Important eCommerce Terms—A Glossary of Terms for Online Sellers
Updated · May 25, 2022
eCommerce is an industry that’s growing at light speed.
It seems that every day it gets bigger, as new innovations appear, and more people join the world wide web.
As with anything, it has its own set of words and phrases. That’s why we’ve prepared this round-up of ecommerce terms. Read on and discover some common ecommerce terminology.
Affiliate marketing is when a company recruits users and websites to advertise their product and rewards them for every successful referral with a cash payment.
B2B means “business to business”, and refers to interactions between two business entities. For example when a manufacturer and a wholesaler interact.
B2C means “business to consumer”.
Most small ecommerce businesses get their profit from these interactions, and they are selling to individual “consumers.”
A bounce rate measures how often visitors to a website immediately leave.
How often they “bounce”. A high bounce rate means that visitors aren’t finding what they’re looking for.
In retail terminology, bundling is when multiple products are offered as a package, this is known as bundling.
Products are normally bundled at a discounted rate in order to encourage buying.
A buy box is the part of a product page that lets users add the item to their cart.
On big ecommerce platforms like Amazon, sellers compete to have their offering appear in the buy box for a particular item.
Call to Action (CTA)
A call to action is an image or piece of writing that asks users to take a desired action.
For example, a CTA could encourage users to signup for a newsletter, or buy a certain item. CTAs are often the central point of online advertising.
This retail jargon refers to times when customers add an item to a shopping cart, but don’t actually buy it.
Carts can be abandoned because the visitor becomes distracted, or they simply second guess the purchase.
Many email services can automatically encourage customers to return and complete the purchase.
Click-through Rate (CTR)
Click-through rates measure the number of times users click a link, such as an advert, or a CTA.
Its formula is the number of clicks divided by the total number of views.
Conversion is a commerce term that refers to a user completing a CTA.
The visitor has now been “converted” into a buyer, subscriber etc
Conversion rate is the percentage of users who convert.
Conversion rate is a point all businesses should focus on improving.
Conversion Rate Optimization
CRO refers to the process of trying to improve a conversion rate.
There are a number of strategies that are commonly employed.
A cookie is a little bit of data that is sent from a website and stored in a user's browser.
Cookies allow businesses to track their visitors across other sites, in order to gather data on them.
This is usually for marketing purposes. Some internet users aren’t too keen on them.
In online jargon, Corporate Memphis refers to the broad range of 2D art styles currently popular in ecommerce and corporate branding and advertising.
It is usually characterized by flat ethnically ambiguous androgynous figures, and pastel or matte colors.
Drip marketing is a type of marketing that involves sending out periodic emails or other communications to customers or prospects.
Dropshipping is an ecommerce model where products are sent straight from suppliers to customers.
The ecommerce store plays no part in the shipping or fulfillment process.
Email marketing is the oldest form of ecommerce marketing.
It makes use of emails to send leads offers, and advertise new things to existing customers.
It was part of sales terminology before ecommerce even got big.
GDPR compliance refers to the following of the General Data Protection Regulation. The GDPR regulates the treatment of user data in the EU. Any business that deals with EU citizens must adhere to the GDPR.
Failure to comply can see a company being hit with heavy fines.
Headless ecommerce is a relatively new style of ecommerce that sees sites made up of components that can be worked on individually, rather than a central monolithic system.
Impressions refer to how many times an advert has been seen.
In commerce and ecommerce terminology, inventory refers to the items that a company has in stock.
Proper inventory management is vital to a successful ecommerce business.
Landing pages are single web pages made with a highly specific purpose.
Usually, they’re created with the purpose is to sell a specific item or get people to subscribe to a newsletter.
M-Commerce stands for “mobile commerce.”
It’s ecommerce done through mobile devices like phones and tablets.
As opposed to ecommerce, m-commerce relies on speed and simplified input mechanics.
Metrics are a system of measurement. In business, metrics are often used to track performance and assess progress against goals.
In retail slang, "niche" refers to a specialized market segment.
This can be things such as location, demographics, or interests.
For example, a company that sells outdoor gear would likely have a different niche than one that sells office supplies.
This term refers to the number of people that open an email, or another type of correspondence.
