Key Terms in Ecommerce and Retail

In this Ecommerce glossary, you’ll find straightforward definitions of key terms used in online selling and retail. Whether you’re a dropship retailer or just stepping into the vendor marketplace, knowing these Ecommerce definitions will enhance your understanding and effectiveness in the market.

Abandoned Cart

Abandoned carts refer to instances where customers add items to their online shopping cart but leave the website without completing the purchase.

Accessibility

Accessibility in ecommerce refers to the principles and practices that ensure websites and online platforms are usable by people of all abilities, including those with disabilities.

Address Verification System

An Address Verification System (AVS) is a technology used primarily in payment processing companies to verify the address of a credit card holder during a transaction.

Affiliate

A marketing arrangement where a business rewards affiliates for each customer brought in through the affiliate’s marketing efforts.

AliExpress

An online retail platform where consumers can purchase products directly from suppliers worldwide.

API (Application Programming Interface)

An API (Application Programming Interface) allows different software programs to communicate with each other. It lets one application request data or services from another, making it easier to connect different systems.

Automation

Automation means leveraging technology to execute tasks with minimal human involvement.

Automated Inventory Management

Automated Inventory Management is a system that tracks and manages stock levels automatically, minimizing manual data entry.

Automation Platform

An Automation Platform is software that integrates various business processes to streamline operations and reduce manual tasks.

Average Order Value (AOV)

Average Order Value (AOV) is a key performance metric in retail and ecommerce that measures the average amount of money each customer spends per transaction. It is calculated by dividing the total revenue by the number of orders during a specific period.

B2B (Business to Business)

B2B stands for Business to Business. It refers to transactions or services conducted between two businesses rather than between a business and individual consumers.

B2C (Business to Consumer)

B2C, or Business to Consumer, is a model where businesses sell products or services directly to individual consumers.

Backorder

A backorder is when a customer orders a product that is currently out of stock. The order will be fulfilled once the item is available again.

Backorder Management

Backorder Management is the process of handling orders for items that are temporarily out of stock, ensuring customers are informed and items are fulfilled when available.

Blog

A blog is a website or a section of a website where people share their thoughts, ideas, or information on various topics. It usually features regular updates or posts written in an informal style to engage readers.

Branding

Branding is a fundamental aspect of marketing and business strategy that focuses on creating a unique identity and image for a company or product in the minds of consumers.

Brick-and-Mortar

A brick-and-mortar business refers to a physical store or location where customers can browse and purchase products or services in person.

Bulk Import

Bulk import is the process of bringing in a large quantity of goods or data into a system at once. This method saves time and effort compared to importing items individually.

Bundle Pricing

Bundle pricing is a marketing strategy where multiple products are sold together at a single price, often at a discount compared to purchasing each item individually.

Bundling

Bundling is when a seller offers several products or services together as a package for a single price. This strategy can make customers feel like they are getting more value for their money.

Call to Action (CTA)

A Call to Action (CTA) is a prompt that tells people what to do next, like “Buy Now” or “Sign Up.” It’s meant to encourage immediate action from the audience.

Catalog Management

Catalog Management is the process of organizing and maintaining product information in a centralized database for easy access and updates.

Cash On Delivery (COD)

Cash on Delivery (COD) is a payment method commonly used in ecommerce transactions where the customer pays for their order at the time of delivery rather than in advance.

Chargeback

A chargeback is a reversal of a credit card transaction, initiated by the cardholder’s bank. It allows consumers to dispute a transaction and recover funds when they believe a purchase was unauthorized, fraudulent, or unsatisfactory.

Checkout Process

The checkout Process is a systematic series of steps that customers follow to complete their purchase, turning items in their shopping cart into a confirmed order.

Consignment Stock

Consignment Stock is inventory that a supplier places at a retailer’s location, with payment made only after the items are sold.

Conversion Rate

The conversion rate is a key performance metric that measures the percentage of visitors to an online store who complete a desired action, typically making a purchase.

Cost of Goods Sold (COGS)

Cost of Goods Sold (COGS) is a financial metric that represents the direct costs associated with producing or acquiring the products that a company sells during a specific period.

