eCommerce is a rapidly growing industry, and the language used to discuss trends and strategies can be intimidating for those who are unfamiliar with the terminology.
To help make sense of this industry jargon, this glossary provides definitions of over 200 of the most used eCommerce terms.
Whether you are new to eCommerce or an experienced professional, there’s always something new to learn.
And, in this comprehensive eCommerce glossary, we’ll aim to have all the bases covered in helping you understand each of the key concepts used in the eCommerce industry today.
To find the phrase you’re looking for, either use the table of contents below (all terms are in alphabetical order) or use CTRL + F to search your browser in Windows, and CMD + F on Mac.
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‘0-9’ eCommerce Terms
301 Redirect
A 301 redirect is a permanent redirect from one URL to another. This informs search engines that the content has permanently moved to a new location and should update its link.
3PL (Third-Party Logistics)
Third-party logistics services are aimed at managing eCommerce order fulfillment, warehousing, and shipping. This allows eCommerce brands to outsource some of their operations for cost savings and scalability.
404 Error
A 404 error is an HTTP status code (i.e. website status code) that indicates the server was able to communicate with the given URL, but the page could not be located. When a visitor encounters a 404 error on a website, it means they were unable to find the requested content.
‘A’ eCommerce Terms
A-to-Z Guarantee
The A-to-Z Guarantee is a protection provided by Amazon for buyers who purchase goods from third-party sellers. If an item doesn’t arrive, is significantly not as described, or fails prematurely, the buyer can file a claim with Amazon and receive a refund.
A/B Testing or Split Testing
A/B testing (also known as split testing) is a method of testing two versions of a page (or other features such as the main image on an Amazon listing) against each other to determine which version performs better. This type of test can be used to help eCommerce stores optimize their website and improve conversion rates.
Above the Fold
Above the fold refers to the visible area on a webpage before scrolling down. eCommerce businesses need to ensure the most important information is visible above the fold, including calls to action and featured products.
A+ Content
A+ content is a type of enhanced content Amazon offers to eCommerce sellers. This feature allows businesses to add images, videos, and additional product information to enhance the look and feel of their product listings on the Amazon platform.
Abandoned Cart
An abandoned cart is when a customer initiates the checkout process but fails to complete their purchase. eCommerce stores use abandoned cart emails as a way to remind customers of items in their shopping carts and encourage them to finish their orders.
Advertising Cost of Sale (ACoS)
Advertising Cost of Sale (ACoS) is a metric eCommerce businesses use to measure the efficiency of their Amazon Ads campaigns. ACoS is calculated by dividing the total ad spend by the sales generated from those ads.
Affiliate Marketing
Affiliate marketing is a revenue-sharing program where affiliates promote products or services on behalf of an eCommerce store, getting a commission based on the number of sales they generate.
Amazon Associates
Amazon Associates is an affiliate program that lets bloggers, content creators, and influencers earn money by referring customers to Amazon.
Amazon Attribution
Amazon Attribution is a tool businesses can use to measure the impact of their Amazon ads and off-site campaigns. With Amazon Attribution, eCommerce stores can gain insights into how their ads are performing across different channels.
Amazon FBA (Fulfillment by Amazon)
Amazon FBA (Fulfillment by Amazon) is a service offered by the eCommerce giant that allows businesses to store their products in Amazon warehouses and have them shipped directly to customers, taking advantage of the huge Amazon Prime program.
Amazon FBM (Fulfillment by Merchant)
Amazon FBM (Fulfillment by Merchant) is where Amazon sellers store and ship their own products. This allows sellers to take advantage of Amazon’s huge customer base without having to pay the extra fees associated with FBA.
Amazon Prime
Amazon Prime is a subscription-based service offered by Amazon that provides members with free two-day shipping on eligible products, as well as access to streaming video and music content.
Amazon Standard Identification Number (ASIN)
An Amazon Standard Identification Number (ASIN) is a unique alphanumeric code assigned to each product on the Amazon marketplace. It’s used for tracking and managing products within the platform.
API (Application Program Interface)
An API (Application Program Interface) is a set of instructions used for two software programs to communicate with each other. eCommerce stores use APIs to integrate their eCommerce platform with third-party services such as payment gateways, shipping carriers, and more.
Arbitrage
Arbitrage is a type of eCommerce business model that involves buying products from one source (such as online marketplaces) to resell them for a higher price at another source. This is popular on Amazon in the form of both Retail Arbitrage (buying from physical stores) and Online Arbitrage (buying online).
Attribution Model
Attribution modeling is the process of assigning credit to different channels or marketing activities to better understand which ones are driving the most sales. eCommerce stores use attribution models such as first-click and last-click to measure the performance of their eCommerce campaigns.
Average Order Value (AOV)
Average Order Value (AOV) is a metric eCommerce stores use to measure the average amount customers spend during each purchase. eCommerce businesses can use AOV to better understand their customer’s buying habits and identify opportunities for increasing sales. AOV is calculated by dividing the total revenue by the number of orders.
Audience Segmentation
Audience segmentation is the process of dividing an eCommerce store’s customer base into smaller groups based on shared characteristics such as location, purchase history, and more. eCommerce stores use audience segmentation to better understand their target customers and create customized marketing campaigns for each segment.
‘B’ eCommerce Terms
Back Order
A backorder is when an eCommerce store cannot fulfill a customer’s purchase due to stock unavailability. eCommerce stores often use back orders as a way to continue taking orders when out of stock by promising a future delivery date to customers.
Backlinks
Backlinks are links from other websites to eCommerce stores. eCommerce businesses use backlinks as a way to increase their website’s authority which helps increase visibility in search engine rankings and drive more organic traffic to their website.
Banner Ads
Banner ads are online advertisements displayed on websites or social media platforms, usually in the form of banner images or videos. eCommerce stores often use banner ads to promote their products and services to a wider audience.
Benchmark
Benchmarking is a process eCommerce stores use to compare their performance against their competitors. eCommerce stores can compare metrics such as website visits, average order value, and conversion rate to identify areas of improvement and stay ahead of the competition.
