Ecommerce jargons:

“Language” plays a paramount role in human communication. “Language” binds us together by allowing us to share thoughts, feelings, and ideas. Social interaction is “language”-centric at any given time and period. “Language” and social interaction have symbiotic relations. All of this together signifies the importance of language as an intrinsic part of human life that one cannot avoid.

Suppose you are planning to start your online retail store or are an established business owner in the eCommerce industry. You will likely encounter many terminologies specific to the eCommerce sector. In that case, our article will help you stay on par with the jargon, technical vocabulary, and abbreviations in the e-commerce world. So do give it a read till the end. You can skip ahead to the specific e-commerce term you are looking for, and you must bookmark it for your future reference.

“A” Jargons:

⬥Above the fold:

The visible screen which a visitor sees on the e-commerce website without scrolling. Sometimes it is even referred to as “above the scroll”.

⬥A/B testing:

They are also referred to as split testing or bucket testing. It compares two versions of an email, web page, or any other marketing asset and analyses their performance differences. You can do this by giving one version of the webpage/email/marketing asset to one section of your target audience. And give the other version to another area of the target audience. Then you will be able to observe how each version performs.

⬥Accessibility:

The emphasis on accessibility as e-commerce jargon is vital. Web pages and technology designs are being developed so that people with or without disabilities can use them.

⬥AcoS:

The advertising cost for sales(ACoS) abbreviation specifies the amount spent on ads to targeted sales. To calculate it, the formula is ACoS = Ad Spend/Sales.

⬥Affiliate Marketing:

A marketing orchestration where a publisher and an advertiser join forces to provide goods/services to their buyers. The publisher’s job is to promote the product/service on their website. It can also be a social media channel; the publisher gets a commission from the advertiser if the consumer buys the product.

⬥ATC Rate:

ATC is short for the “Add-To-Cart” rate. It accounts for the percentage of visitors that add items to the shopping cart.

⬥Average Time On Site:

The purpose of the jargon is already given in the name. It refers to the amount of time visitors spend on your site.

⬥Average Transaction Value (ATV) :

To understand ATV, you need to know how it is calculated. It is done by dividing the total amount of all the transactions by the total number of transactions/sales.

⬥Average Order Value (AOV):

The average total of every order placed with a retailer over a defined period.

⬥Average Selling Price(ASP):

The price at which the product is being sold on the website. The average Selling Price differs from the MSRP (Manufacturer’s Suggested Retail Price). It reflects the original price of the product while sold in the market.

“B” Jargons:

⬥Basket Building:

Basket building is an online strategy that encourages customers to fill their virtual shopping carts. When a customer checks out with more items from an online store, it lowers the handling cost of fulfilling the order. Also, it reduces the shipping cost.

⬥Below the fold:

This jargon refers to the content of the website. Users can only see a portion of the content when they scroll down the page. This is a vital part of the website generally. It contains more detailed information about the product than the fold area.

⬥BOGO:

This abbreviation stands for buy one, get one free. The sellers provide a type of promotion instead of giving a price discount.

⬥Bottom-line:

The bottom line is determined by deducting the expenses from the entire revenue. The bottom line explains the profit/loss of the company. The company makes a profit when the income exceeds the costs. As and when the company expenses exceed the revenue. Company encounters loss.

⬥Bottom-Line-Growth:

It refers to the idea of a company aiming to improve its profitability as they sell its products on the online store. Most of the time, bottom-line growth is triggered either by cost reduction. Or the sales volume can also be increased to grow the net income.

⬥Bounce Rate:

The bounce rate is the number of visitors leaving the online shop site after visiting one product page or product.

⬥Brick and Mortar:

This jargon refers to the physical retail stores found on the street. These retail stores are usually located in cities with more populations. For instance, Walmart, Sainsbury’s and Tesco are brick and Mortar retailers.

⬥Business to Business(B2B):

This term is sufficiently available on e-commerce websites- It refers to the sales of services and products between two businesses. This can happen via an online shop or marketplace.