Cross-Selling

Cross-selling is a sales technique that encourages customers to purchase additional products or services related to what they are already buying.

CSV File (Comma-Separated Values)

A CSV (Comma-Separated Values) file is a simple text document that stores data in a table-like format, where each line represents a row and values are separated by commas.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) is a key metric in the ecommerce industry that measures the total cost associated with acquiring a new customer.

Customer Engagement

Customer Engagement is the interaction between a brand and its customers, aimed at building relationships and loyalty.

Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) calculates the overall revenue a company anticipates earning from an individual customer during the entire duration of their relationship.

Customer Retention

Customer Retention is the ability of a business to keep its customers over time, reducing churn rates.

Customer Segmentation

Customer Segmentation is the practice of dividing a customer base into distinct groups based on shared characteristics for targeted marketing.

Data Feed

A data feed in ecommerce is a structured file that contains product information and is used to share data between online retailers and various platforms, such as search engines, affiliate networks, and comparison shopping sites.

Delivery Confirmation

Delivery confirmation in ecommerce refers to the process of verifying that a package has been delivered to its intended recipient.

Demand Forecasting

Demand forecasting involves using historical sales data, market analysis, and other relevant information to predict how much of a product customers will purchase over a specific period.

Direct to Garment (DTG)

Direct to Garment (DTG) is a digital printing technology that allows for high-quality, full-color designs to be printed directly onto fabric, particularly t-shirts and other clothing items.

Direct-to-Consumer (DTC)

Direct-to-Consumer (DTC) is a retail model where brands sell their products directly to customers, bypassing traditional retail intermediaries like wholesalers and brick-and-mortar stores.

Distribution Channel

Distribution channel is a system that moves products from the manufacturer to the end customer. It involves intermediaries like wholesalers, retailers, or marketplaces that facilitate the process of product delivery.

Distributor

A distributor is an intermediary that buys products in bulk from manufacturers and sells them to retailers or directly to consumers. They manage the logistics of product storage and transportation, acting as a link in the supply chain between the producer and the market.

Domain Name

A domain name is a web address that directs users to a specific site. It’s a unique identifier that helps customers find your ecommerce store online. Without it, you don’t have an accessible online presence.

Dropshipper

A dropshipper is a seller who lists products for sale online without holding inventory. When a customer places an order, the dropshipper buys the item from a third-party supplier, who ships it directly to the customer. The seller earns by marking up the product’s price.

Dropshipping

Dropshipping is a retail model where the seller lists products for sale but doesn’t keep inventory. When a customer places an order, the seller purchases the item from a third party, usually a manufacturer or wholesaler, who ships it directly to the customer. The seller’s role is to market and manage sales while outsourcing fulfillment.

Dropship Management

Dropship Management is the process of overseeing orders that are shipped directly from suppliers to customers without handling the product.

Dropship Vendor

A Dropship Vendor is a supplier that fulfills orders by shipping products directly to the customer on behalf of the retailer.

Dynamic Pricing

Dynamic pricing is a strategy where product prices are adjusted in real-time based on market demand, competitor pricing, or inventory levels. It allows ecommerce businesses to react to fluctuations in supply and demand, optimizing revenue.

Ecommerce Platform

An ecommerce platform is a software application that allows businesses to manage their online sales operations, where they can display products, accept payments, and process orders from customers through the Internet.

EDI (Electronic Data Interchange)

EDI (Electronic Data Interchange) is a system that allows businesses to exchange documents like orders and invoices electronically in a standardized format.

End-to-End Automation

End-to-End automation is a process that automates all stages of a workflow from start to finish without human intervention.

Epacket

Epacket is a shipping method that allows small packages to be sent from China and Hong Kong to various countries, primarily used for ecommerce transactions.

ERP (Enterprise Resource Planning)

ERP (Enterprise Resource Planning) is a software solution that integrates various business processes and functions into a unified system.

FBA (Fulfillment by Amazon)

Fulfillment by Amazon (FBA) is a service that enables sellers to outsource their order fulfillment processes to Amazon. This includes storing inventory in Amazon’s warehouses, where Amazon handles packing, shipping, and customer service for the seller’s products.