Billing Address
A billing address is the address businesses ask their customers to provide when making a purchase. eCommerce stores use this information to verify the identity of their customers and prevent fraud.
Blog
A blog is an area of a website where eCommerce stores can post content such as product reviews and tutorials. Online retailers often use blogs to provide helpful information to customers, build trust, and increase their visibility in search engines.
Bootstrapping
Bootstrapping is the process of starting an eCommerce business without external funding. Usually, the founder will provide the seed capital themselves.
Bottom of the Funnel (BOFU)
Bottom of the Funnel (BOFU) is a term eCommerce stores use to refer to customers who are close to making a purchase. An online business can use BOFU marketing activities such as email campaigns and retargeting ads to further encourage these customers to make a purchase. Related: MOFU & TOFU.
Bottom-line
Bottom line is a business term eCommerce stores use to refer to their total profits after expenses are taken into account. Businesses can track bottom-line performance to better understand the financial health of their business.
Bounce Rate
Bounce rate is a metric eCommerce stores use to measure how often customers leave the store’s website without taking any desired actions such as making a purchase or subscribing to an e-mail list. An online store can use bounce rate as a way to measure website performance and identify potential areas of improvement.
Brand Awareness
Brand awareness is a measure of how familiar customers are with a particular brand. Online retailers use brand awareness metrics such as website visits and social media followers to better understand how their brand is performing.
Brand Loyalty
Brand loyalty refers to the tendency of customers to repeatedly purchase from the same brand. Brand owners should focus on developing high-quality products and use loyalty programs and customer segmentation to increase repeat purchases and maximize profits.
Brand Referral Bonus
The Brand Referral Bonus is a scheme that Amazon introduced, rewarding brands that drive sales via external traffic sources. Brands can receive an average bonus of 10% of the sale price when driving external traffic to listings.
Brand Registry
Brand Registry is a tool Amazon sellers use to protect and grow their brands on Amazon. Sellers can register their trademark and brand name with Amazon to prevent counterfeiters from using their branding and to give access to advanced marketing tools like Sponsored Brand Ads and A+ Content.
Brand Voice
Brand voice is the tone and style eCommerce stores use in all of their communications. A strong brand voice helps brands build good relationships with customers and create an emotional connection.
Branding
Branding is the process businesses use to create a unique identity and image in customers’ minds. Brands can create strong branding by using distinctive logos, slogans, and promises that differentiate them from their competitors.
Brick and Mortar
Brick and Mortar is a term eCommerce stores use to refer to retail stores located in physical locations. Online retailers can complement their eCommerce sites with a brick-and-mortar presence by opening physical stores or partnering up with existing retail businesses.
Best Seller’s Rank (BSR)
Best Seller’s Rank (BSR) is a metric Amazon uses to rank every product on the platform in order of sales velocity. Each category has its own BSR and a lower BSR indicates better sales performance and higher visibility on Amazon.
Business to Business (B2B)
Business to Business (B2B) eCommerce refers to transactions between businesses. In B2B eCommerce, businesses can purchase products and services from other companies for their own use or resale.
Business to Consumer (B2C)
Business to Consumer (B2C) eCommerce refers to transactions between businesses and customers. In this model, customers can purchase products and services directly from an eCommerce site.
Buy Box
The Buy Box is the area on an Amazon product detail page where customers can add the product to their cart. When multiple sellers are offering the same product, Amazon decides which seller is displayed in the buy box based on performance metrics such as price and delivery speed.
Buyer Persona
A Buyer Persona is a representation of a business’s ideal customer based on research and analysis. You can use buyer personas to understand your target audience better and develop marketing strategies that appeal to them.
‘C’ eCommerce Terms
Cache
Cache is a type of temporary storage that websites use to ensure faster loading times. Caching allows an online store to hold content and data on local servers so they don’t have to fetch it from the database every time a page is loaded.
Call To Action (CTA)
A Call To Action (CTA) is a call on eCommerce websites to encourage customers to take action, such as subscribing to a newsletter or making a purchase. CTAs are typically displayed prominently in the form of buttons, banners, and other visuals.
Cart Abandonment
Cart abandonment occurs when customers add items to their cart but don’t complete the purchase. eCommerce brands can use strategies such as email marketing and retargeting to reduce cart abandonment and increase conversions.
CBM (Cubic Meter)
CBM (Cubic Meter) is a unit of measurement used to calculate the volumetric weight of a shipment. CBM is primarily used when shipping bulk orders of products internationally and many freight forwarders will quote shipping costs based on a per CBM rate.
Chargebacks
A chargeback is a type of reimbursement a customer claims via their credit card company when they don’t receive the product or service they purchased. Every online business should have an effective dispute resolution process in place to avoid multiple chargebacks and protect its reputation.
Chatbot
A chatbot is a computer program that uses artificial intelligence to simulate conversations with customers. eCommerce stores can use chatbots on their website, social media, and mobile apps to engage with customers and provide support 24/7.
Checkout Process
The checkout process is the final step in eCommerce transactions, where customers enter their payment details to complete a purchase. eCommerce stores should make sure their checkout process is secure and straightforward to ensure customer satisfaction and reduce cart abandonment.
Churn Rate
Churn rate is a metric that businesses use to measure customer attrition – or the percentage of subscribed customers that cancel subscriptions. eCommerce stores should strive to keep their churn rate as low as possible to retain customers and maximize revenue.
Click Fraud
Click fraud is a type of fraud where malicious actors click on eCommerce ads with the intent of generating illegitimate income or wasting a competitor’s ad budget. To reduce click fraud, eCommerce advertisers should use advanced analytics tools to monitor and analyze traffic sources.
Click Through Rate (CTR)
Click Through Rate (CTR) is a metric that measures how often customers click on ads or other promotional content. CTR is calculated by dividing the total number of clicks by the total number of impressions. eCommerce stores can use CTR to measure the effectiveness of their ads and adjust their strategy accordingly.
