Net 30, net 45, net 60, the specific number gets negotiated constantly in cannabis wholesale, but the number itself usually isn't what actually protects or erodes your margin. Visibility is.
What Net Terms Actually Cost You
Every day of net terms you extend is a day your own cash isn't available to reinvest, pay your own vendors, or cover payroll. That's not a hidden cost, it's just one that's easy to underweight when you're focused on winning the account.
The Math Most Suppliers Skip
If you're extending net 45 to a retailer while paying your own suppliers on net 15, you're financing a 30-day gap out of your own working capital, for every order, on every account with those terms. That gap is invisible on a single invoice and very visible once it's multiplied across your whole book of business.
Where Margin Actually Gets Lost
It's rarely the agreed-upon terms themselves that cause the damage. It's what happens when those terms quietly slip.
The Slow Slide Past Due
An account that's consistently a week or two past net terms doesn't usually get flagged the same way an account that's outright non-paying would. That slow slide is where margin actually erodes, a little at a time, across dozens of accounts, without ever triggering the kind of attention a hard default would.
Inconsistent Terms Across Similar Accounts
If your team is negotiating terms account by account with no consistent record of what's been offered to whom, you end up with wildly different exposure across your book without a clear picture of your total risk at any given moment.
What Actually Protects Margin
The suppliers managing this well aren't necessarily the ones with the toughest terms. They're the ones who can see clearly, at any moment, who owes what and how that compares to what was agreed.
Set Terms Deliberately, Not Case by Case Under Pressure
Decide your standard terms in advance, and treat exceptions as exceptions that get tracked, not as the default negotiating posture for every account. For distributors managing multiple brands, this can even be set at the menu level, so different brands can maintain different default terms with the same customer without one blanket policy forcing a compromise that doesn't fit either brand.
See Your Exposure Clearly Across Accounts
Knowing your total outstanding balance across every account, and which ones are trending past terms, is the actual early warning system for margin risk. Without that visibility, you find out about a problem account only when it's already a bigger problem than it needed to be.
Where This Connects to Your Ordering Process
Payment terms don't exist in isolation from how orders get placed. The same connected system that gives you live inventory visibility is the natural place to also track who's ordering under what terms.
A Realistic Expectation on Payment Automation
Automated payment processing isn't universally live across cannabis wholesale software yet, and it's worth asking any vendor directly about the current state of their payment capabilities rather than assuming. What matters in the meantime is having clean, visible records of terms and balances by account, whatever the underlying payment mechanism looks like.
A Realistic Next Step
Pull a list of your accounts sorted by how far past their agreed terms they currently sit. If that list surprises you, that's the actual margin leak worth addressing before negotiating a single new deal.
How to Have This Conversation With a Retail Buyer
Tightening terms or asking for more consistency doesn't have to feel adversarial if you frame it around mutual predictability rather than distrust.
Frame It as Consistency, Not Suspicion
"We're standardizing terms across our accounts so we can plan our own cash flow better" lands very differently than singling out one account for stricter treatment. Most buyers respect a supplier who runs a tight, professional operation.
Bring Data, Not Just a Request
If you're asking an account to move closer to standard terms, showing them their own payment history alongside the ask is more persuasive than a general policy change with no specifics behind it.
Want to talk through how to get clearer visibility into your accounts? Talk to Distru.