Fulfillment

Fulfillment is a process that involves managing the steps necessary to deliver products to customers, from inventory storage and order processing to shipping and tracking. It requires coordination of logistics and efficient handling of customer expectations.

Fulfillment Center

A fulfillment center is a specialized warehouse that stores and processes inventory for ecommerce businesses. It manages order fulfillment by picking, packing, and shipping products directly to customers, enabling retailers to focus on sales and marketing while streamlining logistics.

Fulfillment Center Management

Fulfillment Center Management involves overseeing operations within a warehouse that stores and ships products directly to customers.

Fulfillment Efficiency

Fulfillment Efficiency measures how quickly and accurately orders are processed and delivered to customers.

Google Ads

Google Ads is a pay-per-click advertising platform developed by Google that enables businesses to display ads across various Google services and partner websites.

Google Shopping

Google Shopping is a product discovery and comparison platform operated by Google. It enables users to search for products, view listings from various retailers, and compare prices, facilitating informed purchasing decisions.

Google Trends

Google Trends is a data analysis tool that provides insights into the popularity of search queries over time.

Gross Margin

Gross marginis a key financial indicator that shows the percentage difference between revenue and the cost of goods sold (COGS).

Gross Profit

Gross profit is the revenue remaining after deducting the cost of goods sold (COGS). It reflects the profitability of core business operations before accounting for operating expenses, taxes, and other costs.

Google Ads Google

Ads is a pay-per-click advertising platform developed by Google that enables businesses to display ads across various Google services and partner websites.

Google Shopping

Google Shopping is a product discovery and comparison platform operated by Google. It enables users to search for products, view listings from various retailers, and compare prices, facilitating informed purchasing decisions.

Google Trends

Google Trends is a data analysis tool that provides insights into the popularity of search queries over time.
Gross Margin Gross margin is a key financial indicator that shows the percentage difference between revenue and the cost of goods sold (COGS).

Gross Profit

Gross profit is the revenue remaining after deducting the cost of goods sold (COGS). It reflects the profitability of core business operations before accounting for operating expenses, taxes, and other costs.

Handling Time

Handling Time is a metric that measures the duration taken by a system to process, manage, or complete a specific task or transaction from start to finish.

HTML (Hypertext Markup Language)

HTML (Hypertext Markup Language) is a markup language used to define the structure and content of web pages. It employs a series of tags and elements to format text, embed images, create links, and organize the layout of web documents, providing the foundational framework that browsers interpret to display content on the web.

Hybrid Dropshipping

Hybrid dropshipping is a fulfillment model that combines owning a portion of your inventory with leveraging third-party suppliers. This approach allows for more control over product availability and fulfillment speed while still benefiting from the scalability of traditional dropshipping.

Hyper-Targeting

Hyper-targeting is a marketing strategy that focuses on delivering highly relevant messages to specific audience segments based on detailed consumer data.

Integration

Integration is a process that connects different systems or platforms to work together seamlessly. It allows data and functions to flow between various applications, enhancing efficiency and streamlining operations in e-commerce.

Integrated Systems

Integrated Systems refer to combined software solutions that work together to share data and automate processes.

Inventory

Inventory is a collection of goods and materials held by a business for the purpose of resale or production. It serves as a buffer between supply and demand, enabling efficient order fulfillment and operational continuity in e-commerce.

Inventory Management

Inventory management is a systematic approach to sourcing, storing, and selling inventory. It involves tracking stock levels, orders, and deliveries to ensure optimal supply chain efficiency and meet customer demand effectively.

JSON (JavaScript Object Notation)

JSON (JavaScript Object Notation) is a text-based data interchange format used to represent structured data. It organizes data into name/value pairs and arrays, making it suitable for transmitting information between web clients and servers.

Just-in-Time (JIT)

Just-in-Time (JIT) is a supply chain management strategy that ensures materials and products are delivered only as they are needed in the production process.

Key Performance Indicators

(KPIs) Key Performance Indicators (KPIs) are quantifiable metrics used to evaluate the success of an ecommerce business in achieving its objectives.

