Dropshipping 101: Basic Dropshipping Terms And Concepts
Updated: Apr 4
Whether you have a dropshipping business, or you are starting to write blog articles for dropshipping business, you might find it challenging with all the wording. Here are the basic terms and concepts that you need to know about dropshipping.
In this post, we gave you an A-Z list of Dropshipping and ecommerce glossary of terms.
Dropshipping 101 List
A
A/B Test: A simple procedure that compares two versions of a webpage to discover which strategy is more effective. You display Version A and Version B to groups of potential clients at the same time to see which method results in a greater conversion rate. Many items can be A/B tested, such as an online store, a product, or a newsletter.
Accessibility: Websites, tools, and technology are created and developed to be accessible to individuals with impairments.
Application Programming Interface (API): This code allows two softwares to communicate with each other, they have access to each other’s system. APIs let you open up access to your resources while maintaining security and control. These are “a simplified way to connect your own infrastructure through cloud-native app development, but they also allow you to share your data with customers and other external users.”
Address Verification Service (AVS): An address verification service is a service provided by large credit card processors that allow businesses to confirm ownership of a debit or credit card that customers use.
Action: It is a call to action, make people have the intention to e.g. purchase.
Abandoned Cart: It is a term for the situation when a potential customer adds a product to their shopping cart in your online store but instead of actually purchasing and completing the order, they leave the site.
Abandoned Cart Recovery: If a customer abandons their cart, you can automatically send reminders to them. For this, you can use for example applications that manage this process for you, sending an email or another kind of notification to the customer. It reminds them to complete their order, and you can get more income.
ATC rate: ATC rate refers to the add-to-cart rate and shows the percentage of customers that add products to the shopping cart.
Analytics: Analytics refers to reviewing data to infer patterns of significance, especially when it comes to user behavior. Typically, analytics are used to determine consumers’ purchasing habits and how they engage with a retailer’s website. With analytic data, you can implement changes that might lead to increased sales and revenue.
AIDA:It is a marketing model within the class known as hierarchy of effects models or hierarchical models, all of which imply that consumers move through a series of steps or stages when they make purchase decisions. These models are linear, sequential models built on an assumption that consumers move through a series of cognitive (thinking) and affective (feeling) stages culminating in a behavioural (doing e.g. purchase or trial) stage. An English acronym consisting of the following words: Attention, Interest, Desire, Action.
Attribution model: The rule, or collection of rules, that defines how credit for sales and conversions is distributed to touchpoints in conversion paths is known as an attribution model. Customers may interact with many adverts from the same advertiser on the route to conversion. You may specify how much credit each ad interaction receives for your conversions using attribution models. The most common attribution models are the Last interaction model, Last non-direct click model, Last AdWords click model, First interaction model, Linear model, Time decay model, Position-based model, etc.
Affiliate: Affiliates are site owners or publishers that recommend a retailer or merchant to their audiences. The idea is for the affiliate to help increase revenue for the retailer by forwarding qualified leads and traffic. The affiliate, in turn, gets a percentage of revenue for every sale.
Affiliate Marketing: This is when a person earns money by promoting someone else's product. It is a performance-based marketing method. The online store owner sends products to an influencer, an online publisher — who creates content on Instagram, YouTube, TikTok, Facebook, or a blog. The influencer publishes posts of the product, and they get paid for doing this. There are more methods on what way they work together and agree on providing something in return for the promotion. The influencer can either get a recurring commission of a certain percentage by referring new buyers to a service, or they can get a fixed amount payment; just to mention a few. Another example can be, an external website leads a consumer to your online store and the consumer visits your website and makes a purchase, the external website then earns a commission for sending traffic to your site.
Affiliate Link: Affiliate links are URLs with a unique identification number affixed to the end that provide a way to quantify an affiliate’s performance. Retailers provide affiliate links to affiliates that can share them on social media and in content marketing on blogs. Since the identification number attached to the URL is associated with a specific affiliate, you can track how much traffic the affiliate is forwarding through the link.
Average Order Value (AOV): The average sum of all orders placed with an eCommerce store within a certain period. The formula for calculating AOV is revenue divided by the number of orders.