Cloud-Based Platform
A cloud-based eCommerce platform is an online store that uses cloud computing to host and manage data. Cloud-based eCommerce platforms are often more scalable and secure than on-premise solutions and offer features such as automated backups, support for multiple payment gateways, and real-time analytics.
Content Management System (CMS)
A Content Management System (CMS) is a software platform used to manage eCommerce websites and their content, such as WordPress, Magento, and Shopify. eCommerce brands can use CMS platforms to build their website, manage inventory and orders, and create personalized customer experiences.
Conversion Rate
Conversion rate is a metric that eCommerce stores use to measure the percentage of visitors who take an action, such as making a purchase or subscribing to a newsletter. eCommerce brands can use optimization strategies such as A/B testing and personalization to improve their conversion rates.
Conversion Rate Optimization (CRO)
Conversion Rate Optimization (CRO) is the process of testing different elements on eCommerce websites to improve customer engagement and maximize conversions. eCommerce stores can use CRO strategies such as A/B testing, personalization, content optimization, and user experience optimization to increase their conversion rates.
Cookies
Cookies are small pieces of data stored on a user’s computer by websites. eCommerce stores can use cookies to remember customers, track their browsing behavior, and target them with personalized content and offers.
Cost of Goods Sold (COGS)
Cost of Goods Sold (COGS) refers to the total cost businesses incur to produce and deliver a product or service. eCommerce brands should track their COGS to calculate their gross profit margin and ensure they are pricing products correctly.
CPA (Cost-Per-Action)
Cost-per-action (CPA) is a type of online advertising in which eCommerce stores pay a commission to affiliates for each completed action, such as a sale or lead. CPA is also known as cost-per-acquisition and can be used to generate targeted traffic to eCommerce websites.
CPM (Cost Per Mille)
CPM (Cost Per Mille) is a pricing model used by eCommerce stores to measure the effectiveness of their advertising campaigns. Advertisers pay a certain amount for every 1,000 impressions (or views) of their advertisement. CPM is also known as cost-per-thousand or cost-per-impressions and can be used to generate targeted traffic to eCommerce websites.
Cross-selling
Cross-selling is a sales technique used by eCommerce stores to increase average order and customer lifetime value. eCommerce brands can use cross-selling strategies such as product recommendations and upsells to introduce customers to additional products that may be of interest.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is a metric eCommerce stores use to measure the cost of acquiring new customers. This metric helps eCommerce businesses understand how much they need to spend to acquire a customer, and can be used to adjust their pricing and marketing strategies.
Customer Journey
The customer journey is the process customers go through when they interact with a brand, from discovery to purchase to post-purchase. eCommerce brands should map out their customer journeys to understand how customers are engaging with their brand and where there are potential opportunities for improvement.
Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is a metric that an online store can use to measure the total value of customers over the lifetime of their relationship with the company. eCommerce stores can use CLV to identify and target high-value customers, track customer retention rates, and optimize marketing campaigns.
Customer Relationship Management (CRM)
A Customer Relationship Management (CRM) system is a software tool businesses use to organize and manage customer data. Businesses can use CRMs like Hubspot to collect, store, and analyze customer data to better understand their customers and create personalized experiences. A CRM is more often used in the service industry as opposed to eCommerce.
Customer Retention
Customer retention is a measure of how well businesses can keep customers coming back. eCommerce brands can use loyalty programs, personalization, and customer service strategies to increase customer retention and create long-term relationships with their customers.
Customer Reviews
Customer reviews are a form of user-generated content that businesses can use to showcase customer experiences and build trust. eCommerce stores should encourage customers to leave reviews to increase their visibility on search engines and boost conversion rates.
Customer Segmentation
Customer segmentation is the process of dividing eCommerce customers into groups based on their interests, behaviors, or other characteristics. eCommerce stores can use customer segmentation to create more tailored content and offers for different customer segments.
‘D’ eCommerce Terms
DDP (Delivery Duty Paid)
DDP (Delivery Duty Paid) is an eCommerce shipping term in which the supplier is responsible for paying all duties, taxes, and other fees related to the shipment. Startup eCommerce store owners often consider using DDP when shipping internationally as it can reduce workload and streamline their supply chain management.
Domain Name
A domain name is the address of a website, e.g. www.example.com. You should carefully research and choose a relevant domain name to ensure your online store can be easily found by customers and search engines alike.
Downsell
Downsells are eCommerce sales techniques used to offer customers a lower-priced alternative to encourage them to make a purchase. eCommerce brands can use downsells as part of their cross-selling strategies, or when customers are on the fence about purchasing an item.
Drip Email Campaign
A drip email campaign is a series of emails eCommerce stores send to customers over time to nurture leads and increase sales. eCommerce businesses should use drip email campaigns to keep customers engaged, inform them of new product releases, and promote special offers.
Dropshipping
Dropshipping is a type of eCommerce business model in which the eCommerce store does not hold any inventory. Instead, orders are fulfilled by the supplier who ships directly to the customer. eCommerce stores may choose this model if they want to reduce costs and simplify their supply chain management.
‘E’ eCommerce Terms
EAN (European Article Number)
An EAN, or European article number, is an international product identification code used to uniquely identify products. eCommerce businesses in Europe often use EANs to label their products for accurate identification and fulfillment.
EBITDA
EBITDA means Earnings Before Interest, Taxes, Depreciation, and Amortization and is a measure of a business’s financial performance that focuses on its core operations. eCommerce stores can use EBITDA to track their profitability and ensure their business is moving in the right direction.
eCommerce Platform
An eCommerce platform is a software solution eCommerce stores use to manage and run their online store. eCommerce platforms provide features like product catalogs, payment processing, order management, and more to help eCommerce businesses succeed. Our #1 recommended platform is Shopify.
eCommerce Plugins
eCommerce plugins are third-party tools eCommerce stores can use to extend the functionality of their website. eCommerce plugins (or apps) may provide features like loyalty programs, shipping integrations, or product personalization to help eCommerce stores offer a better shopping experience.
