| Shipped to late accounts in December | $0 |
| Lost to February closures | $0 |
Questions
We sell through a wholesale marketplace too. Does Terms Due cover those orders?
Only orders placed through your Shopify store. Marketplace orders are usually paid by the marketplace on its own terms.
Can I set pro forma for show orders and terms for reorders?
Yes. Start a new company on pay-upfront and switch its location to Net 30 after the first order is paid.
What about garden centres with head offices?
Create the head office as the company and each centre as a location if they pay centrally. Statements and reminders can go to head office accounts.
Related
Wholesale brands
For DTC brands selling wholesale to independent shops on Shopify: credit limits, holds and automatic collection on Net 30 trade accounts.
Read moreCredit application checklist
What to put on a wholesale credit application form, how to check the answers, red flags to watch for and how to set the first limit, with a checklist.
Read moreCredit holds
Put Shopify B2B companies on credit hold automatically when an invoice is overdue or they pass their limit. New orders are blocked at checkout until they pay.
Read moreStop chasing wholesale invoices by hand
Install Terms Due, set a credit limit for each buyer and let the app hold, remind and collect.
Install on Shopify