Posted in Marketing and Strategy Terms, Total Reads: 1238
Definition: Selling Terms
It is the length of time seller allows a buyer to pay for the goods or services sold on credit. When the sales representatives of distributors sell the products to the retailer or the company sells to the distributor, the customer need not pay the bill amount immediately. Generally they are given some time before which they have to pay back. They are given I month or 30 days mostly. This is the cycle time the customers take to pay back the bill money.
When the selling terms become longer, the cash cycle increases which results in instability of the cash for the seller. The seller then puts fine or takes some other action to rectify it.
The term can also mean the terms and conditions in the contract of sales between the purchasers and the firm selling the product. The contract generally has the cash cycle, the terms for the credit, quantity, price, margin, competitors, the distributor’s stock from other companies etc.