Keywords

Keywords are words or phrases that describe the main topics of content. They help search engines understand what a webpage or article is about, making it easier for people to find relevant information online.

Landing Page

A landing page typically serves as the destination for visitors who click on a link from an email, advertisement, or search engine result. The primary goal of a landing page is to convert visitors into leads or customers by encouraging them to take specific action.

Lead Time

Lead time is a measure of the time elapsed between the initiation of a process and its completion. In ecommerce, it typically refers to the duration from when an order is placed until it is shipped or delivered to the customer.

Listing Fees

Listing fees are a payment charged by online marketplaces or classified websites when you list your products or services for sale. It’s like paying a fee to set up your shop on a platform.

Logistics

Logistics involves organizing, executing, and overseeing the smooth transportation and storage of products, starting from their source and ending with the final customer.

Manufacturer

A manufacturer is a business or individual that produces goods for sale. In ecommerce, manufacturers create products and often supply them directly to retailers or wholesalers, playing a key role in the supply chain and product availability.

Manufacturer’s Suggested Retail Price (MSRP)

Manufacturer’s Suggested Retail Price (MSRP) is a price point recommended by the manufacturer for retailers to sell a product. It serves as a guideline for pricing strategies in ecommerce, helping to standardize retail prices across different channels while allowing flexibility for retailers to adjust based on market conditions.

MAP (Minimum Advertised Price)

MAP (Minimum Advertised Price) is a policy set by manufacturers that establishes the lowest price at which retailers can advertise a product.

Margin

Margin is the difference between the selling price and the cost of goods sold, indicating profitability.
Marketplace Marketplace is an online platform that facilitates transactions between buyers and sellers, allowing them to connect and exchange goods or services.

Marketplace Optimization

Marketplace Optimization refers to strategies aimed at improving visibility and sales performance on online marketplaces.

Markup

Markup is a pricing strategy that determines the difference between the cost of a product and its selling price. It is expressed as a percentage of the cost and influences profit margins in ecommerce transactions.

Market Expansion

Market Expansion involves strategies to increase a company’s reach into new markets or demographics.

Minimum Order Quantity (MOQ)

Minimum Order Quantity (MOQ) is a predefined number of units that a buyer must purchase from a supplier in a single order. It serves as a threshold to ensure suppliers can cover production costs and manage inventory effectively. MOQs are common in wholesale and manufacturing contexts.

Multi-Channel Ecommerce

Multi-channel ecommerce is a strategy that allows businesses to sell products across various platforms and marketplaces simultaneously.

Multichannel Selling

Multichannel selling is a strategy that involves selling products across multiple platforms, such as online marketplaces, social media, and a brand’s own website.

Net Profit

Net profit is the amount remaining after all expenses, including cost of goods sold, operating expenses, taxes, and interest, have been deducted from total revenue.

Net Terms

Net terms is a payment arrangement in which a buyer is allowed a specified period, typically 30, 60, or 90 days, to pay for goods or services received.

Niche Market

A niche market is a specific segment within a broader market that addresses unique consumer needs and preferences.

Notification System

A notification system is a framework that delivers timely updates and alerts to users about critical info in an ecommerce platform.

Order Fulfillment

Order fulfillment is a process that involves receiving, processing, and delivering customer orders. It encompasses inventory management, order processing, packaging, and shipping to ensure timely delivery and customer satisfaction.

Order Management System (OMS)

Order Management System (OMS) is a software platform that facilitates the processing and tracking of customer orders across various sales channels.

Order Tracking

Order tracking enables buyers to keep tabs on the progress and whereabouts of their purchased products as they move through the delivery process.

Outsourcing

Outsourcing is a business practice where a company hires another organization to handle specific tasks or services instead of doing them in-house. This approach can help reduce costs and allow the company to focus on its core activities.

Overhead

Overhead is a business cost that doesn’t directly relate to making a product or providing a service. It includes expenses like rent, utilities, and salaries that keep the business running.

Overhead Costs

Overhead Costs is a term used to describe the expenses that a business incurs but cannot be directly attributed to a specific product or service. In simpler terms, it refers to the costs that are necessary for the operation of the business but do not directly contribute to generating revenue.

