This ecommerce glossary compiles greater than 85 of the most typical phrases you could know when promoting on-line in 2020.
Whether or not you’re simply beginning out or are a long-established vendor within the ecommerce trade.
This A-Z dictionary will provide help to navigate via all of the jargon, abbreviations and technical terminology you’re prone to come throughout throughout your ecommerce profession.
I all the time maintain this glossary up to date, so be sure you bookmark this web page and use it as your go-to useful resource to search for any time period sooner or later.
Above the fold
Describes the seen display screen property of an ecommerce web site a consumer sees with out scrolling. It’s also also known as “above the scroll“.
The experiment of showing two variants of the same web page, marketing campaign, etc. to different segments of consumers at the same time to compare which variant drives more conversions.
Websites, tools, and technologies designed and developed so that people with disabilities can use them.
Stands for advertising cost of sale; a metric used to measure the performance of an Amazon Sponsored Products campaign. ACoS indicates the ratio of ad spend to targeted sales and is calculated by this formula: ACoS = Ad Spend ÷ Sales.
A marketing arrangement where a publisher and an advertiser join forces to market to the consumer. The publisher promotes a service or product on their website or social media channel. If the consumer buys the product, the publisher gets a commission fee from the advertiser.
The A-to-Z Guarantee is Amazon’s customer protection scheme that ensures the on-time delivery and stated condition of items sold by third-party sellers. If items arrive in a damaged state or are not delivered by the merchant in the first place, Amazon will refund the customer.
Amazon’s Product Advertising API is a web service application programming interface (short: API). It enables third parties to access Amazon’s product catalogue data so that sellers and vendors can streamline their inventory and product catalogue management.
Amazon Brand Registry
Brand Registry is a programme designed to protect brands and their intellectual properties on Amazon. It enables merchants with registered trademarks to accurately represent their brands and to enrol for processes that address infringement on the Amazon marketplace.
Amazon Standard Identification Number (ASIN)
Amazon’s Standard Identification Number (ASIN) is a unique 10-character alphanumeric identifier for a product on Amazon (for example B07ZB5C3ZM). It is linked to a unique SKU/EAN/ISBN code and is used as a reference to manage catalogue attributes, prices and inventory of a product.
Amazon Vendor (1P)
An Amazon vendor operates as a wholesale supplier to Amazon. It is also known as the 1P (first-party) model, where Amazon buys the product from a brand and is free to set their own prices.
Stands for add to cart rate; the percentage of visitors that add items to the shopping cart.
Average Time On Site
The average amount of time your visitors spend on your ecommerce site.
Average Transaction Value (ATV)
The average dollar amount that a customer spends with your business in a single transaction.
Average Order Value (AOV)
The average total of every order placed with a retailer over a defined period of time. The formula to calculate AOV is revenue divided by the number of orders.
Average Selling Price (ASP)
The average selling price (ASP) refers to the price at which a product is typically being sold. The ASP differs from the Recommended Retail Price (MSRP) because it reflects the actual price at which a product was sold.
A+ content is available for first-party (1P) vendors on Amazon. It allows them to use enhanced multimedia features to better present the value of their products and brands to customers.
Basket building refers to the strategy of encouraging customers to build their virtual shopping cart. The more items a customer checks out with, the lower are typically the relative shipping and handling costs to fulfil the order.
Below the fold
Below the fold describes the content of a website a user only can see when scrolling down the page. It usually contains more detailed information about a product or service, compared to the immediately visible above the fold area.
Stands for buy one, get one free; a type of promotion for sellers to increase the value of an offer without giving a price discount.
Also known as net income, is revenues minus expenses. It describes the profit or loss a company makes when selling an item. There is a profit when revenues exceed expenses. There is a loss when expenses exceed revenue.
Refers to a companies’ ambition to improve their profitability when selling products online. The aim is to either reduce costs or to increase the sales volume to grow the net income of a business.
The Bounce Rate is the percentage of visitors that leave an online shop after only viewing one page or product without making a purchase.