Email Marketing
Email marketing is the practice of using emails to promote products or services and build relationships with customers. Successful eCommerce stores will use email marketing to send promotional offers, announce new products or services, and keep existing customers engaged.
Email Automation
Email automation is the process of setting up automated emails that are triggered by customer behavior or other events. eCommerce stores often use email automation to send welcome emails, abandoned cart notifications, or order confirmations to improve customer experience and drive increased revenue.
Engagement Rate
Engagement rate is a measure of how successful brands are at engaging their customers. eCommerce stores can track their engagement rate by measuring metrics like open rates, click-through rates, and social media interaction to determine the effectiveness of their marketing campaigns.
EXW (Ex Works)
EXW stands for Ex Works and is a type of international trade term eCommerce businesses may use. In this scenario, the eCommerce store would be responsible for arranging transport from the supplier’s premises to their own to ship products to customers. This will save on costs with a supplier but increase your transport costs.
‘F’ eCommerce Terms
Faceted Navigation
Faceted navigation is a type of eCommerce navigation feature used to refine product search results, for example, from category pages. eCommerce stores use faceted navigation to allow customers to quickly find products by filtering them based on criteria like size, color, price, and more.
Favicon
A favicon is a small icon that appears in the tab of web browsers. An online store may choose to add a favicon to make its website look more professional and stand out from the competition.
FCL (Full Container Load)
FCL stands for Full Container Load and is a type of shipping eCommerce stores may use when ordering products from overseas suppliers. In this scenario, eCommerce businesses would rent an entire container to transport their products at once, which can save on costs compared to LCL (Less than Container Load).
FNSKU
FNSKU stands for Fulfillment Network Stock Keeping Unit and is an Amazon-specific identifier eCommerce businesses that sell on the Amazon Marketplace may use to track their inventory. Amazon will assign FNSKUs to each product on its platform to ensure accurate tracking, ordering, and fulfillment.
FOB (Free on Board)
FOB stands for Free on Board and is an international trade term (Incoterm) businesses may use when dealing with overseas suppliers. With FOB the buyer will be responsible for all shipping costs once the goods have been loaded onto the supplier’s vessel.
Freight Forwarder
Freight forwarders are service providers that simplify the process of shipping products overseas. Freight forwarders provide services like customs clearance, warehousing, and managing paperwork to help businesses with international trade.
Fulfillment Center
A fulfillment center is a warehouse eCommerce brands may use to store their products and manage their order fulfillment process. Fulfillment centers are located all over the world and provide services like order processing, shipping services, and inventory management to help online stores with their eCommerce needs.
Funnels
Funnels are a series of steps eCommerce stores may use to guide customers through their purchasing journey. Funnels may include marketing campaigns, landing pages, checkout processes, and follow-up emails to increase the likelihood that customers make a purchase.
‘G’ eCommerce Terms
Google Analytics
Google Analytics is a web analytics service businesses can use to track and analyze their website traffic. eCommerce stores can use Google Analytics reports to understand which pages are most popular, where visitors are coming from, and what keywords they are using to optimize their website for better performance.
Gross Profit
Gross profit is the amount of money eCommerce businesses make after subtracting their cost of goods sold (COGS) from their total revenue. Gross profit does not include all expenses and as such is only a limited view of the profitability of a business.
Growth Hacking
Growth hacking is a method businesses use to rapidly increase their customer base. Growth hackers focus on using data-driven approaches, such as A/B testing, to optimize the user experience and generate more sales from existing customers.
GST (Goods and Services Tax)
GST stands for Goods and Services Tax and is a type of tax eCommerce businesses may need to pay when selling products in certain countries (most notably Canada and Australia). GST is typically charged on the sale of goods or services, but rules can vary from country to country.
Guest Checkout
Guest checkout is an eCommerce feature that allows customers to purchase products without creating an account. Guest checkout makes it easier for customers to make purchases quickly and may help eCommerce stores increase their sales by removing the barrier of setting up an account.
‘H’ eCommerce Terms
Hashtag
A #hashtag is a keyword businesses may use to promote their products or services on social media platforms such as Twitter and Instagram. eCommerce stores can use hashtags to target specific audiences and gain visibility for their brand.
Headless eCommerce
Headless eCommerce is a modern approach to eCommerce that separates the front-end presentation layer from the back-end eCommerce platform. This allows eCommerce stores to take advantage of the latest technologies and keep their websites up-to-date with minimal effort.
Hijacker
eCommerce hijackers are malicious actors who purchase products from eCommerce stores using stolen credit card information and reselling them for a profit. eCommerce businesses can protect themselves from hijackers by utilizing fraud-detection systems, such as Address Verification Service (AVS) or Card Security Code (CVV2).
‘Hijacker’ is also a term used on Amazon when sellers list inventory on your product’s listing. This can be as harmless as a reseller or can be a seller listing counterfeit products for sale which should be reported inside Brand Registry.
Homepage
The homepage of an eCommerce website is typically the first page customers will see when they visit the site. eCommerce stores should use their homepage to showcase their products, highlight special promotions, and link to other pages on the website.
HS Code (Harmonized System Code)
An HS Code is an 8-digit code used to identify eCommerce products for export or import. eCommerce stores shipping internationally should make sure they are aware of the relevant HS Codes to comply with customs regulations and avoid delays or fines.
HTML
HTML (Hyper Text Markup Language) is a coding language used to create websites. eCommerce stores should ensure their websites are built using valid HTML code to ensure they are compatible with all browsers and properly indexed by search engines.
HTTPS
HTTPS (Hyper Text Transfer Protocol Secure) is an encrypted version of the HTTP protocol used to communicate between web servers and clients. eCommerce stores should enable HTTPS on their websites to ensure data is encrypted and secure.
‘I’ eCommerce Terms
Image/Alt Text
Alt text is a piece of HTML code that provides an alternative description for images on eCommerce websites. eCommerce stores should use alt text to ensure their product images are properly indexed by search engines and accessible to customers with visual impairments.