Its formula is the number of pieces sent divided by the number of times it’s been opened.
This is a term that refers to software that is available for free, with “open source code”, that can be analyzed and modified by anyone. It is often contrasted with SaaS.
"Order fulfillment" is a part of the ecommerce dictionary that refers to the process of completing an order, which typically includes tasks such as packaging and shipping.
In order to be PCI compliant, a seller must meet the technical and operational standards of the Payment Card Industry.
It’s applicable to any seller that accepts credit cards and exists to guard against online fraud and other financial crimes.
Payment gateway is a software application that allows businesses to accept and process credit card payments from customers.
Point of sale system (POS) is one of those commerce terms that can be applied offline.
It refers to software applications that enable businesses to track sales, inventory, and customers' orders and payments.
For ecommerce, this will be part of the payment gateway, but for brick-and-mortar stores, it’ll be the checkout process.
Print on Demand
Print on demand (POD) is a business model where businesses to print products only when they are ordered, instead of printing large quantities in advance.
The most common POD items are clothing and books.
Private labeling is when a company manufactures products for another company to put their own brand on.
In ecommerce jargon, product matching refers to a process in which products are matched with others that are similar or the same.
It can be used to check out the offerings of competitors or to clean up inventory databases by finding duplicates.
Profit margin is income minus expenses divided by income.
This will show a business their profit as a percentage.
Recurring billing is when a user is automatically billed for a subscription when their current subscription ends.
Returnless refund is a policy implemented by some online retailers whereby customers are not required to return items in order to receive a refund.
Amazon was one of the first big platforms to popularize this term in the collective ecommerce glossary.
SEO stands for “search engine optimization”, and it is the process of optimizing the writing and design of the website to achieve a higher ranking in search engine results.
SaaS, or software as a service, is a type of subscription software that allows users to access and use the software from anywhere.
A sales funnel is a type of marketing strategy that involves creating a series of touchpoints with potential customers in order to funnel them towards making a purchase.
There are many different types. These comprise a whole set of ecommerce terms on their own.
A tax levied on the sale of goods and services.
The rate of sales tax varies by region. In many jurisdictions, items such as food and clothing are exempt from sales tax.
Shipping is the process of actually getting items to customers, via courier services, or in-house delivery.
Shipping can be done by land, sea, or air.
Costs for shipping vary depending on the distance the goods need to travel and the speed with which they need to be delivered.
Shopping carts are software systems used by ecommerce websites to enable customers to purchase goods and/or services online.
This is often confusion around this particular piece of ecommerce terminology.
Stores using a shopping cart system will typically add the cost of shipping and taxes to the total price of the order before it is sent to the customer.
A type of ecommerce that relies on social media platforms to drive sales and traffic.
Social ecommerce businesses typically use platforms like Facebook, Twitter, TikTok, and Instagram to promote their products and/or services.
Many social ecommerce businesses also use influencers to reach a wider audience.
Stock Keeping Unit (SKU)
A stock keeping unit (SKU) is a code used to identify a product, usually for the purpose of inventory management.
A storefront is the actual ecommerce site that customers interact with.
In ecommerce slang, turnkey refers to software or tools that is ready to use “out of the box.”
Upselling is a sales technique where sellers try to get a customer to make a more expensive purchase.
It’s often used alongside down selling and cross-selling
Viral marketing is a marketing strategy that tries to get people to share a message, usually through social media.
The goal is to create a "viral" effect, in which the message spreads quickly and widely.
Online, viral marketing usually takes the form of memes, guerilla campaigns, and attempts to get retail buzzwords trending.
White labeling is similar to private labeling, in that involves one company making products for another to sell with their own branding.
It differs in that white-labeled products are mass-produced, and the same product can be sold by different sellers.
A conclusion is a… just kidding.
There you have a list of common ecommerce terms that everyone in the industry needs to be mindful of.
This list isn’t all-encompassing, so there’s still a lot to learn. We’ll make sure to update it regularly in order to help you improve your ecommerce knowledge.
Garan is a writer interested in how tech reshapes the environment, and how the environment reshapes tech. You'll usually find him inoculating against future shock and arguing with bots.