Brick and Mortar
Refers to the physical stores of retailers, typically found on side-streets in cities and areas with a high density in population. Examples of brick and mortar retailers are Tesco, Walmart, or Sainsbury’s.
Business to Business (B2B)
The term Business to Business ecommerce refers to the sale of goods between two businesses via an online shop or marketplace.
Business to Consumer (B2C)
The term Business to Consumer ecommerce refers to the sale of a product between a business and a consumer for personal use. The financial transaction takes place over the Internet.
The process of pairing two or more products together and selling them to consumers as a combined package. An example of a product bundle would be to sell a cutting board together with a set of kitchen knives.
The term Buy Box refers to the area on the Amazon product detail page where customers can choose to add products to their shopping cart.
The buy box area allows customers to make a wide range of choices: Purchasing products with a 1-click-option, selecting the seller to buy the product from, subscribing to buy replenishable products on a recurring basis, etc.
See also: Lost Buy Box
A call-to-action (CTA) stands for a specific instruction towards a user to trigger a certain response or behaviour. Examples of CTA’s include ‘Get Started’, ‘Learn More’, or ‘Join The Newsletter’ buttons on a website.
A chargeback (also: reversal) is the return of a credit card charge to the customer. Chargebacks are initiated by the card company or bank following a dispute from the card owner as part of customer protection schemes. They protect customers from fraudulent charges. If claimed, the buyer is reimbursed in full.
The churn rate, also known as attrition rate, describes the rate at which customers typically stop making repeat purchases from a seller within a given time frame. The formula is as follows: Customer Churn Rate = (Lost Customers ÷ Acquired Customers) x 100%
The rate at which a consumer completes a desired action. In ecommerce, it typically measures how many users of an online shop convert into buying customers. It is calculated as follows: Number of Converted Users ÷ Number of Total Users x 100
An HTTP cookie (also called web cookie, online cookie, or browser cookie) is a data piece that allows online shops to mark, track and recognize their visitors. Cookies allow online shops to personalize the customer journey, based on the stored user settings and preferences.
Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS) refers to the direct production costs of the goods sold by a company. In other words, it describes how much it costs to produce a product. COGS include direct raw material and labour expenses, but exclude indirect cost components, such as marketing and shipping.
The price at which a retailer or merchant buys a product from the manufacturer.
Customer Lifetime Value (CLV)
A metric to describe the expected monetary value of a customer to a business during their lifetime. The CLV helps businesses to evaluate, whether customer acquisition and marketing costs will amortise over the lifespan of the customer relationship.
Customer Relationship Management (CRM)
Refers to the practices, strategies and technologies a company uses to manage and organise its interactions with potential and existing buyers throughout the customer lifecycle.
The evaluation of a product or service, published by a customer who experienced or used the product or service. Customer reviews usually evaluate and describe the functionality, ease of use and perceived value-for-money ratio of a product or service.
Describe purchased items that are returned by consumers. Depending on the country, retailers are legally obliged to offer customers the opportunity to return items within a certain period of time after the purchase.
The page of an ecommerce site that presents the details of a specific product. It usually refers to the page from which a customer would place the product in its basket.
Refers to the act of buying products directly from a manufacturer in a foreign country. It removes the need for a middleman to import the goods for sale and the dependency on local suppliers. This typically reduces the operational costs and cost prices of imported products.
A retail fulfillment method where a retailer or merchant transfers its customer’s orders to a third party to process and ship the products.
Describes all commercial transactions conducted electronically using the Internet. In simple terms, it refers to buying and selling products or services online.
The use of email to promote a product or service to consumers. It is used as a cost-effective marketing tool to build and develop relationships with (potential) customers and to drive repeat sales over time.
Fulfillment by Amazon (FBA)
Fulfillment by Amazon is an ecommerce service with which sellers can store their inventory in Amazon’s fulfillment centers. When customers purchase a product, Amazon picks, prepares and ships the order directly to the customer.
Fulfillment Center (FC)
A fulfillment center is a warehouse where customer orders are received, processed and fulfilled from. This term is predominantly used by Amazon and abbreviated as ’FC’.