Impression
An impression is a metric often referred to in eCommerce advertising that measures the number of times an advertisement or product listing is viewed by a customer. eCommerce stores can use this metric to help measure the reach of their marketing campaigns and optimize them accordingly.
Inbound Marketing
Inbound marketing is a strategy that focuses on creating content and campaigns designed to attract customers to your product or service. eCommerce stores can use inbound marketing to build relationships with customers, boost brand awareness, and drive more organic sales.
Incoterms
Incoterms are international trade terms used to define the responsibilities of buyers and sellers in eCommerce transactions. eCommerce companies should make sure they understand the relevant Incoterms when trading internationally as it can affect who is liable for shipping costs, customs duties, and other fees.
Influencer Marketing
Influencer marketing is a form of advertising in which businesses partner with influential figures to promote their products or services. eCommerce companies can use influencer marketing to reach large audiences and increase brand awareness.
Infographic
An infographic is a visual representation of data or information that eCommerce stores can use to communicate complex topics in an easily digestible manner. eCommerce companies can use infographics on their websites and social media pages to attract visitors and improve engagement.
Inventory Management
Inventory management is the process eCommerce stores use to monitor and manage their stock. eCommerce businesses should ensure they have an effective inventory management system in place to avoid running out of stock, manage pricing strategies, and track product performance.
‘J’ eCommerce Terms
JavaScript
JavaScript is a programming language websites use to create interactive features. eCommerce brands should make sure their websites are built using valid JavaScript code to ensure they are compatible with all browsers, properly indexed by search engines, and have good page speeds.
‘K’ eCommerce Terms
KPI (Key Performance Indicator)
A KPI, or Key Performance Indicator, refers to the metrics that are most important in a business. eCommerce companies should track relevant KPIs such as website traffic, customer engagement, and revenue to measure the success of their strategies.
Keywords
Keywords are words or phrases used to help attract customers through search engines. eCommerce stores should research and identify relevant keywords related to their products or industry and optimize their content accordingly to drive more organic traffic.
Keyword Stuffing
Keyword stuffing is a practice in which eCommerce websites over-optimize their content by adding too many keywords in an attempt to manipulate search engine rankings. This should be avoided as it can have negative effects on search engine visibility and lead to penalties from Google.
‘L’ eCommerce Terms
Landing Page
A landing page is a singular website page specifically designed to convert incoming traffic into subscribers or customers. eCommerce businesses should create well-designed and optimized landing pages to capture more leads, increase conversion rates and improve average order value.
Longtail Keywords
Longtail keywords are more specific keyword phrases that are less competitive than short-tail keywords but can still drive targeted traffic to eCommerce websites due to their specificity. eCommerce stores should use longtail keywords in their content and product descriptions to increase visibility and attract qualified customers.
Lookalike Audiences
A lookalike audience is an audience made up of people who are similar to your existing audience. Platforms like Meta (Facebook Ads) will allow businesses to upload customer information in an attempt to find more potential customers who are similar to their existing ones, thereby increasing the chances of customer acquisition and retention.
Loyalty Program
A loyalty program is a promotion eCommerce companies can use to encourage repeat purchases from existing customers. Brands can set up attractive loyalty programs with rewards such as discounts and free shipping to motivate customers to shop more frequently.
LTL (Less Than Truckload)
LTL (Less Than Truckload) is a type of freight shipping eCommerce companies use to ship goods, and is commonly used when sending inventory to an Amazon warehouse. To send an LTL shipment to Amazon (instead of small parcel delivery) you will need to palletize your goods.
‘M’ eCommerce Terms
Manufacturer
A manufacturer is a company that produces goods. eCommerce companies should research and build relationships with manufacturers to source quality products at the best prices. One of the best places to source products in bulk is Alibaba.
Margin (Profit Margin)
A business’ margin, also known as profit margin, is the difference between the cost price and the selling price of goods. eCommerce stores should monitor their margins closely to maximize profits and stay competitive in the eCommerce market.
Marketplace
A marketplace is an eCommerce platform that connects buyers and sellers. eCommerce sellers should research and identify the best marketplaces to list their products to reach a wider audience and increase their sales. Amazon, eBay, and Etsy are some of the most popular eCommerce marketplaces.
Merchant Of Record
A Merchant Of Record (MOR) is a business or individual responsible for receiving eCommerce payments and handling legal compliance. The MOR takes on the financial responsibility and liability of imports, payments, taxes, refunds, and more.
Middle of the Funnel (MOFU)
Middle of the Funnel, or MOFU, is a marketing term used to describe a stage in the eCommerce customer journey where shoppers are researching and comparing products. They are more interested than top-of-funnel browsers, but not quite at the bottom of the funnel ready to buy.
Minimum Order Quantity (MOQ)
Minimum Order Quantity (MOQ) refers to the minimum number of units a manufacturer will accept for an order. Manufacturers set minimum order quantities based on the level of customization requested. eCommerce sellers should negotiate with suppliers on MOQs to maximize their margins while also getting enough inventory to meet customer demand.
Minimum Order Value (MOV)
Similar to MOQ, Minimum Order Value (MOV) is the minimum dollar amount customers must spend to place an order with suppliers. Rather than a number of units, some suppliers may insist on a certain value threshold for a minimum order amount.
Mobile Commerce (mCommerce)
Mobile commerce, or mCommerce, is eCommerce done through mobile devices such as smartphones and tablets. eCommerce companies should optimize their websites for mobile to provide a better user experience and increase conversions.
Multi-Channel eCommerce
Multi-channel eCommerce is a strategy used by eCommerce brands to sell products through multiple platforms. eCommerce companies can use this strategy to reach a larger audience, sell more products, and increase profits. Some of the most popular eCommerce multi-channel strategies include selling on Amazon and eBay simultaneously or using social media to promote products.
‘N’ eCommerce Terms
Net Profit
Net profit is the amount a business earned after all costs, deductions, and taxes have been taken into account. eCommerce companies should monitor their net profits regularly to measure performance and adjust strategies accordingly.