Average Transaction Value (ATV): The average dollar amount spent by a consumer in a single transaction with your dropshipping business.
Average Selling Price (ASP): The average selling price (ASP) is the normal price at which a product is sold. The average selling price (ASP) is easily calculated by dividing the total revenue collected by the total number of units sold. The average selling price (ASP) indicates how much money a face cream manufacturer receives for each face cream sold. Typically, the average selling price is stated during quarterly financial reports.
Authorization: Authorizations are one of the steps for processing payments. Before a payment is processed and the order is submitted, an authorization allows the system to determine whether the account has the funds available to complete the order.
Authorized Distributor: Authorized distributors are companies and businesses that have been designated or approved by the product manufacturer to sell the product in quantity to commercial retailers.
Authorized Retailer: Authorized retailers are merchants that have been designated or authorized by the product manufacturer to sell the product directly to consumers.
Alibaba: Alibaba is the largest online marketplace in China and by some accounts, the entire world. It consists of hundreds of millions of users who buy from millions of retailers and merchants across three websites. Alibaba processes more transactions for online purchases than any other ecommerce site, so a growing number of retailers are listing their products on Alibaba in an effort to target Asian consumers.
AliExpress: AliExpress is a popular online marketplace owned by Alibaba that is more international in focus. In fact, AliExpress has at one time or another, been the most visited website in Brazil and Russia which is an indication of its international appeal. Compared to Alibaba, AliExpress has become an ideal marketplace for small businesses to list their products for global audiences.
Amazon: Amazon is a U.S. online marketplace and mega-retailer with a growing international presence that has allowed it to become the largest online retailer in the world in terms of revenue and market capitalization. Today, around half of Amazon’s sales are driven by third-party retailers that list their products on the Amazon Marketplace. Amazon is also growing rapidly in the software-as-a-service and infrastructure-as-a-service industries.
B
Backorder: A situation where customers can order and pay for goods that are temporarily out of stock, and they will receive the goods when they are back in stock.
Basket Building: Basket building is an eCommerce marketing approach that encourages shoppers and customers to fill their online shopping carts with more things. There are several techniques that dropshipping businesses use to build the basket (shopping cart), like offering discounts, product bundling, creating a loyalty program, displaying related products, etc.
Black Friday: It is an online shopping holiday that comes from the US but has already grown to be popular worldwide. Retail stores offer significant discounts on this day. It’s usually the day after Thanksgiving.
Blog: Blog is a section, menu on a website where the owner of the website can share their own articles they write. If the writer took care of the SEO of the article, the page will rank higher on Google searches. Writing articles and sharing them is way of promoting a product and helping customers understand how that product works.
Bottom-line: Bottom-line is also known as net income. Net income (Bottom-line) = Revenue- Expensses. It is an indicator of whether the business makes profits or losses. When revenues exceed costs, a profit is made. When expenses exceed revenue, there is a loss.
Bounce Rate: The percentage of visitors that navigate around the website without visiting additional web pages is referred to as the bounce rate. The bounce rate is specifically used in web traffic analysis since it evaluates a website’s success in attracting people to continue their trip on the website.
Branding: It’s about creating a unique brand so that people can recognize it anytime. Branding involves the name, logo, message, specific design elements that you use when advertising. It has to attract people and make them loyal. This is something that makes you be different than the others on the market. It gives a unique vibe to your business.
Brand Building: Strengthening brand image and customer loyalty is especially important in Dropshipping business.
Brick and Mortar: It is a physical shop with products in stock on the shelves, where people can go and buy the retailers’ products in person.
Business to Business (B2B): Transactions that occur between businesses, such as a manufacturer and a wholesaler or retailer.
Business to Consumer (B2C): Transactions that occur between businesses and individual consumers, not companies.
Bulk: Bulk means a large quantity. When the retailer manages product data in a large quantity, or they stock physical inventory of products in a large quantity, they do it in bulk, often at a discount.
Bundling: Offering several products for sale as one combined product. This is usually done at a lower price than if the customer bought all of them separately.