A glance view describes the number of impressions on a product detail page on Amazon. It is a metric used to quantify how many visitors have viewed a product page or product advertisement.
The gross profit describes the total revenue minus cost of goods sold (COGS). It reflects the profit before operating expenses and is described as an absolute number in the local currency.
The technical separation of the front- and back-end of an ecommerce platform. In other words, the content presentation layer (the customer touchpoint) is decoupled from back-end critical ecommerce processes, such as inventory management and payment processing.
The quantity or value of the stock position of a manufacturer or retailer. Inventory can describe the number of sellable products or the number of raw materials that are later being used in the manufacturing process.
Just in Time Manufacturing
A production method in which products and their components are only being produced when they are ordered by customers. As such, just-in-time manufacturing removes the need to store large amounts of unsold stock in warehouses as excess inventory.
Key Performance Indicator (KPI)
A Key Performance Indicator (KPI) is a measurable value that allows businesses to track and analyse their performance over a certain period of time. It enables organisations to evaluate their success at reaching their set targets.
Keywords describe the terms used by customers to search for products online. In ecommerce, keywords often describe the product attributes, use cases and functionalities, e.g., ‘bottle’, ‘adjustable’, ‘portable’, …
A web page that serves the sole purpose of persuading visitors to take a desired action. It is specifically designed to either drive engagement or sales (e.g., encouraging visitors to sign up to a newsletter or to make a purchase).
License Plate Receive (LPR)
Describes the receiving process of items in an Amazon Fulfillment Center by scanning the barcode of an outside package. LPR eliminates the need to scan each individual item and reduces the time to receive items in the warehouse.
Logistics refers to the procurement, maintenance and transportation of raw materials, products, facilities and personnel within an organisation.
Lost Buy Box (LBB)
Describes the situation when an available item appeared on a product detail page on Amazon but was not featured to get directly added to a customer’s cart when pressing the “buy” button. It’s calculated as (Look Views with Misplaced Purchase Field * 100) / Whole Look Views.
Refers back to the distinction between a vendor‘s cost of acquiring a product and the selling price. Margins are expressed as percentages (%) of net sales revenues.
Reading recommendation: The complete guide to profit margins.
See also: Gross Profit, Net Profit
An online marketplace (also: ecommerce marketplace) is an ecommerce platform with multiple third-party merchants selling goods or services, whereas transactions are processed by the marketplace owner.
Minimum Order Value (MOV)
The Minimum Order Value (MOV) describes the smallest dollar value that may be ordered in one delivery or purchasing order.
Minimum Order Quantity (MOQ)
The Minimum Order Quantity (MOQ) describes the smallest number of products that may be ordered in one delivery or purchasing order.
The mix-effect describes a profitability change within a product portfolio of a merchant or retailer, driven by a change of the sold product mix. A change in the product mix affects sales and profits even if the average selling price remains unchanged.
Also referred to as bottom-line, net earnings or net income. Net profit describes the total revenue minus the total expenses of a company. Total expenses include operating costs, taxes, stock dividends, interest, etc.
The term omnichannel commerce describes a multichannel approach aiming to create a seamless customer experience across multiple touchpoints along the customer journey. An omnichannel approach ensures that messages, prices and marketing offers are aligned across channels.
Out of Stock (OOS) Rate
The Out of stock (OOS) rate, also referred to as stockout rate, describes the number of items that are not available for customers to purchase when they seek to place an order.
The term Private Label refers to products that are sold by a retailer under its own brand but produced by a third-party manufacturer. These products are typically sold at a lower price point and as a direct rivalling alternative to products from national or international brands.
Purchase Order (PO)
A purchase order (PO) is a commercial document between a buyer and a supplier. It outlines the details about the product, quantity, cost price, delivery date, etc. a buyer agrees to purchase from the supplier.
A qualified lead is a prospect (consumer) who has expressed interest in a product or service and meets a set of pre-defined criteria. These criteria are often set by the marketing & sales department of a company.