Nexus
Nexus is a concept used to determine which states you have a business presence in, mostly defined by where you operate from (e.g. offices) and where you hold stock. Businesses with nexus in certain states must comply with relevant sales taxes, making it important for eCommerce companies to understand the concept of nexus and their responsibilities.
Niche Market
A niche market is a segment of eCommerce consisting of buyers with specialized needs and interests. eCommerce brands should identify niche markets to target specific customers and focus their marketing efforts more effectively.
‘O’ eCommerce Terms
Off-Page Optimization
Off-page optimization is a search engine optimization (SEO) technique brands can use to improve their website’s ranking in search engine results pages. Businesses can use off-page optimization tactics such as link-building and PR campaigns to boost their SEO and attract more customers.
On-Page Optimization
On-page optimization is an SEO technique used to optimize website content for search engine crawlers. eCommerce marketers should focus on optimizing product descriptions, page titles, meta tags, and other elements of the website to boost their SEO rankings and improve web page visibility on Google and other search engines.
Omnichannel
Omnichannel refers to brands being present across multiple different channels at the same time. As an eCommerce brand grows it can be highly effective to list its best-selling products across as many channels as possible to maximize its revenue.
Open Rate
Open rate is a metric that eCommerce brands use to measure the effectiveness of their email campaigns. The open rate measures the percentage of emails sent that were opened by subscribers, and companies should strive to have a high open rate to get more clicks, engagement, and conversions from their email list.
Order Fulfillment
Order fulfillment is the process of storing, packing, and shipping eCommerce orders. eCommerce brands can handle order fulfillment in-house or outsource to a third-party logistics provider to reduce costs and optimize their supply chain.
Order Tracking
Order tracking is the process of monitoring orders from the moment they are placed until they arrive at their destination. Businesses should provide a reliable order-tracking solution to customers to create a better user experience and build customer loyalty.
Organic Marketing
Organic marketing is a strategy eCommerce brands can use to promote their products without spending money on paid advertising. Businesses can engage in organic marketing activities such as content creation and social media marketing to attract more customers and sales.
Outsourcing
Outsourcing is the practice of hiring a third-party provider to complete tasks that a business does not have the expertise or resources to handle in-house. Businesses are increasingly turning to outsourcing to save time and money, improve efficiency, and increase profits.
‘P’ eCommerce Terms
Page Rank
Page rank is a metric used by search engine algorithms to determine the relevance of web pages in relation to specific keywords. An online store should focus on increasing its page rank for each key web page to improve its website’s visibility and attract more customers from organic search.
Paid Traffic
Paid traffic is a type of eCommerce marketing strategy that involves spending money on advertising campaigns to generate targeted website visitors. eCommerce stores can use paid traffic sources such as Google Ads and Facebook Ads to drive more sales and increase brand awareness.
Parent / Child Listing
A parent/child listing refers to the structure created when listing products on Amazon. Parent listings are the placeholder listings that hold within them the child variations which can be bought by customers. For example, a parent listing could be a yoga mat with the child listings being the blue, black, and red versions of that mat.
Patent
A patent is a document that gives a person or company the right to stop others from making, using, or selling an invention. There are three main types of patents: utility patents for inventions, design patents for designs of new products, and plant patents for new plants.
Pay Per Click (PPC)
Pay-per-click (PPC) is an eCommerce marketing strategy where businesses pay for advertising on a per-click basis. eCommerce stores can use PPC to generate more traffic to their Amazon listings using Amazon PPC or to their website using Google Ads.
Payment Gateway
A payment gateway is a service that an online store can use to process payments from customers. Businesses can choose from a variety of payment gateways such as PayPal and Stripe to securely process transactions and increase customer satisfaction.
Pixel / Tracking Pixel
A pixel or tracking pixel is a piece of code that eCommerce websites install to track customer behavior and website analytics. Businesses can add pixels to their website using services like Facebook Ads to monitor customer interactions, optimize their campaigns, and increase conversions.
Point of Sale System (POS)
A point of sale system (POS) is a piece of eCommerce software used to manage customer orders and payments in a physical store. eCommerce brands looking to make in-person sales at events or pop-up stores often look to use a POS system to make taking payments fast and easy.
Privacy Policy
A privacy policy is a document that businesses must have on their website to inform customers how the business collects, uses, and shares personal data. eCommerce brands should make sure that their privacy policies are up-to-date and comply with all relevant laws.
Private Label
Private labeling is a business model that involves creating your own branded products without needing to manufacture them yourself. eCommerce brands can partner with existing manufacturers to produce their own line of products, customizing them with unique branding and packaging.
Product Bundling
Product bundling is a strategy that involves combining multiple products into a single package and offering them to customers at a discounted rate. eCommerce businesses can use product bundling to increase their average order value, attract more sales, and boost customer loyalty. Amazon sellers can also take advantage of virtual product bundles.
Purchase Order (PO)
A purchase order (PO) is a legal contract between a buyer and seller that outlines the details of an eCommerce transaction. An eCommerce business should always send out a PO to its suppliers to place each order and ensure that all parties are in agreement on the terms of the sale.
‘Q’ eCommerce Terms
Quick Response Code (QR Code)
A Quick Response Code (QR code) is a type of barcode that can be scanned by mobile devices to access information. eCommerce stores often use QR codes on their products or marketing materials to allow customers to quickly access additional product details or promotions.
Quality Assurance (QA)
Quality assurance (QA) is a process of testing products to ensure that they meet the quality standards expected by customers. eCommerce brands should always have a QA process in place to ensure that their products are safe and of good quality before making them available for sale. A popular way to do this is by having third-party inspections on each manufacturing run.
‘R’ eCommerce Terms
Retargeting
Retargeting is an advertising strategy whereby brands re-engage with customers who have previously interacted with a store. eCommerce brands can use retargeting campaigns via email, ads on Google or Facebook, and more to remind customers of their products and encourage them to make another purchase.
Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) is a metric used to measure the effectiveness of eCommerce marketing campaigns by measuring how much revenue is generated for every dollar spent. ROAS is calculated by taking the total revenue generated from a campaign and dividing it by the total amount spent on advertising for that campaign. Blended ROAS refers to the total ROAS of all marketing campaigns combined.
