Vendor Central payment terms are the number of days between Amazon receiving your goods and Amazon paying your invoice, and they are typically set at thirty, sixty or ninety days, with an early payment discount available if you want the money sooner. The terms are agreed in the annual vendor negotiation, not per purchase order, and they apply to every invoice until the next negotiation.
The important part for a brand coming from FBA is not the number of days. It is that the whole shape of your cash flow inverts. On Seller Central, Amazon collects the money from the customer and settles with you on a short, predictable cycle, with your inventory sitting in a warehouse you already paid for. On Vendor Central, you pay a factory, ship a pallet, and then wait most of a quarter to be paid for it.
How the terms are structured
Three elements make up the agreement, and they interact.
The net period. Net 30, Net 60 or Net 90, counted from a trigger event. That trigger is the thing to nail down. Some agreements count from the invoice date, some from receipt at the fulfillment centre, some from the later of the two. The gap between "we shipped it" and "they scanned it in" can be a week or more on a cross-country truck, so the same Net 60 can mean sixty days or seventy.
The early payment discount. A reduction you grant in exchange for being paid earlier than the net period. It reads like a standard trade discount, and it accrues on every invoice, which is why it behaves more like co-op than like a one-off financing decision.
The deduction timing. Allowances, chargebacks and funded promotions are netted against remittances, so the amount that arrives on day sixty is rarely the amount on the invoice. Planning cash against invoice face value is the single most common mistake in the first year.
None of this is unusual for wholesale. It is simply new if your only prior experience of being paid was a Seller Central settlement.
What an early payment discount actually costs
Sellers routinely accept a discount that is far more expensive than any loan they would sign for, because the number looks small.
Work it. Suppose the standard term is Net 60 and you are offered payment on day 30 in exchange for two percent. You are paying two percent to receive money thirty days early. Thirty days is roughly a twelfth of a year, so the annualised cost of that money is around twenty-four percent.
Put it in dollars. On a $40,000 invoice, two percent is $800 to get $40,000 thirty days sooner. If your alternative is a line of credit at a rate that would cost you perhaps $350 for the same thirty days on the same amount, the discount is the worse instrument by a factor of two.
That does not make it wrong. There are two situations where it is the right call. The first is when you have no credit facility at all and the alternative is not producing the next purchase order, in which case the comparison is not to a cheaper loan but to lost revenue. The second is when the discount buys operational simplicity you value — no covenants, no personal guarantee, no facility to renew.
But make the comparison explicitly, once, in dollars, and revisit it every year. A brand that sets up a modest working capital facility in year two and drops the early payment discount at the next negotiation has given itself a permanent margin improvement with no change to the product.
Modelling the gap between the factory and the payment
This is the calculation that decides whether the channel is survivable at the volume Amazon wants.
Take a $58 retail outdoor product. Vendor cost to Amazon is $29, landed cost of goods is $12.50. Amazon issues a purchase order for 1,200 units, so the invoice is $34,800 and your production cost is $15,000.
Now lay out the timeline. You pay the factory a deposit of $4,500 at order placement. Production takes five weeks. You pay the $10,500 balance against shipping documents. Ocean freight and customs take four weeks. The pallet is trucked to the fulfillment centre and received. Then Net 60 begins.
From deposit to payment is roughly five months. For that whole period, $15,000 of your money is out. And because Amazon reorders on its own forecast, the next purchase order usually lands before the first one is paid, so at steady state you are funding two or three cycles simultaneously. A brand doing $35,000 purchase orders every six weeks on Net 60 terms needs something in the region of $45,000 to $60,000 of permanent working capital just to stand still.
That is the number to put in front of yourself before agreeing to grow the account. Vendor Central growth consumes cash in direct proportion to how well it goes, which is the opposite of the FBA experience where a good month funds the next one.
How the terms compare to real wholesale
Once you have modelled the Amazon cycle, the rest of the wholesale world becomes readable, and some of it is better than you expect.
A large national chain is comparable or worse: Net 60 or Net 90 is standard, and the largest ones push further. A regional distributor typically runs Net 30, sometimes with a discount for payment in ten days, and pays reliably because your line is a small part of a routine accounts-payable run. Independent retailers are the interesting case — many pay by card on the order, which means the money arrives before you ship, and the ones on terms are usually Net 30.
That spread matters more than the headline discount. A distributor paying $24 on Net 30 delivers cash faster than Amazon paying $29 on Net 60 minus accruals, and over a year the faster cycle funds more inventory turns. The comparison that actually decides channel strategy is cash per dollar of working capital per year, not margin per unit.
The same logic runs the other direction when your own buyers ask you for terms. Amazon Business net terms covers how that works when the buyer is a business customer on the marketplace rather than a retailer, and the per-unit economics behind all of it sit in FBA fees versus wholesale margin.
What to negotiate beyond the number of days
Four things are worth more than shaving ten days off the net period.
The trigger date. Getting terms counted from invoice date rather than receipt can pull a week out of every cycle at no cost to Amazon.
A deduction dispute window. Agree how and by when you can challenge a chargeback. Without one, disputed deductions sit unresolved and quietly become permanent.
Purchase order lead time. A longer window between the purchase order and the ship-by date lets you produce against firm orders instead of against a forecast, which reduces the capital at risk far more than payment terms do. The order-size mechanics behind that are in Vendor Central order minimums.
Remittance detail. Ask for deduction codes on the remittance. Reconciliation is impossible without them, and reconciliation is where vendors recover money.
Notice that none of these are concessions Amazon loses much by granting. They are administrative, and vendor managers are usually more flexible on administration than on price. The accrual structure that sits alongside them is covered in Vendor Central co-op.
Building a channel that pays faster
There is a structural fix for a slow-paying channel, and it is not better terms. It is a second channel with a different cycle.
A brand selling only through Vendor Central has one accounts-payable department deciding when it gets paid. Every dollar of growth extends the float. A brand that also ships to two distributors on Net 30 and a group of independent retailers who pay on the order has a blended cycle that gets shorter as the smaller accounts grow, because those accounts pay before the pallet clears customs on the Amazon order.
That blend is what makes seasonal peaks survivable. It is also what makes the annual vendor negotiation less tense, because a vendor who can walk is negotiating and a vendor who cannot is accepting.
Finding out whether that blend is available to you is a short exercise rather than a project. Paste your listing into WholesalePilot and the preview shows the distributors and retailers that plausibly stock your category, which tells you whether a faster-paying channel exists before you commit to another year on Net 60.
Questions vendors ask about payment terms
Are the terms negotiable in the first agreement? Less than later ones. A new vendor has little leverage on terms specifically, which is why the first negotiation is usually better spent on the trigger date and the dispute window.
Does Amazon pay on time? Generally yes against the agreed schedule. What varies is the amount, because deductions are netted. Plan cash against a discounted expectation, not invoice face value.
Can you invoice before the goods are received? You can raise the invoice, but if the term is triggered by receipt, raising it early changes nothing. Find out which trigger applies before you build the cash model.
What happens if a purchase order is short-shipped? You invoice what you shipped, and a shortage usually generates a chargeback on top. Short-shipping is expensive twice, which is another reason to agree order minimums you can reliably fill.
Is an early payment discount the same as factoring? Functionally similar, structurally different. Both convert future receivables into cash at a cost. Price the discount as an annualised rate and compare it with every other source of capital you have before accepting it as permanent.