If you’ve been in the eCommerce world for a while, you know the space comes with its own terminology, methodologies, strategies, and tactics. There are many to learn, understand, and implement to ensure your eCommerce business reaches its full potential. So, to get you up to speed, we’ve put together a comprehensive eCommerce glossary. Let’s dive in.

Stock-related terms

Bundling: The process of grouping products together for sale. A brand can create a bundle by packing multiple quantities of the same item into one offer, varying products, or both.

Product kitting: The procedure of taking individual items in any state and turning them into a bundle or kit, typically via packaging.

Variety packs: An offer created by packaging different items or variations of a product together, e.g., multipack chips.

Product kits: Singular items grouped together to form a new product offer. Kits can also be customized to customer specifications per order. A kit usually has a purpose, like simplifying and systemizing a process.

Listing: An online page created on a website or eCommerce marketplace to display products. It holds crucial assets like product descriptions, images, videos, and reviews. It can also act as a landing page for marketing campaigns.

Product descriptions: Text written to highlight the key feature of a product for sale. Weight, measurements, materials.

Minimum Order Quantity (MOQ): A figure that represents the lowest unit quantity you can purchase from a supplier or manufacturer, e.g., 100 boxes.

Economic Order Quantity (EOQ): The order size you need to minimize risks and costs such as holding/storage, shortage, order processing, and waste.

Hazmat: Short for hazardous materials. It’s an umbrella term for liquids and substances that can be flammable, toxic, carcinogenic, corrosive, or dangerous. For example fertilizers or cleaning solutions.

Inventory turnover: Reveals how quickly a business sells through goods. Inventory Turnover is calculated using the formula Cost of Goods Sold / Average inventory value during a specified period.

Auto-replenishment: A subscription model that sends refills to clients on autopilot using machine learning to gauge when customers need to top up their products. It’s also used as a sales and marketing selling convenience and timesaving.

Anticipatory Stock: Inventory purchased and stored in advance of a Season change or major Sale

Beginning Inventory: The value of stock items a the start of a specific accounting period

Ending Inventory: The value of stock items at the end of a specific accounting period; this is also the Beginning Inventory for the next account period

Cycle Counting: A method of periodic inventory taking where only certain portions of stock are counted at a time. This eliminates the need to close entirely to take inventory. 

Periodic Inventory: Physically counting items to ensure counts are accurate with digital records; often the business needs to close while this is underway

Cycle Stock: Also known as working stock; the amount of inventory kept to fulfill anticipated orders for a specific period of time. This is replenished as soon as it is sold.

Demand Forecasting: Using various data points to anticipate demand and help make business decisions such as new products or working relationships.  

Digital Inventory: Number of items in stock based on data from software and digital scanners. Physical Audits should be done periodically to ensure accuracy. 

Physical Inventory: The amount of physical items in stock as confirmed by a person; can be used to confirm Digital Inventory

Pipeline Inventory: Items purchased that are not yet in-hand; may be in-transit or still being manufactured. 

Excess Inventory: Raw materials that are past their expiration dates, unsold items, or otherwise unsellable stock

Psychic Stock: Inventory used for marketing, that is not for sale 

FIFO (First In, First Out): an inventory and accounting method that works on the assumption that items are being sold in the order in which they were purchased. 

LIFO (Last In, First Out): An inventory method based on the newest inventory being sold first. 

Finished Goods Inventory: Items that are packaged and ready for sale; also referred to as Merchandise inventory

Out of Stock: No inventory available, without an anticipated restock date

Reorder Point (ROP): A predetermined inventory point at which specific SKU’s are reordered to maintain stock

Safety Stock: Additional inventory kept on hand for use in case of increased demand or supply issues

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Marketing and sales-related terms

Sustainability: The process of meeting human needs without hindering the progress of future generations or the globe. There are 4 pillars of sustainability: social, human, economic, and environmental.