Return on Investment (ROI)
Return on Investment (ROI) is a metric used to measure the profitability of money spent by calculating how much money was made in relation to how much was spent. ROI is calculated by subtracting the total cost of a campaign from the total revenue generated, then dividing that number by the total cost. The better your ROI, the quicker you will be able to grow your business.
Return Policy
A return policy outlines an eCommerce business’s rules and regulations for customers who are returning their purchases. eCommerce stores should have a clear, detailed return policy to inform customers of their rights when it comes to returning items and to avoid any confusion or disputes.
Revenue
Revenue is the total amount of money that an eCommerce business makes from selling products or services. eCommerce stores that are seeing increased revenue can use it to expand their operations and invest in new marketing strategies to grow even further.
Revenue Per Visitor (RPV)
Revenue per Visitor (RPV) is a metric used to measure the performance of eCommerce websites by calculating the total revenue generated divided by the total number of visitors. eCommerce stores should aim to increase their RPV to maximize their profits and become more efficient.
‘S’ eCommerce Terms
SAAS (Software As A Service)
Software as a Service (SaaS) is the delivery of software applications through the internet, allowing eCommerce stores to access and use various tools without having to build their own from scratch. This can include eCommerce platforms, marketing tools, eCommerce analytics solutions, Amazon seller tools, and more.
Sales Tax
Sales tax is a type of consumption tax collected by eCommerce stores in various jurisdictions or states. Online businesses must calculate and collect the appropriate sales tax for each transaction, depending on the location of their customer and their ‘nexus’ status – see definition for further info.
Scarcity
Scarcity is a marketing strategy used by eCommerce stores to encourage customers to purchase a product before it runs out. Some eCommerce stores use tactics such as limited-time discounts and quantity limits to create a sense of urgency and motivate people to buy the product sooner rather than later.
Search Engine Optimization (SEO)
Search Engine Optimization (SEO) is the process of optimizing eCommerce websites to increase their visibility on search engines such as Google. Businesses can use tactics such as keyword research, link building, content optimization, and more to rank higher on search engine results pages and drive more organic traffic to their sites.
Search Engine Results Page (SERP)
A Search Engine Results Page (SERP) is the page that appears in search engine results when someone searches for a specific keyword or phrase. eCommerce stores should aim to optimize their websites and content for certain keywords so that they can appear higher on SERPs and drive more organic traffic to their sites.
Search Terms
Search terms are the keywords or phrases that customers type into search engines when looking for products. eCommerce marketers should always be aware of which search terms customers are using to find their products to optimize their SEO accordingly.
Search Volume
Search Volume is the number of times a keyword or phrase has been searched for in a given period. eCommerce stores can find this data with marketing tools like Google Keyword Planner or Semrush. They can use this data to understand which keywords have high search volume and should be targeted in their marketing campaigns.
Secure Sockets Layer (SSL Certificate)
Secure Sockets Layer (SSL) is a technology used to encrypt data sent between websites and their users. eCommerce stores must have an SSL certificate to ensure that customer information is secure and protected from hackers.
Shipping Plan
A shipping plan is what Amazon sellers will need to create to send stock to Amazon Fulfillment Centers. Sellers can do this by following the Send To Amazon workflow.
Short-tail Keywords
Short-tail keywords are broad terms that eCommerce marketers use to target a wide range of customers. These keywords typically have high search volumes but also a lot of competition, so eCommerce stores should use them in combination with long-tail keywords for better results.
SKU
SKU stands for Stock Keeping Unit and is a unique code used to identify products in eCommerce stores. Brands should create an SKU naming convention and create unique SKUs for each of their products to track inventory and manage orders more efficiently.
Social Media Marketing (SMM)
Social media marketing is the process of creating and sharing content across social media platforms to promote a brand’s products. Businesses can use tactics such as sharing their brand journey, influencer collaborations, and producing engaging video content to reach their target audiences and drive traffic to their sites.
Social Proof
Social proof refers to the strategy of showing potential customers that others are buying and engaging with a brand’s product or service. eCommerce stores can use tactics such as displaying customer reviews, showing off user-generated content (UGC), and highlighting their social media following to demonstrate social proof.
Sponsored Products
Sponsored Products are PPC ad campaigns that sellers can create on the Amazon platform to increase visibility and drive traffic to their product pages. Sponsored Brands and Sponsored Display are the other campaign options, each with its unique benefits.
Supply Chain Management
Supply chain management is the process of managing the flow of goods from suppliers to eCommerce stores. eCommerce businesses should have well-defined processes in place for sourcing, inventory management, order fulfillment, and delivery to maximize efficiency.
‘T’ eCommerce Terms
TACOS
TACOS – an evolution of ACOS – stands for Total Advertising Cost Of Sale and measures the percentage of ad spend in relation to both ad revenue and organic revenue. TACOS is a metric used by Amazon sellers to determine how effectively their Amazon PPC campaigns are improving organic visibility.
Taxonomy
Taxonomy is the structure of how eCommerce stores categorize and organizes products on their website. Categories, subcategories, and product types are all part of the eCommerce taxonomy. Having a well-defined taxonomy structure can help both search engines and customers better understand the structure of your website.
Third-party Payment Processor
A third-party payment processor is a service provider that eCommerce stores use to process customer payments. Popular options include PayPal, Stripe, and Square.
TikTok Shop
TikTok Shop is a feature that eCommerce stores can use to partner with influencers to promote their products on the TikTok platform. Businesses make their products available with set criteria and influencers can choose to promote them for a commission.
Top of the Funnel (TOFU)
Top of the funnel (TOFU) is a marketing term used to describe activities that eCommerce brands use to create awareness and attract new audiences that are in the beginning stages of their buying journey. Tactics such as content marketing and social media campaigns can help grow TOFU audiences that then filter down into MOFU and BOFU.
Trademark
A trademark is a legal designation that brands can use to protect their logos, slogans, and other intellectual property. eCommerce brands should always register trademarks with the relevant authority to protect them from potential infringements.
