Operations
Wholesale runs on a shared vocabulary, and brands that speak it fluently close accounts faster and avoid expensive misunderstandings. Net 30, MOQ, line sheet, case pack, EDI — these wholesale terms are not jargon for its own sake; each one encodes a real operational or financial commitment. This guide explains the wholesale terms that matter most when you sell to retailers, with practical guidance on setting each one for your business.
"Net 30" means the retailer's full payment is due 30 days after the invoice date — usually the ship or delivery date. Net 60 stretches that to two months. Payment terms are a form of credit you extend to retailers, and they are table stakes in many categories: independent retailers on Faire expect Net 60, and chain retailers often dictate Net 30 to Net 90 as a condition of doing business.
Before offering terms, answer two questions. Can your cash flow carry production plus 60 days of float? And how will you vet creditworthiness? New accounts should earn longer terms over time — many brands start accounts on prepay or credit card and graduate them to Net 30 after two clean orders. Whatever you choose, put terms on the invoice and enforce late fees consistently but politely.
Your MOQ is the smallest order you will accept, expressed in units or dollars. It exists to protect your margin: below a certain order size, picking, packing, and account management cost more than the order contributes. Common starting points are $150–$300 for opening orders from independent retailers, with lower reorder minimums to encourage frequent restocking.
Set your MOQ from your cost data, not from what competitors list. Calculate the fully-loaded cost to process an average order — labor, packaging, freight subsidy, payment fees — and set the floor where the order still clears your target margin. Publish the MOQ on your line sheet and hold it; an MOQ that bends on request is not a policy, it is an opening negotiating position.
A case pack is the number of units packed in a sellable inner case; the master carton is the outer shipping box containing multiple case packs. Retailers prefer ordering in case-pack multiples because it simplifies receiving and shelf stocking. You should prefer it too — broken cases mean repacking labor and damaged units. Design case packs around how retailers merchandise (six and twelve are common) and around your carton dimensions so freight costs stay predictable.
A line sheet is your wholesale catalog in its most functional form: one or two pages per category showing product photos, names, SKUs, wholesale and suggested retail prices, case packs, MOQs, and order contact details. Buyers skim line sheets in under a minute, so clarity beats cleverness. Put bestsellers first, keep pricing unambiguous, and include your terms and cutoff dates.
Update line sheets seasonally and version them clearly — a buyer working from last year's pricing is a margin leak and an awkward conversation. Digital line sheets shared as a link always reflect your current catalog; a PDF emailed eight months ago does not.
MSRP is the suggested retail price you recommend to retailers. MAP — minimum advertised price — is the lowest price a retailer may publicly advertise, and in the United States it must be a genuine policy applied unilaterally and consistently to be enforceable. A MAP policy protects your brand from a race to the bottom that would make your product unsellable for every other account. If you adopt MAP, enforce it uniformly; selective enforcement is both a legal risk and a channel-trust killer.
Once you sell to chains, three operational wholesale terms dominate. EDI (electronic data interchange) is the standardized system chains use to send purchase orders and receive invoices — documents like the 850 (PO) and 810 (invoice). Chargebacks are financial penalties retailers deduct for compliance failures: late shipments, wrong labels, missing documents. Fill rate is the percentage of ordered units you actually ship. Chain programs live and die on these metrics; a 95% fill rate sounds fine until the chargebacks arrive. Build the operational muscle before you sign the program, not after.
FOB (free on board) defines where ownership and freight responsibility transfer — FOB origin means the buyer pays freight from your dock. Lead time is the days between order and shipment; publish it and hit it. Cutoff dates for seasonal orders protect your production calendar. Retailers plan around these numbers, and reliability on the boring details is what turns a trial order into a permanent shelf position.
Beyond standard wholesale, three arrangements come up constantly and are worth understanding before you agree to them. Drop shipping means you fulfill the retailer's end-consumer orders directly — the retailer never touches inventory, and in exchange you accept lower margins and higher per-unit fulfillment costs. It works well for bulky or fragile goods and for retailers testing your line with zero risk.
Consignment means the retailer pays you only when the product sells. It shifts all inventory risk to you and is generally worth accepting only for strategic door-openers — a marquee account whose name sells your line to everyone else. If you do consignment, cap the term, define reporting, and audit sell-through monthly.
Finally, slotting fees — payments retailers charge for shelf placement — are standard in grocery and unusual elsewhere. Know before you pitch a chain whether your category expects slotting, because it changes the economics of the entire program. Each of these arrangements can be the right tool; the mistake is agreeing to one without pricing its risk.
One final principle ties all of these terms together: put everything in writing and enforce it evenly. A terms sheet that lives only in your head is a future dispute; a policy applied selectively is a precedent you will regret. The retailers worth keeping will respect clear, consistently applied terms — and the ones who push back on basic professionalism are usually the accounts that cost you more than they ever pay.
Net 30 means the buyer must pay the full invoice within 30 days of the invoice date. It is the most common payment term in wholesale, with Net 60 and Net 90 common at larger retailers. New accounts often start on prepay and graduate to terms after a track record.
Calculate the fully-loaded cost of processing your average order, then set the minimum where each order still clears your target margin. For most consumer brands selling to independents, that lands between $150 and $300 for opening orders.
Product photos, names and SKUs, wholesale and suggested retail prices, case packs, MOQs, payment terms, lead time, and how to order. One glance should tell a buyer exactly what it costs to stock you and how the economics work.
Only for chain retail. Independent retailers order through portals, marketplaces, or email. Chains require EDI for purchase orders and invoices, so treat EDI capability as a chain-readiness milestone rather than a day-one requirement.
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