Social proof: A psychological and social occurrence in which people are influenced by others and, as a result, copy their actions in a situation. Brands use social proof to convince shoppers to buy based on other buyers’ actions.

User-Generated Content (UGC): Content created by your customers and influencers displaying your products. It can take many forms, including short and long-form videos and images.

Landing page: An individual web page set up for people to “land” on after clicking on an ad or link. It can be created on a website or hosted via landing page software.

Influencer marketing: Promoting your brand and products by collaborating with content creators.

SMS marketing: Outreach method to a phone number lead list using text messages. Due to legalities, shoppers often need to opt-in to receive communications and have an opt-out option.

Content marketing: A marketing strategy that involves attracting, nurturing, and closing leads through various content assets like blog posts, case studies, and eBooks.

Email marketing: A marketing strategy executed via email campaigns. The emails educate, build relationships, and drive sales. They include newsletters, nurture sequences, and win-back campaigns.

Affiliate marketing: A marketing method that involves promoting products through influencers and industry experts known as “affiliates”.

Split testing: Also known as A/B testing, split testing is a conversion rate optimization method that involves testing different variations of an element against each other to determine which feature performs best.

Content management system: Software, also called a CMS, centralizes content assets, allowing you to create, edit and manage them across your business ecosystem.

Presale: The sales strategy of selling goods to customers before they’re manufactured.

Giveaways: A marketing strategy involving giving away products via a competition to raise brand or product awareness and increase engagement.

Referral program: A reward system that incentivizes customers to introduce their network to a business.

Customer loyalty program: A program designed to reward customers for repeat purchases and visits.

Customer retention rate: A metric that measures how many of your buyers remain your customers over time.

Bounce rate: A metric that calculates how many visitors go to a webpage and leave without taking action. The formula is: single-page sessions / total sessions.

Conversions: When a prospect or customer sees marketing material and takes action. E.g., a link click, email signup, or purchase.

Average Order Value (AOV): The typical amount a customer spends in your store. AOV is calculated by the formula total revenue / total orders.

Customer Lifetime Value (CLV): How much a buyer is worth to your company on average over the time they spend as your customer.

Pay-per-click (PPC): An advertising vehicle that is used to drive traffic to a website or landing page. The users typically pay for the advertising through impressions and/or clicks generated.

Advertising Cost of Sales (ACoS): A metric that reveals how much you spend on PPC, e.g. (Amazon PPC) to generate revenue. The ACoS formula is (Ad spend / ad revenue) x 100.

ROAS: A KPI which shows how much revenue is generated per $1 spent on advertising. ROAS is calculated by the formula revenue / ad spend.

Cost per click (CPC): Refers to how much you pay as a bid per click. You can set maximum bids to control costs.

Conversion Rate Optimization (CRO): The process of improving your website or landing page to increase the percentage of conversions it generates.

Cart Abandonment Rate (CAR): The percentage of carts users add items to and “abandon” before completing a purchase.

Return on Investment (ROI): A ratio that displays the net income to capital invested over a specified period.

Click Through Rate (CTR): A metric that shows how many people view your ad and click on it compared to how many times it’s shown.

Presale: A sales initiative in which goods are sold (normally at a reduced price) before they’re manufactured.

BFCM: Stands for Black Friday and Cyber Monday and represents two of the most significant final-quarter shopping events in many countries.

eCommerce personalization: The continuous act of providing tailored experiences and communication to shoppers on your website, including personalized offers and product suggestions.

eCommerce landing page: A standalone page built to market eCommerce products and services.

Post-purchase survey: A survey sent to a customer after they’ve made a purchase to gauge satisfaction with their experience.

Checkout optimization: The practice of improving an online store’s checkout process to increase its conversions.

Customer-first data: Insights gathered from prospects and customers with their permission and explicit consent.

Augmented Reality (AR): A technology that creates images and overlays them on the user’s view of the real world, altering and enhancing their view.

