The 2026 retailer payment terms index: data for suppliers

The state of retailer payments in 2026

In 2026, the landscape has evolved from temporary delays to a permanent financial strategy where large buyers optimize their balance sheets by extending terms, effectively using vendor capital to subsidize their own operations. Maintaining sufficient liquidity and protecting profit margins is the primary goal for suppliers navigating this structural shift. Suppliers must now proactively manage these extended timelines to ensure business continuity and growth rather than viewing them as temporary anomalies.

Net 60 vs Net 90

Net 60 has become the baseline expectation for mid-tier retailers and is often the starting point for negotiations in 2026. For many  CPG brands  and manufacturers, a 60-day wait is uncomfortable but manageable with tight expense control and disciplined cash flow forecasting. It requires a robust buffer, but it rarely threatens the fundamental viability of a healthy business.

Net 90 and longer terms, however, represent a significant escalation in risk for suppliers. This timeframe is increasingly standard for big-box retailers and multinational conglomerates who hold significant leverage over their vendor base. Waiting a full quarter to realize revenue from shipped goods creates a massive disconnect between cash outflows for production—such as raw materials and labor—and cash inflows from sales. For most small to mid-sized businesses, operating on Net 90 terms without external financing is unsustainable and restricts the ability to reinvest in growth.

The persistence of payment delays

Suppliers analyzing a comprehensive retailer payment delays report will find that extended terms are no longer the exception but the rule for doing business with giants. The data from 2024 and 2025 indicates a clear trend line: as interest rates stabilized, retailers did not revert to faster payments. Instead, they locked in the extended terms implemented during volatile periods. This creates a "new normal" where suppliers must assume a minimum 60-day lag on receivables when modeling their annual budgets.

Benchmarking protects margins

Validating your terms against industry data is a critical defensive mechanism to ensure you are not accepting below-market conditions compared to competitors. Without access to aggregated data, a supplier might believe that Net 90 is the only option available, when in reality, peer companies may have successfully negotiated Net 60 or early payment discounts. Benchmarking ensures that you are not eroding your own margins simply because you lack visibility into the broader market standards.

Transparency creates leverage

Bridge aggregates this data to provide transparency, empowering suppliers to negotiate better terms or seek appropriate financing. When a business owner understands that their payment terms are an outlier compared to the industry average, they gain the confidence to push back during contract renewals. Furthermore, understanding the specific payment behaviors of different retailers allows suppliers to price their goods more accurately, baking the cost of capital into the wholesale price to protect their bottom line.

Major retailer payment benchmarks

Payment speeds vary drastically across the retail landscape, with Costco offering a distinct advantage over competitors like Target and Walmart who lean on extended terms. Understanding these specific variances is critical for suppliers deciding which accounts to prioritize and how to structure their financial planning for the year ahead.

Costco offers a cash flow advantage

Costco maintains faster payment terms than the industry average, with data such as  Costco’s UK payment practice report  recording an average time to pay of just 33 days, reflecting a broader corporate culture of efficient vendor payments often seen in their US Net 30 terms. This approach makes Costco a highly attractive partner for emerging brands and suppliers with limited working capital. The ability to turn inventory into cash in roughly one month allows suppliers to reinvest in production cycles up to three times faster than they could with other major retailers.

Target leans on extended terms

Target's vendor arrangements can permit payment dates up to 120 days from the invoice date according to industry reports, creating a significant working capital gap. While public  Target SEC filings  confirm the use of supply chain finance programs to manage payables, the practical reality for many vendors is a payment cycle that extends well beyond the traditional quarter. For a supplier, a four-month delay forces a heavy reliance on credit lines or cash reserves to keep operations running. This extended timeline often surprises new vendors who may anticipate standard commercial terms, only to find their capital locked up for a third of the fiscal year.

Walmart enforces strict compliance

Walmart enforces rigid terms that typically range from Net 60 to Net 90 depending on the department, often necessitating participation in supply chain finance programs or external  Walmart supplier financing  to bridge the gap. Known for its rigorous "On Time In Full" (OTIF) standards, the retailer combines strict delivery requirements with structured payment timelines. While reliable, the length of these terms often requires vendors to seek liquidity solutions to maintain the production pace required to stay on the shelf.

Retailer

Typical Payment Terms

Observed Average

Costco

Net 30

33 Days

Walmart

Net 60 - Net 90

Varies by Dept

Target

Net 60 - Net 120

Up to 120 Days

Industry Avg

Net 60

58 Days

The real cost of extended terms on your cash flow

Extended payment windows act as a hidden tax on suppliers, eroding real margins through inflation and forcing reliance on costly short-term debt. While the invoice amount remains the same, the value of that money decreases over time, and the cost to service the operations while waiting for payment increases.

Inflation erodes profit

A dollar received in 120 days has significantly less purchasing power than a dollar received today, meaning extended terms directly cut into real margins by 1-2% per quarter. In an environment where raw material costs and logistics expenses are fluctuating, locking in a price today but getting paid four months later exposes the supplier to currency risk and inflationary pressure. This "time value of money" calculation is often overlooked during contract negotiations but has a tangible impact on the supplier's net profitability at the end of the year.

Small firms bear the brunt

Smaller manufacturers lack the cash reserves to wait out long payment cycles, facing disproportionate challenges relative to their size compared to larger conglomerates. Analyzing recent supplier cash flow data alongside the  2024 Small Business Credit Survey  reveals that this disparity creates an uneven playing field where smaller innovative brands struggle to compete solely due to liquidity constraints. Large corporations may have access to cheap capital markets to bridge these gaps, but SMBs typically rely on more expensive forms of credit or their own savings.