Bundle pricing is a great strategy to lower a product’s retail price.
Buying persona: A buyer persona is a comprehensive description of someone who reflects your target audience. This character is fictitious, but it is based on detailed research of your current or desired audience.
C
Cash On Delivery (COD): A type of transaction where the recipient makes the payment for a product at the time of delivery.
Call to Action (CTA): A prompt on a website that tells the user to take some specified action, such as ‘Buy Now’ or ‘Sign Up.’ Such phrases trigger an immediate reaction or encourage customers to make a purchase.
Cart Abandonment Rate: Cart abandonment rate is an online shopping indicator that compares the percentage of potential consumers who leave a site without fulfilling their purchase to the total number of shopping carts created.
Content Delivery Network (CDN): A network of servers distributed geographically to provide fast delivery of Internet content like websites, videos, and images.
Chargeback: A return of funds to a consumer, when a customer disputes a transaction.
Checkout Process: The steps a customer goes through when purchasing a product online, including entering shipping information and making payment.
Click-Through Rate(CTR): It “is the percentage of individuals viewing a web page who click on a specific advertisement that appears on the page. Click-through rate measures how successful an ad has been in capturing users’ interest. The higher the click-through rate, the more successful the ad has been in generating interest.” –
Closed-Loop Marketing: Closed-loop marketing is an efficient strategy used by businesses for analytics and gaining deeper insights into marketing efforts that result in ROI. This strategy entails collecting client data from different sources, like websites, blogs, SEO, email, etc., interpreting the data, and applying the results to produce relevant content for specific groups of customers.
Content Management System (CMS): A software that helps users create, manage, and modify content on a website without needing specialized technical knowledge.
Conversion (rate): Conversion rate is the percentage of visitors that take the desired action. Conversion rate can be increased if your website provides great website usability, by providing easy navigation, and fast loading pages.
Conversion rate = the number of conversions / the number of total ad interactions ( in a certain period)
Conversion path: Conversion Path is a method for transforming an anonymous internet visitor into a committed lead. The normal conversion path begins with a user landing on a landing page, continues through some page changes, and ends with either a purchase or a canceled session.
Conversion Rate Optimization (CRO): Conversion Rate Optimization (CRO) is a marketing attempt to increase conversions by enhancing the content, layout, and design of a website, landing pages, and paid search advertisements.
Cost of Goods Sold (COGS):The total cost to make the products that a company sells. This includes things like the cost of materials and the cost of labor.
Compare at Price: This is what appears in your shop as an older, higher price when you would like to offer a discount for the customers. They can compare the old price with the new, discounted price and decide accordingly.
Cost Per Click(CPC): The amount you pay each time a user clicks on your online advertisement.
Cost Per Acquisition (CPA): The total cost of a specific marketing campaign divided by the number of customers acquired through that campaign.
Cost Per Thousand (CPM): The cost an advertiser pays for one thousand views or clicks of an advertisement.
Cross-Selling: Cross-selling is when the retailer offers a related product to the customer based on what they are interested in or already placed in their cart. Like this, you can grow your income.
CSS: It is the abbreviation for Cascading Style Sheets. CSS used by web designers to create, describe and style the look of the website. It provides layout and visual formatting of HTML pages.
Comma Separated Values (CSV): A simple file format used to store tabular data, such as a spreadsheet or database, where commas are used to separate the values.
Customer/Consumer: Customer is who browse your products in your store with the intention of buying goods from you.
Customer crunch: Customer crunch refers to the loss of a customer. The loss occurs when a customer decides to stop buying or using your services.
Customer Acquisition Cost (CAC): Customer acquisition cost is the expense of obtaining a new customer.
Customer acquisition cost = sales and marketing expenses/number of new customers
Customer Relationship Management (CRM): A company’s methods, strategies, and technology for managing and organizing interactions with new and existing customers across the customer lifecycle are Customer Relationship Management.
Cyber Monday: This is the Monday after Black Friday. The retailer provides tempting discounts to customers and uses promotions to encourage people to buy online.