Virtual Reality (VR): Technology that creates 3D image simulations. They are used in retail and eCommerce to help shoppers visualize products in their environment or on their person.

Omnichannel eCommerce: a type of selling that aims to make the customer seamless regardless of where they start and finish their buying journey.

Multichannel selling: Selling goods on multiple channels simultaneously. Multichannel selling includes online and offline channels.

3D Secure (3DS): A security protocol built to provide additional security for debit and credit card transactions.

Headless commerce: An eCommerce solution in which the front end is decoupled from the backend. E.g., the customer-facing shopping interface is split up from the background tools and operating systems.

Cross-border eCommerce: The act of selling and fulfilling goods online internationally.

Platform migration: The process of moving from one eCommerce or web platform to another. E.g., switching from Shopify to Magento.

Amazon Seller fees: The charges Amazon levies on sellers. It includes a referral fee, a selling plan subscription, and fulfillment fees (if you fulfill via Amazon).

Live shopping: A marketing initiative in which brands sell goods through a live-stream broadcast.

Amazon seller account suspension: When Amazon removes the selling privileges of a seller account holder. The suspended seller will need to appeal with a Plan of Action to request reinstatement.

Amazon aggregator: A business model which acquires Amazon brands. They optimize the brand’s marketing and backend operation to scale and make a positive ROI.

Amazon Inventory Performance Index: A metric between 0-1000 Amazon assigns stores which measure how effectively a store manages its inventory.

Shopify Audiences: A marketing solution that helps users find and close new customers by creating an audience list of engaged buyers from ad platforms like Facebook and Instagram.

Section 321: A US law issued by the US Customs and Border Protection (CBP) permits low-value shipments to be cleared through customs without imposing taxes and duties and with less paperwork.

Retail Arbitrage: The business model of buying goods from a physical store and selling them with a markup on marketplaces like Amazon and eBay.

Fulfillment and logistics-related terms

Distributed order management system: A rule-based system that helps users manage and fulfill customer orders while keeping costs low and maximizing fulfillment operations and actions.

Inventory management: The process of managing stock levels and flow in a business.

Direct-to-customer (DTC): A business model which involves selling goods to the end consumer with no middleman, e.g., on your own website.

Fulfilled by Amazon (FBA): A fulfillment service offered by Amazon to sellers on its platform. FBA orders get perks like Prime shipping, improving the service for customers and sellers.

Fulfilled by Merchant (FBM): When the sellers execute the order fulfillment for an order on an Amazon order.

FBA Prep: A term that refers to preparing and packaging goods to go into the Amazon FBA network.

Batch fulfillment: A type of shipping process which involves grouping packaged orders to be shipped out simultaneously.

Crowdfunding fulfillment: The processing and shipping of a crowdsourced product to funders.

Amazon Multichannel fulfillment (MCF): A fulfillment program in which Amazon handles the storage, picking, packing, and shipping of orders for goods sold online (and not just on Amazon).

Distributed fulfillment: The fulfillment strategy that involves placing inventory and fulfillment service close to demand and customers.

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Picking: Selecting goods in packing and for shipping.

Packing: packaging goods in anticipation of shipping goods to customers.

Value-added services: Premium services typically offered by 3PLs, which modernize, streamline, and improve fulfillment,e.g., pallet bagging and product kitting.

Barcoding: A service in which barcodes, e.g. UPC codes, are added to products in preparation for storage and sale.

Stock Keeping Unit (SKU): An eight-digit number (usually) that businesses with physical products use to track and manage inventory levels.

Third-Party Logistics (3PL): A service that enables businesses to outsource key parts of backend operations like goods distribution, warehousing, and fulfillment.

Fourth Party Logistics (4PL): A service that allows businesses to outsource the management of their entire supply chain and logistics to one fulfillment provider.

Fifth Party Logistics (5PL): A service that manages all aspects of the business’s supply chain starting at production and ending at delivery.