Payment Card Industry (PCI)

The Payment Card Industry (PCI) is a global standard that sets security requirements for organizations that handle credit card information. It helps protect cardholders’ data from unauthorized access and fraud.

Payment Gateway

A payment gateway is a service that allows businesses to accept payments online. It acts as a middleman between the customer’s bank and the merchant’s bank, securely processing transactions and ensuring payment information is protected.

PayPal

PayPal is a digital payment platform that allows users to send and receive money online easily. It lets individuals and businesses make transactions securely without sharing their financial information.

Point of Sale (POS)

Point of Sale (POS) is a system where sales transactions occur, including hardware and software that manage sales processing.

Pop up

A Pop up is a temporary promotional message or advertisement that appears on a website.

PPC (Pay-Per-Click)

PPC (Pay-Per-Click) is a digital advertising model where advertisers pay only when someone clicks on their ad.

Print on Demand (POD)

POD (Print on Demand) is a printing technology that allows products to be printed as orders are received rather than in bulk.

Pricing Strategy

Pricing Strategy is the method used to set prices based on market research, competition, and perceived value.

Private Label

Private Label refers to products that a retailer brands as their own, typically made by a third-party manufacturer. This allows retailers to offer unique products without investing in production, while often providing better profit margins.

Product Catalog

A product catalog is a structured list of items available for sale, including details like descriptions, prices, and images. It helps customers browse and select products easily in an online store or physical shop.

Product Information Management (PIM)

Product Information Management (PIM) is the process of managing and centralizing product data to ensure accuracy across various sales channels.

Product Return Rate

Product Return Rate is the percentage of products returned by customers after purchase, indicating customer satisfaction and product quality.

Product Feed

Product Feed is a file that contains data about products offered for sale, used to populate online marketplaces and advertising platforms.

Profit Margin

Profit Margin is the difference between the sales revenue and the cost of goods sold, expressed as a percentage of revenue.

Purchase Order (PO)

Purchase Order (PO) is a document issued by a buyer to a seller indicating the details of a purchase.

Quality Control

Quality control involves implementing procedures to verify that products conform to defined standards and satisfy customer requirements.

QuickBooks

QuickBooks is accounting software that helps businesses manage their finances, including invoicing and expense tracking.

Real-Time Inventory Sync

Real-Time inventory sync is a system that updates inventory levels automatically as sales occur to maintain accurate stock information.

Real-Time Data

Real-Time data refers to information that is delivered instantly after collection, allowing for timely decision-making.

Reorder Point

Reorder Point refers to a designated inventory threshold that signals the need to place a new order to restock items before they are depleted.

Repricing

Repricing is the process of changing the prices of products in response to market conditions or competitor pricing.
Reseller A Reseller is a business or individual that purchases products to sell them again, often at a markup.

Restocking Fee

Restocking Fee is a charge applied when a returned item is restocked, typically to cover handling costs.
Retail Arbitrage Retail Arbitrage is the practice of buying products at a lower price from retail stores and selling them at a higher price elsewhere.

Retailer

A Retailer is a business or individual that sells products directly to consumers.

Return on Investment (ROI)

Return on Investment (ROI) is a measure used to evaluate the efficiency of an investment, calculated as the profit gained relative to the cost of the investment.

Return Policy

Return Policy is a set of rules and guidelines that a company or business follows when a customer wants to return a product they purchased. It typically outlines the conditions under which a return is acceptable, the time frame for returns, and any fees or restocking charges that may apply.

ROI (Return on Investment)

ROI (Return on Investment) is a financial metric used to assess the profitability of an investment.

Search Engine Results Page (SERP)

A Search Engine Results Page (SERP) is what a search engine presents to users after they input a search query.

SEO (Search Engine Optimization)

SEO (Search Engine Optimization) is a process that helps improve a website’s visibility on search engines.

Shipping

Shipping is the process of preparing, packaging, and transporting purchased goods from the seller’s location to the buyer’s designated address.

Shipping Carrier

A shipping carrier is responsible for the physical movement of packages and ensuring they reach their destination safely.

SKU (Stock Keeping Unit)

SKU (Stock Keeping Unit) is a unique code used by retailers to track specific products in their inventory. It helps identify details like size, color, and type for easier stock management.

