Why Buyers Should Have Access to Net Terms and What Distributors Gain From It
In B2B distribution, payment terms have quietly become one of the most influential, and most underestimated, drivers of buyer behavior.
Today’s buyers expect fast, flexible payment options as a baseline. Yet many distributors still limit net terms to a narrow subset of customers, relying on slow, manual credit processes that were built for a very different era. The result is friction that doesn’t just inconvenience buyers, it actively suppresses revenue, elongates sales cycles and pushes high-potential customers elsewhere.
Recent research from the B2B eCommerce Association underscores just how central payment flexibility has become. In its 2024 buyer demand study, more than 80% of B2B buyers said payment terms influence which supplier they choose, and 83% reported they would abandon a purchase altogether if net terms weren’t available at checkout.
That data points to a larger shift underway: payment terms are no longer a back-office detail. They are a frontline differentiator.
Net Terms as a Competitive Advantage
Historically, distributors competed on price, availability, and service. Those factors still matter, but they are no longer sufficient on their own. Buyers increasingly evaluate suppliers based on how easy they are to do business with, and payment experience is now central to that evaluation.
Studies from Digital Commerce 360 show that the majority of business buyers actively prefer suppliers that offer flexible payment schedules, particularly invoice-based and net terms, over those that require upfront payment or credit cards.
When net terms are accessible, not buried behind weeks of underwriting, distributors see clear downstream effects. Buyers convert more reliably, reorder faster, and place larger orders. This isn’t because they suddenly want to spend recklessly, but because flexible terms allow them to align purchasing with their own cash-flow cycles. Payment flexibility expands purchasing power at the moment it matters most: when a buyer is ready to buy.
The Real Problem With Traditional Net Terms
The issue isn’t that distributors don’t offer net terms. It’s how those terms are granted.
Traditional credit workflows were designed to minimize risk, but in practice, they often exclude exactly the buyers distributors should want to grow with, smaller businesses, newer companies, and fast-growing customers whose financial profiles don’t fit neatly into legacy models. Manual reviews, long applications, and delayed approvals slow momentum at the worst possible point in the sales cycle.
Buyers feel that delay immediately. Research consistently shows that when approvals stall, buyers don’t wait patiently; they look for alternatives. The friction doesn’t always show up as an explicit complaint; instead, it appears quietly as abandoned carts, smaller first orders, or business that simply never materializes.
This is the dynamic explored more deeply in BackdPayments’ forthcoming research with MDM: distributors are quietly losing revenue not because their products or pricing fall short, but because their credit processes create unnecessary barriers at checkout.
What Distributors Lose When Access Is Limited
When net terms are hard to access, the cost compounds over time, often in ways that aren’t immediately visible on a balance sheet.
Buyers who encounter friction at checkout don’t always abandon the relationship outright, but they do change their behavior. Orders get delayed, first purchases are smaller, and urgency disappears when payment approval becomes a hurdle rather than an enabler. This pattern shows up just as clearly in offline channels, phone orders, counter sales, and field transactions, where buyers expect immediate answers and the ability to move forward without administrative delays.
Over time, those small points of friction translate into lower customer lifetime value. Research from Allianz Trade shows that payment flexibility is directly linked to repeat purchasing and supplier loyalty, particularly among SMB buyers managing tight and unpredictable cash flow. When buyers feel constrained by limited or delayed terms, they consolidate spend with suppliers who make purchasing easier, even if pricing or product selection is otherwise comparable.
The impact isn’t limited to the buyer experience. Distributors also absorb operational strain as manual credit reviews, collections, and unpredictable payment timing consume internal resources. Finance teams spend more time managing exceptions and follow-ups, cash flow becomes harder to forecast, and growth planning becomes more reactive than strategic.
Making Net Terms Accessible, Without Adding Risk
For many distributors, the hesitation to expand net terms comes down to risk. But modern data and underwriting models have changed that equation.
Today, it’s possible to extend net terms to a much broader range of buyers while still maintaining disciplined risk controls. Real-time decisioning, alternative data, and automated workflows allow distributors to approve buyers instantly, including first-time customers, without taking on additional exposure.
The impact is felt across the customer base. New buyers gain immediate purchasing power. Growing customers increase order volumes without hitting artificial credit ceilings. And the buying experience becomes smoother and more predictable, which reinforces loyalty over time.
Importantly, accessibility doesn’t require ripping out existing systems or overhauling ERPs. Modern solutions operate alongside current workflows, removing friction without introducing complexity.
What Modern Net Terms Look Like in Practice
In practice, accessible net terms are simple from the buyer’s perspective. Approval happens instantly. Terms are clearly presented. Buyers choose the option that fits their needs, whether Net 30, 60 or 90, and complete their purchase without interruption.
For distributors, the experience is just as streamlined. Payment arrives upfront, cash flow improves and the burden of collections and credit management disappears. Buyers centralize more of their spend with the suppliers who enable this flexibility, strengthening long-term relationships.
This is what buyers now expect, not as a premium feature, but as part of a modern purchasing experience.
The Future of Distribution Will Be Defined by Payment Experience
As buyer expectations continue to evolve, payment experience will increasingly separate leaders from laggards in distribution.
The distributors who grow fastest over the next decade won’t just be those with the best pricing or deepest inventory. They’ll be the ones who remove friction from every step of the transaction, especially at checkout. Accessible, embedded net terms will become standard, and distributors who adopt them early will gain a meaningful advantage.
BackdPayments represents this modern approach to net terms: instant approvals, flexible payment options, and zero credit risk for distributors. By modernizing how buyers access terms, distributors can unlock growth without adding internal strain.
The question facing distributors today is no longer whether net terms matter.
It’s whether your approach to them is helping you win, or quietly holding you back.