Traffic
Traffic refers to the total number of visitors that websites receive in a given period. eCommerce websites use traffic metrics, such as page views and unique visitors, to measure their website’s performance and see where they can improve.
Transaction Fees
Transaction fees are the charges businesses incur when processing customer payments online. eCommerce stores should research and compare fees from different payment processors to ensure they get the best deal.
Trust Badges
Trust badges are visuals that eCommerce stores can place on their checkout pages to increase customer trust and reduce cart abandonment. Popular trust badges include VeriSign, McAfee Secure, and Trustwave, which are widely recognized by customers as trustworthy.
Two Factor Authentication
Two-factor authentication (2FA) is a security measure eCommerce stores can implement to increase their account and customer data protection. 2FA requires users to enter two pieces of information, such as a password and a code sent to a mobile number, to access online accounts.
‘U’ eCommerce Terms
Ungating
Ungating is the process of gaining access to Amazon-restricted categories. To ungate a category, eCommerce stores must provide evidence that their products meet the criteria set by Amazon.
Unique Selling Proposition (USP)
Unique Selling Proposition (USP) is a unique feature or benefit that businesses have to offer customers when compared to their competitors. eCommerce brands should clearly communicate the USP of their products and services to differentiate themselves in the market.
Unsubscribe Rate
Unsubscribe rate is a metric marketers use to measure the success of email marketing efforts. The unsubscribe rate captures how many people have opted out of receiving emails from a brand and can help email marketers optimize their campaigns for better engagement.
UPC Code
UPC code (or Universal Product Code) is a barcode system businesses use to identify products. UPC barcodes are typically printed on product packaging with their 12-digit number below and can be scanned at checkout or used for tracking inventory levels.
Upsell
Upsell is a marketing tactic eCommerce stores use to encourage customers to purchase more expensive or additional items. Stores can add upsells in their checkout flow, follow-up emails, or use personalization techniques to suggest relevant products that customers might be interested in buying.
URL
URL (or Uniform Resource Locator) is an address used to access websites. eCommerce websites should have properly formatted URLs that are easy to read and can help boost their organic rankings in search engines.
Urgency Marketing
Urgency marketing is a strategy eCommerce stores use to motivate customers to make quick decisions when buying products. Tactics such as limited-time offers, countdown timers, and “last chance” messages can be used to create urgency and drive conversions.
User Generated Content (UGC)
User Generated Content (UGC) is content created by customers that eCommerce stores can leverage in their marketing efforts. UGC includes reviews, social media posts, and photos and videos featuring the company’s products or services. eCommerce brands should include UGC in their campaigns to add social proof and increase customer engagement.
User Experience (UX)
User Experience (UX) is the overall experience customers have when using a website or eCommerce platform. eCommerce brands should focus on improving their UX design to ensure that customers can easily find what they’re looking for and shop without any issues.
User Interface (UI)
User Interface (UI) is how users interact with websites and eCommerce platforms. eCommerce stores should focus on designing a UI that is simple, intuitive, and visually appealing to customers to drive more conversions.
‘V’ eCommerce Terms
Value Added Tax (VAT)
Value Added Tax (VAT) is a consumption tax eCommerce stores may need to charge customers depending on their country’s regulations. Businesses should be aware of the VAT requirements in each of the countries they operate in and calculate the proper taxes at checkout.
Value Proposition
A value proposition is a business’s unique selling point that sets it apart from competitors. eCommerce brands should craft compelling value propositions to communicate the benefits of their products and services to customers.
Variants
Variants are different versions of a product that eCommerce stores can sell to offer customers greater levels of choice. Variants can be based on several factors such as size, color, shape, and many others.
Viral Content
Viral content is content that spreads quickly on the internet. eCommerce brands can aim to create viral content to increase brand awareness and reach new potential customers. This can be done through blogging, social media posts, videos, or any other form of online content that captures an audience’s attention.
Visual Search
Visual Search is a technology eCommerce stores can use to enable customers to search for items using images instead of keywords. This technology uses artificial intelligence and machine learning algorithms to match products with the image customers upload.
Voice Shopping
Voice shopping is a shopping method mostly pioneered by Amazon with Alexa. Voice shopping eliminates the need for customers to use their hands or devices, making it faster and more convenient for them to shop.
‘W’ eCommerce Terms
Web Analytics
Web analytics is the process of collecting, analyzing, and interpreting data from eCommerce websites. eCommerce websites can use tools like Google analytics to gain insights into customer behavior, track website performance, and optimize their marketing efforts.
Weight/Tier-Based Shipping
Weight or tier-based shipping is a type of eCommerce shipping method based on the weight or size of an order. Instead of charging a flat shipping fee, eCommerce stores can use this model to set different shipping rates depending on the weight or size of the product being shipped.
Wholesale eCommerce
Wholesale eCommerce is eCommerce specifically geared toward businesses that buy large quantities of products in bulk. Businesses can buy products in bulk from existing brands and sell them on platforms like Amazon meaning they don’t have to create new products from scratch.
Word of Mouth
Word of mouth is a powerful marketing tool eCommerce stores should leverage. eCommerce brands can use word of mouth by encouraging customers to leave reviews and share content with their networks in exchange for rewards or discounts.
‘X’ eCommerce Terms
XML Sitemap
XML Sitemaps are used to help eCommerce websites become more discoverable on search engines. eCommerce stores should create an XML sitemap that lists all of their pages and submit it to Google Search Console so they can crawl and index the site.
‘Y’ eCommerce Terms
YouTube Ads
YouTube Ads are a type of advertising that eCommerce stores can use to reach potential customers on YouTube. eCommerce brands can target their ads to audiences using demographics, interests, and other factors to increase website traffic and conversions. The benefit of YouTube Ads is you only pay if someone clicks on your ad or watches more than 30 seconds.
eCommerce Terminology Wrapped
There we have it, over 200 of the most important eCommerce terms for you to know.
Did we miss any? Let us know in the comments below!
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