Recommended Retail Price (RRP)
The Recommended Retail Price (RRP) constitutes the officially suggested selling price of a product by the manufacturer to a retailer.
Also often referred to as top line or gross income figure. Revenue describes the generated income from sales of goods or services as part of the main operations of an ecommerce business.
SAAS, or Software as a Service, describes the delivery of a service over the Internet on a hosted application. In other words, the ecommerce software runs on the servers of the provider. This way, users don’t must obtain, set up and keep the (ecommerce) software program themselves.
Search Engine Optimization (search engine optimization)
Search Engine Optimization (search engine optimization) is the observe of bettering the natural search rank of a web site to drive visibility and visitors from search engine end result pages.
A vendor is a 3rd social gathering service provider that provides its merchandise by way of the Amazon market. Sellers can both make the most of their very own provide chain processes or participate in Amazon’s FBA program to ship merchandise to prospects.
Describe featured promoting placements on the search end result and product element pages on Amazon. Sponsored Adverts goal to drive conversion and visibility to merchandise offered on the Amazon market.
Inventory Retaining Unit (SKU)
A stock-keeping unit (SKU) is a scannable bar code that’s assigned to a definite product. It’s an alphanumerical mixture of sometimes (however not restricted to) eight digits, permitting corporations to trace the motion and ranges of stock of their warehouses.
Provide Chain Administration
Refers back to the administration of the move of products and providers alongside the transformation means of uncooked supplies into the ultimate product. In Ecommerce, Provide Chain Administration focuses on the processes concerned to effectively supply a completed product from the producer, storing (warehousing) it and to successfully ship it to the top buyer.
Refers to an organization’s income that’s generated from the gross sales of its merchandise. It’s outlined as Gross sales Quantity * Common Promoting Value. The ‘top-line’ wording comes from the truth that the income is being positioned on the high of the revenue assertion of an organization.
Third-Get together Vendor (3P)
Describes the customers’ beliefs, preferences, perceptions, bodily and psychological responses that end result from looking, shopping for and receiving a product alongside their buyer journey.
Distinctive Promoting Proposition (USP)
The USP highlights the superior advantages of a services or products which are significant to shoppers and create extra worth in comparison with related gives out there section.
Refers back to the promise of clear, measurable and demonstrable advantages a buyer will get when shopping for a specific product. The worth proposition ought to persuade prospects that the product is best than the opposite options available on the market.
The utilization of voice recognition expertise that allows shoppers to buy on-line merchandise or providers.
If you wish to improve your gross sales with voice commerce, check out my in-depth information to voice commerce!
Refers back to the observe of shopping for merchandise in bulk (at giant portions) at low costs, with the intention to re-sell them to different retailers. A wholesaler sits because the ‘middlemen’ between the producer and the vendor.
A warehouse is the placement of a constructing through which uncooked supplies or completed manufactured items are being saved earlier than they’re distributed to retailers or despatched to the end-customer.
Cross-Channel or Multi-Channel Administration is the tactic of promoting a product on a number of on-line marketplaces on the similar time. It diversifies the income supply of an organization and will increase the attain of the shopper base.
XML Sitemaps present engines like google with a complete listing of the URLs on a web site. They establish and sorts of knowledge an ecommerce web site gives and assist engines like google to grasp the hierarchy, construction and recency of class, product and touchdown pages.
12 months-over-12 months (YoY)
Refers back to the monetary comparability of key efficiency indicators in successive years. It’s used to find out, whether or not the efficiency of a sure metric has improved, worsened or remained flat versus the comparable time interval of the earlier yr.
12 months-to-Date (YTD)
Describes the time interval from the start of the present yr (both calendar or fiscal yr), as much as the current day.
Refers to a listing management mechanism that eliminates any waste on account of built-up stock ranges. An organization that follows a zero stock strategy will solely maintain the required objects at hand that it expects to promote in a set time frame.
Have I missed something?
I hope this glossary has helped you perceive a number of the most typical phrases on the planet of ecommerce. Or possibly a couple of time period I haven’t lined right here?
Both method, let me know and go away a remark under.