What is a credit period in wholesale textile trade? How does it work?

A credit period (also called "udhar" or trade credit) is an arrangement where a supplier allows a trusted buyer to receive goods now and pay after an agreed number of days — without upfront payment.

How credit works in Surat textile wholesale:

• New buyers: Almost never receive credit — payment upfront or at delivery is required until a relationship is established
• Regular buyers (3–6 months of consistent ordering): May receive 7–15 day credit on smaller orders
• Established long-term buyers: 15–30 day credit terms are common — sometimes up to 45 days for very large reliable buyers

Why credit matters:

• Allows buyers to sell goods and collect payment before paying the supplier — improving cash flow
• Enables larger order quantities without full upfront capital