⬥Business to Consumer( B2C):

A sufficiently available term on many online retail/eCommerce websites—the consumer purchases the product from the business owner for personal use. The financial transaction takes place over the internet or at the point of delivery.

⬥Bundling:

When two or more products are combined and sold to the customer, it is known as bundling. Examples of bundling are-when shampoo are sold with conditioner. Or when cutting boards are sold with knives.

“C” jargon:

⬥CTA( call to action):

It is specific instructions provided to the visitors to trigger a particular behavior or response. For example, CTA’s are as follows: BUY NOW, GET STARTED, SUBSCRIBE NOW, and many more.

⬥Chargebacks:

When there is a return of credit charge to the customer, the bank or the card company initiates the chargeback. This is usually done following a dispute from the customer as part of the customer protection schemes. It exists to protect consumers from fraudulent charges. As and when claimed by the customer, it is refunded in full.

⬥Churn Rate:

Churn rate is referred to the rate at which customers stop making repeat purchases from the seller at any given time. It is also sometimes known as attrition rate.
The formula for Churn Rate:
(Lost Customer ÷ Acquired Customers) x 100%

⬥Conversion Rate:

Ecommerce needs to measure How many users of an online shop convert into purchasing customers. Another way of saying it is the rate at which the consumers complete the desired action.

Formula:
Number of Converted Users ÷ Number of Total Users x 100

⬥Cookies:

There are a few types of HTTP cookies, and they are Web Cookie, Online Cookie or Browser cookies. This is a data piece that online stores use to recognize and track their visitors. Cookies personalize the customer journey based on the preferences and store user settings.

⬥Cost Price:

The price at which the merchant or retailer buys a product from the manufacturer is known as the cost price.

⬥Customer Lifetime Value:

It is a metric that defines the value of a customer to an online business during their lifetime. CLV helps them decide whether marketing cost and customer acquisition will amortize over the lifespan of the customer relationship.

⬥Customer Relationships Management (CRM):

The practices, technologies and strategies a company uses to organize and manage all the potential customer interactions are referred to as customer relationship management.

⬥Customer Reviews:

The customer who has used the product or service publishes an evaluation of the product/service. Customer reviews generally describe the functionality of the product/service, ease of use, and advantages of using the product. Customer reviews help viewers perceive the value-for-money ratio for service/product.

⬥Customer Returns:

Describe purchased items that consumers return. Depending on the country, retailers are legally obliged to offer customers the opportunity to return items within a certain period after the purchase.

⬥Cost Of Goods Sold(COGS):

The cost of Goods Sold is defined as how much it costs to produce a product. COGS, in simple terms, only deals with the direct production cost of the goods. Expenses that are considered are labor expenses and direct raw materials costs. But, indirect cost components like marketing and shipping costs are excluded.

“D” jargons:

⬥Detail page:

When you check the product page of an eCommerce website, it provides the needed information about the product. Details about the product help the customer make the purchase. The detail page generally refers to the page from where the customer can add the product to the basket.

⬥Direct Import:

When marketers buy products directly from the manufacturer in a foreign country, it is referred to as direct import. It is usually done to reduce the cost price and the operational price. It is subsequently decreasing the dependency on local suppliers and intermediaries.

⬥Drop shipping:

When a retailer or a merchant transfers a consumer’s orders to a third party, it is done so that the third party can process and ship the product.

“E” Jargons:

⬥Ecommerce:

One of the most straightforward definitions of e-commerce is buying and selling services and products online. Or you can say that all the commercial transactions conducted using the internet are called eCommerce.

⬥Email Marketing:

One of the cost-effective ways of marketing is email marketing. When marketers use email to promote their services and products, they build relationships with their customers and drive sales. In totality, it is referred to as email marketing.

“F” Jargon:

⬥Fulfilment Centre:

The location where the customer’s orders are received, processed and fulfilled. This particular location is referred to as a fulfilment centre.

“G” jargon:

⬥Gross Profit:

Gross profit= Total Revenue- The Cost of Goods Sold(COGS).
The gross profit number reflects the gain before operating expense, usually referred to as the local currency unit.

