Wholesale Terms for Beginners -Part 3

Just like with any industry, the world of wholesale has their own terms. Take the time to learn these wholesale terms before you ask the supplier for the definition! This will make you look more professional in the eyes of your wholesale supplier and have a better working relationship.

Wholesale terms like .. MAP, NET 30, FOB, MOQ, QOH..etc what do all of these things mean?

Wholesale Terms Net 30, Net 60 – Means You’ve Got Time To Pay

Net 30 is credit terms. So if a wholesale supplier writes Net 30 on your invoice, that means you have 30 days to pay them. The advantage to this is that you can sell some of the products before you have to pay for them. Wholesalers base approval of Net 30 accounts on your business history. So don’t expect to be approved for a Net 30 account if you are a beginner and just getting started.

NOTE: If you are a beginner, start by paying the suppliers up front with a credit card for every wholesale product purchase. Once you build a good purchase history with your supplier, then you can apply for a Net 30 account with them for better approval odds. This will help you establish a credit history and will allow you to setup accounts with wholesalers who only have Net Terms available and want to check your business history.

FOB is an acronym for Free On Board or Freight on Board

FOB is a shipping term, so you will find that in the shipping section of your dealer price list. It means “Free on Board” or “Freight on Board” (unofficial). Free on board tells who is liable for goods that are damaged or destroyed during shipping. When used together with a location, that location designation determines who has responsibility for the payment of the freight charges and at what point ownership for the shipment passes from the wholesaler to the retailer.

NOTE: That means whatever city is listed as the FOB, the wholesaler will pay the cost of the shipping to that location. So if it says FOB Atlanta, GA, this means the wholesaler pays the costs to get the shipment to Atlanta. From that point onwards you must either pick up the shipment yourself, or have it forwarded at your own cost. Typically, the FOB will be the same city where the supplier is located. In that case, you’ll just always pay the standard shipping cost to get the shipment from their warehouse to you. 

RA or RMA means “Return Authorization” or “Return Merchandise Authorization”.

It means the exact same thing and never something anyone wants to do. But if you need to return a shipment of goods in some cases you need an RA before you send them back. Most wholesale suppliers have a strict process you must use to return any item. When wanting to return an item, you must contact your wholesale supplier to obtain an RA Number. You must clearly mark the RA number on the outside of the return package. Once the wholesale supplier receives the product, they will match the RA number with the invoice and pass you a credit.

NOTE: The process is similar with wholesale drop shippers. Your customers must contact you to request a replacement or to return the product. You then contact your wholesale supplier to request an RA and submit a replacement or refund for the order. In some cases, the drop shipper will ship the replacement product or refund even before they receive the returned product. This saves the customer having to wait too long.

We here at WorldwideBrands.com have been communicating with wholesalers and retailers for over 20 years! We KNOW what these terms mean and ask our listed suppliers some of this information when researching them for a listing in our B2B Directory of Certified Wholesalers. Asking about MAP policies and what their SKU counts are, helps us to understand how big their business is, and what they require from their dealers.

This was PART 3 of Wholesale Terms for Beginners.
To read PART 1, GO HERE.
To read PART 2 : GO HERE.