Social Proof

Social Proof is the influence that the actions and opinions of others have on an individual’s behavior, often used in marketing to build trust.

Stripe

Stripe is a payment processing platform that enables businesses to accept various forms of payments, including credit and debit cards, online. It simplifies transactions for online sales and offers additional services like billing and invoicing to help manage financial operations efficiently.

Supplier

A supplier is a business that stocks products and fulfills orders on behalf of a dropshiper. They ship directly to the dropship’s customers without the retailer needing to handle inventory.

Supplier Integration

Supplier Integration means connecting your online store’s system directly to your suppliers. This lets you automatically send orders to them and update inventory in real time without manual steps.

Supply Chain

Supply Chain refers to the entire network involved in producing and delivering a product, from raw materials to the end customer.

Supply Chain Management (SCM)

Supply Chain Management (SCM) is the oversight of the flow of goods and services from suppliers to customers.

Third-Party Logistics (3PL)

Third-Party Logistics (3PL) is a service provider that manages logistics and distribution operations on behalf of another company.

TLS (Transport Layer Security)

TLS (Transport Layer Security) is a cryptographic protocol designed to secure communications over a computer network.

Tracking Number

A Tracking Number is a unique code assigned to a package or shipment that allows you to follow its progress from the sender to the recipient.

Traffic

Traffic is the number of visitors or potential customers that come to a website or online platform. It measures how popular a site is and indicates how many people are interested in its content or products.

Unique Selling Proposition (USP)

Unique Selling Proposition (USP) is a statement that highlights the distinct benefits or features of a product that set it apart from competitors.

Upselling

Upselling is a sales approach where a seller persuades a customer to opt for a more expensive item or an upgrade than what they initially intended to buy.

URL (Uniform Resource Locator)

A URL (Uniform Resource Locator) is a specific address used to access resources on the internet, such as web pages or files. It typically includes the protocol (like HTTP), the domain name, and the path to the resource.

User Experience (UX)

User Experience (UX) refers to the overall experience a user has when interacting with a website or application.

User Generated Content (UGC)

User Generated Content (UGC) is any form of content created by users of a platform, often used for marketing and engagement.

User Interface (UI)

User Interface (UI) refers to the space where interactions between humans and machines occur, allowing users to operate devices and applications effectively. It encompasses various elements that facilitate this interaction, including visual components like buttons, icons, and menus, as well as audio elements.

Value Added Tax (VAT)

Value Added Tax (VAT) is a consumption tax levied on the value added at each stage of a product’s production and distribution.

Value Proposition

Value Proposition is a statement that explains how a product meets the needs of customers, providing clear benefits.

Vendor

A vendor is a person or business that sells goods or services to another party. They can provide products directly to consumers or supply items to other businesses for resale.

Warehouse Management System (WMS)

Warehouse Management System (WMS) is software designed to support warehouse operations, including inventory tracking and order fulfillment.

Warehousing

Warehousing is the process of storing goods in a designated space, often a warehouse, to ensure their availability for future use or sale. It involves various activities such as receiving, storing, and distributing products efficiently.

White Label

White Label refers to products produced by one company but sold under another company’s brand without any branding.

Wholesale

Wholesale is the sale of goods in large quantities, typically to retailers or other businesses.

Wholesale Price

Wholesale price is the price at which a manufacturer or distributor sells goods in bulk to retailers or other businesses, typically at a lower cost per unit than the retail price.

Wholesaler

A Wholesaler is a business that sells goods in bulk to retailers or other distributors rather than directly to consumers.

Workflow Automation

Workflow Automation is the process of automating complex business processes and functions to improve efficiency.

WooCommerce

WooCommerce is a WordPress plugin that allows users to create and manage an online store.

XML (eXtensible Markup Language)

XML (eXtensible Markup Language) is a markup language used to store and transport data in a structured format.

Yield Management

Yield Management is the process of optimizing revenue by managing pricing and inventory based on demand.

Zero Inventory

Zero Inventory is a management strategy where a company maintains no surplus stock, relying on just-in-time delivery to meet demand.