“H” Jargon:

⬥Headless:

The point of contact for the customers with the eCommerce website is detached from the critical eCommerce processes. For example, payment processing and inventory management have technical separation of the front and back end of an e-commerce platform, referred to as headless.

“I” jargons:

⬥Inventory:

The inventory provides the appropriate number of raw materials used in the manufacturing process. It can also offer several sellable products a manufacturer has. Because, in general terms, it is the value of the stock position of the manufacturer or the retailer.

“J” jargons:

⬥Joint Business Plan:

Joint Business Plan refers to the collaboration made between the supplier and retailer. They collaborate to review their performance/productivity and develop a business plan to grow their business together.

⬥Just In Time Manufacturing:

The product and its components are only produced when the customer orders. Just-in-time manufacturing eliminates the need for ample storage space. It also reduces the chances of hoarding unsold stock in the warehouse.

“K” Jargons:

⬥Key Performance Metrics:

The measurable value that allows tracking and analyses of productivity over a certain period is referred to as a Key Performance Indicator(KPI). It helps businesses evaluate their success and set targets for future goals.

⬥Keywords:

The term customers use to search for products online is known as keywords. The keywords can also describe the product’s uses, attributes and functionalities. Example terms like adjustable, portable and there are many more.

“L” Jargons:

⬥Landing Page:

The landing page serves one of the essential purposes of persuading visitors to take the desired action. The page’s design is done explicitly to either drive sales or engagement.

⬥Logistics:

Logistics is complex as it deals with the detailed organization of maintenance, procurement, and transportation of raw materials and products for organizations.

“M” jargons

⬥Margin:

The eCommerce industry’s margins are addressed as percentages of the total sales revenues. It refers to the price difference between an online retailer and their customer paying for the same product.

⬥Minimum order Value(MOV):

Minimum Order Value sometimes describes the minimum amount marketers require the customers to spend on their online store before marketers can ship their products for free or at an additional price. The Minimum Order Value can also describe the minuscule amount one can order in one delivery.

⬥Minimum Order Quantity(MOQ):

At most, the minimum number of products purchased or ordered in one delivery is referred to as the minimum order quantity.

⬥Mix Effect:

When the profitability of a product is driven by the change within a product portfolio of a retailer, it is known as a mixed effect. The product mix increases sales even when the average selling price remains the same.

“N” jargons:

⬥Net profit:

Net profit is the total expenses( costs, taxes, stock dividends, interest, etc.) deducted from the total revenue. The term bottom-line, net earning, and net income is used.

“O” jargons:

⬥Online Marketplace:

A platform where third-party merchants sell services and goods and the platform owner processes the transactions. It is sometimes referred to as an eCommerce marketplace.

⬥Omnichannel:

Omnichannel is a frequently used term in today’s eCommerce industry. It refers to a multichannel network that aims to provide a seamless customer experience. Omnichannel takes care of customer satisfaction on multiple touch points, ensuring prices, offers, and messages are perfectly aligned across all channels.

⬥Out of Stock( OOS) Rate:

It is a very familiar term for both marketers and customers. It refers to the products and services unavailable for the customer when they try to place an order.

“P” jargons:

⬥Private Label:

A retailer sells products under its brand, but there’s a catch: they are produced by a third-party manufacturer. The advantage of this process is that these are sold at a lower price. That helps them to compete with the rivalling brands nationally and internationally.

⬥Purchase Order(PO):

The buyer provides a commercial document to the supplier. It gives information about the product details, cost, price, delivery date, quality and quantity, easing the buyer’s purchasing process from the supplier.

“Q” jargons:

⬥Qualified Leads:

A company’s marketing and sales department decides the criteria which define a qualified lead. Generally, it refers to prospects who have expressed genuine interest in the services and products and meet the set criteria specified by the organization.

“R” jargons:

⬥Revenue:

Revenue is part of the primary operation of an eCommerce business. It generates income from the goods and services sold on the online platform. Sometimes many eCommerce Moghuls refer to it as a gross income figure or top line

“S” jargons:

⬥SAAS:

SAAS(Software As A Service) is channeling a service on a hosted application over the internet. This process ensures that the eCommerce platform users don’t have to maintain the software themselves. In simpler terms, the eCommerce software is aligned to work in the provider’s services.