Operational misalignment

The disconnect between bi-weekly payroll cycles and 90-day revenue cycles forces reliance on expensive short-term debt. Your employees, landlords, and utility providers expect to be paid immediately or monthly. When your revenue cycle extends to three or four months, a structural deficit emerges. To cover this gap, businesses often turn to high-interest credit cards or merchant cash advances out of desperation, which further erodes the margin intended to be profit.

Working capital gets trapped

Extended terms lock up capital in accounts receivable that could otherwise fund inventory or expansion, necessitating  working capital solutions  to unlock liquidity. Every dollar sitting in an unpaid invoice is a dollar that cannot be used to buy raw materials for the next order, hire a new sales rep, or upgrade machinery. This "trapped" capital stifles growth, forcing businesses to turn down new opportunities simply because their cash is held hostage by their customers' payment terms.

Reading the fine print: supplier finance disclosures

Recent regulatory changes now force public companies to reveal the "confirmed" debt they owe suppliers, giving you new leverage in contract negotiations. These disclosures provide a window into the buyer's financial strategy, revealing how heavily they lean on their supply chain to prop up their own free cash flow numbers.

FASB ASU 2022-04 exposes hidden debt

New accounting standards require buyers to disclose the terms of their supplier finance programs, revealing the true scale of their "confirmed" obligations to vendors. Previously, these obligations were often buried in general "accounts payable" lines on the balance sheet. Now, transparency rules mandate that public companies specify the nature of these obligations, providing suppliers with hard data on the buyer's reliance on extended terms and third-party financing arrangements.

Disclosures reveal reliance on supplier capital

Suppliers can identify if a retailer is over-leveraging vendor terms to boost free cash flow by analyzing the magnitude of confirmed obligations in their reports. By reviewing  Deloitte guidance on ASU 2022-04 , vendors can interpret these figures to spot structural dependencies. If a retailer reports a massive amount of "confirmed" obligations, it shifts the power dynamic; you know they need these terms, which might open the door for you to request price concessions or better placement in exchange for agreeing to them.

Knowledge drives negotiation

Citing these public filings during contract renewal demonstrates financial sophistication and can help push back against unreasonable term extensions. When a buyer claims that "Net 90 is standard for everyone," being able to point to data showing variability or the specific volume of their financed payables shows that you are paying attention. It signals that you treat your capital structure seriously and expect a partnership that respects your liquidity needs.

Trade-offs become clear

Understanding these programs helps you calculate whether the cost of a buyer's early payment discount is higher than the cost of third-party financing. Retailers often offer "early pay" programs where they take a 2% discount to pay in 10 days. However, if you can secure a line of credit or invoice financing at a lower effective rate, it makes more financial sense to reject the retailer's discount and finance the receivable yourself. Data-driven decision-making allows you to choose the cheapest cost of capital.

Strategies to bridge the payment gap

Suppliers can neutralize the impact of slow payments by utilizing specific financial tools that decouple cash flow from retailer payment schedules. You do not have to wait for the retailer to pay to keep your business moving forward.

• PO financing funds production immediately:  Purchase order financing  allows you to pay your own suppliers and fulfill large orders without waiting for the retailer's previous payment to clear. This is particularly vital for high-growth brands receiving their first major orders from chains like Walmart or Costco. The financing pays your manufacturers directly to produce the goods, ensuring that a lack of cash on hand never forces you to turn down a purchase order.

• Factoring converts receivables to cash: Invoice factoring turns 90-day invoices into immediate working capital, ensuring you can meet payroll and operational expenses. Once the goods are delivered and the invoice is generated, a factoring provider advances a significant portion of that invoice value within days. This bridges the gap between delivery and the retailer's payment date, converting a stagnant asset on your balance sheet into liquid cash.

• External financing preserves retailer relationships: Using third-party lenders keeps your financial strategy separate from your buyer relationship, avoiding the need to ask procurement for favors. By using external financing,  OpenCall  or other marketplace solutions, you maintain a facade of financial robustness. The retailer gets their Net 90 terms, and you get your cash immediately—a win-win that protects the commercial relationship.

• Agility is the goal: Proactive financing ensures that slow retailer payments do not stall your production cycles or delay expansion plans. In the fast-paced retail environment of 2026, the ability to pivot, launch new SKUs, or restock rapidly is a competitive advantage. Financing solutions act as an accelerator, ensuring that your speed of business is dictated by customer demand, not by the slow administrative processes of your accounts receivable department.

FAQs

Q: What are standard payment terms for major retailers in 2026?A: Net 60 to Net 90 days is the new standard for major big-box retailers, with Net 120 appearing as an outlier in specific categories. While some retailers like Costco pay faster, most major chains have standardized on these longer timelines.

Q: How can I negotiate better payment terms?A: Use data from this index and the retailer's own public disclosures to demonstrate that your requested terms align with industry norms or their reported averages. Highlighting your performance metrics and reliability can also provide leverage to request "status quo" terms rather than extensions.

Q: Does using supplier financing affect my relationship with the retailer?A: No. Most retailers are accustomed to suppliers using financing; third-party solutions are invisible to the buyer's procurement team. The retailer simply pays the invoice to a different account number or lockbox when it comes due.

Q: What is the difference between PO financing and factoring?A: PO financing pays for the goods before they are manufactured/shipped; factoring advances cash on the invoice after delivery. PO financing helps you make the product; factoring helps you get paid for it faster.

Q: How fast can I get funding for a Walmart or Target order?A: Bridge aims to provide multiple competitive loan offers within 48 hours to help you meet strict "On Time In Full" (OTIF) deadlines. Our technology streamlines the application process to get you answers quickly.

Ready to bridge the gap?

 Apply for financing today  to bridge your cash flow gaps and negotiate from a position of strength. Don't let extended payment terms dictate your growth trajectory.

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