Prep and pack service: A service offered by a fulfillment provider in which they manage receiving customer orders, arrange the package with the purchased goods, and ship the items.

Backorder: An order that can’t be fulfilled when made due to a lack of available inventory.

Electronic Data Interchange (EDI): Using technology to share data instead of paper-based. For example, customer data and order insights.

Zone skipping: The practice of shipping many packages to a carrier’s parcel hub near the package’s end destination.

Returns process: The process for managing when a customer buys goods from a store and sends it back to your distribution center for a refund or exchange

Shrinkwrapping: A service that involves tightly wrapping boxes or products with a polymer plastic film that “shrinks” around the object.

Relabelling: Relabelling involves taking products with premade labels, e.g. barcodes or printed packaging, and attaching new labels in line with the requirements of the sales channel and brand.

Co-packing: A service that consists of taking goods from their raw and packaging them into finished products.

Pallet bag packing: A fulfillment-related service in which goods are bundled and attached to outbound shipments to a pallet in one go.

Sort and segregation: Also known as sort and seg. A value-added service in which the fulfillment provider handles unloading and reorganizing shipments. It also includes services like stock counting, quality inspection, packaging, and repacking.

Fixed logistics: A logistics approach with more permanent fixtures through assets like leases and owned buildings and takes place in a set location, making set up and take down

Flexible logistics: A logistics model with little to no assets or long-term commitments, allowing for simple setup, adjustment, and take down.

Inbound logistics: Obtaining products and materials from suppliers. 

Assembly Services: Some (not all) 3PLs offer this service to add a finishing touch that manufacturers don’t provide, such as placing items in branded boxes, or adding custom packaging 

Awaiting Delivery Scan: A designation meaning that the item is out for Delivery, but has not been scanned as such; this does not mean that the package has not arrived, as there may be extenuating circumstances, however these discrepancies are often cleared up within a day or so

Carrier Facility: A location that acts as a hub for Shipping Carriers within a region, similar to a Distribution Center

Delivery Duty Paid (DDP) shipping: A method of shipping in which the Seller takes responsibility for all aspects of the sale. If you choose to use this option, the Customer is charged at the time of their order for the product, shipping cost, and associated fees. This will require you, as the seller, to estimate these fees in advance and implement them to amounts charged. 

Delivery Duty Unpaid (DDU) shipping: In this case, the responsibility for Shipping costs is shared between you, the seller, and the buyer. You would ensure that items are received at the Country of Destination, and absorb any associated costs. Once the item has reached Customs, it then becomes the responsibility of the buyer to pay for import Duties or transportation costs before they can claim their items. 

Delivery Exception: Any type of unexpected delay a Shipping Carrier encounters while a package is en-route. This could be anything from poor weather conditions, to a more widespread issue such as border closures. 

Delivery Not Attempted: A message used to show that a package was out for delivery but was unable to be completed. The Driver may have run out of time, or encountered another issue.

Dimensional Weight (DIM): Also known as Volumetric weight, is a formula used by Shipping Carriers to determine cost per Volume for eCommerce packages

Discreet Shipping: A method of shipping where there are no labels, branding, or address to identify the Seller or what the item is. There are a number of reasons this could be selected, from sensitive contents, or detraction of theft. 

Dunnage: Sturdy packaging material to protect items during shipping, such as packing peanuts or bubble wrap. 

Out for Delivery: A notice that the Shipping Carrier has the package on a truck for delivery.  

Packing Slip: An itemized list of all package contents

Reshipment: A replacement shipment sent if an order is damaged, lost, or incorrect. 

Scheduled Delivery Pending: A message received when the shipping carrier is unable to make the delivery as expected and is unable to provide an alternative date

Wrapping up

And, there you have it – a list of commonly used eCommerce terms. For the best results on your selling journey, keep on top of these terms to uplevel your knowledge. Also, use the services and strategies mentioned to get inspired on things you can improve in your eCommerce business for bigger and better wins.

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