⬥Search Engine Optimization:

Search engine optimization (SEO)-The process of improving the quality and quantity of a web page so that it organically ranks better in the search engines/SERPs(search engine result pages)

⬥Stock Keeping Unit(SKU):

The scannable bar code assigned to a product is the stock-keeping unit(SKU). It is an eight-digit alphanumeric combination that companies use. SKU allows companies to track inventory levels in warehouses. It also helps keep track of developments in movement.

⬥Supply Chain Management:

Supply chain management refers to the direction of the high flow of information. The flow cites the transformation of goods and services from raw materials to the finished outcome. The work in supply chain management involves efficiently tracking the finished product from the store and manufacturer and eventually delivering it to the buyer.

“T” jargons:

⬥Top-Line:

The word” Top-Line” comes to use because of a striking reason. It is – that revenue is placed at the top of the company’s income statement. The revenue generated by an organization selling its product is known as topline. Another way of defining it is sales volume multiplied by the average selling price.

⬥Third-Party Seller(3P):

Third-party sellers sell products directly to the customer via the e-commerce marketplace. They pay a varying commission to the eCommerce platform for every product sold, but the third-party sellers directly influence the retail price.

“U” jargons:

⬥User Experience:

User experience refers to customers’ and visitors’ feelings about the eCommerce site. Term user experience has a broad spectrum as it can be related to many things like how easy it is to navigate through a website, seamless payment gateway, how relevant the content information is compared to the niche of the business etc.

⬥Unique Selling Proposition (USP):

USP sheds light on the additional benefits of the products and services that can benefit the customers. It leverages the product’s meaningfulness and adds value to the product/service.

“V” jargons:

⬥Value proposition:

Measurable, verifiable, clear advantages a customer receives from purchasing a product. The value proposition should be convenience and intrigue the customer that the product they are investing in is better than other similar products in the market.

⬥Voice Commerce:

Voice recognition is the “new thing” in the digital world. This technology, which enables customers to purchase products online, is known as voice commerce.

“W” jargons:

⬥Wholesale:

When bought in bulk, the price of the products is comparatively low. This includes the intention to re-sell them to other retailers. The wholesaler is the one who connects the dot between the seller and the manufacturer.

⬥Warehouse:

The location where the raw materials and the finished products are stored. From here, it is distributed to the customers or the retailers.

“X” jargons:

⬥X-channel Management:

Also sometimes referred to as multichannel or Cross-channel. It is an eCommerce tactic of selling products on multiple marketplaces simultaneously. It helps in two things- it increases the customer base and diversifies the company’s source of revenue.

⬥XML Sitemap:

To look for a comprehensive list of URLs and search engines on the site, XML Sitemaps are needed. They identify and types of data an eCommerce site offers and help search engines to understand the hierarchy, structure and recency of category, product and landing pages.

“Y” jargons:

⬥Year-Over-Year:

It is a metric used to understand the performance of a particular factor, whether it has worsened, improved or stayed the same in the previous year’s comparable period. It considers the vital KPIs for financial comparisons in the successive year.

⬥Year-To-Date:

It can be the beginning of the current year(Fiscal year or calendar year up) till the present day.

Z jargon:

⬥Zero Inventories:

Maintaining zero inventory means the company keeps only the required items, that it is expected to sell in a given period. It eliminates any built-up waste in the system with the perfect inventory control mechanism.

 

Conclusion:

Every industry has its very own terminology/buzzwords/jargon. When you hear buzzwords or acronyms for the first time, they can sound very foreign to your ears. Going through all the jargon mentioned above will help you become an eCommerce-savvy person who understands all the eCommerce jargon references.

Apart from understanding the jargon, one needs to work on a lot to become successful in the eCommerce industry. Xpresslane has specially curated blogs on vital topics to learn more about the sector. Click on the link below to learn more.

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