D
Datafeed File: In the context of running an online store, it is a datafile that contains all data of the products you wish to have in your online store. It can be an always updating file, via for example a URL, so your products can stay always up-to-date. It’s easy to manage product data in bulk with this file.
Delivery Confirmation: Delivery confirmations occur when shippers are notified of delivery. This is a service offered by many package carriers like FedEx and USPS. However, delivery confirmation isn’t the same as when a recipient signs for delivery.
Direct to Garment (DTG): A printing technique where a digital printer is used to print images directly onto garments.
Direct Import: The act of purchasing goods directly from a producer in a foreign country. It eliminates the need for an intermediary to import items for sale, as well as the reliance on local suppliers.
Discount Code/Coupon Code: This is a code – numbers or letters – that online stores offer to potential customers so that if they order products from the online store, they can get a discount or another product as a gift. They have to type this code in a certain field at the checkout.
Distributor: Distributors are businesses that maintain inventories of products from a number of manufacturers and sell those products to a number of different retailers. Typically, distributors offer shorter windows for shipping orders to customers than the manufacturers of those products.
Domain Name: A domain name is a unique name that is part of the network address that identifies a company or other entity on the Internet. A domain name may be found in the address bar of a web browser while visiting a website.
Domain Name System (DNS): The system on the internet that translates domain names into IP addresses.
Dropshipping: It is an online trading/retail fulfillment method. The retailer doesn’t have a real inventory of the products they have in their online store. No upfront investment in stock needed. When retailers use the standard way of dropshipping, the supplier sends the product directly to the customer. When a customer makes a purchase, the store purchases the item from a third party and has it shipped directly to the customer.
E
eBay: eBay is a popular online marketplace that facilitates consumer-to-consumer and business-to-consumer purchases. Though traditionally associated with online auctions, eBay allows items to be listed with set prices which gives retailers the chance to extend their reach by creating eBay listings for the products they offer. This has become a popular practice for both small businesses and larger companies.
Ecommerce: eCommerce refers to all the transactions that occur online, using the internet. Or, more specifically, buying and selling products and services online, using the Internet is eCommerce.
Ecommerce Platform: An ecommerce platform is a software application that allows online commerce businesses to create and manage their online store. It provides tools to run sales, marketing, order fulfillment, and other relevant processes.
Ecommerce Resources: Best eCommerce Resources for aspiring entrepreneurs in terms of templates, guides, checklists and swipe files.
Electronic Invoice: An electronic invoice or “e-invoice” refers to an invoice that is created, transferred, and received electronically.
Electronic Funds Transfer at Point of Sale (EFTPOS): EFTPOS is an electronic payment system in which electronic money is transmitted via payment cards (debit or credit) at payment terminals positioned at points of sale.
Email marketing: Email marketing is the use of email to advertise a product or service to customers. It’s a low-cost marketing strategy for establishing relationships with potential consumers and driving repeat transactions over time.
Engagement Rate: The Engagement Rate is a statistic that measures how much a visitor engages with a certain piece of content or ad. It displays a proportion of visitors that came to the site, saw the ad or content, and interacted with it.
Enterprise Resource Planning (ERP): ERP system is a company’s system that integrates business process management software programs for tracking customer and business activities. Accounting and financial procedures, customer relationship management, supply chain operations, procurement, risk management and compliance, manufacturing, internal communication, and even project management may all be managed using an ERP.
Event-Triggered Email: Event-triggered email is a type of automated email that is delivered to a list of subscribers when a certain event happens.
F
Facebook Ad: In a nutshell we can say that companies can create Facebook advertisements for money. These are post images, banners people can click on. It directs them to the advertiser’s website. This content appears on the Facebook News Feed on the desktop or mobile, and in the right side of the feed page on desktops.
Filtering: The process of narrowing down a list of items based on certain criteria. Users can list and search products by setting up specific filters, like, color, size, price, free shipping, etc. This is called filtering.
Freemium model: The Freemium model is a business model in which a business provides basic or restricted functionality to users for free and then charges a premium for extra or advanced features. Nowadays, various eCommerce businesses, like, online PDF, Flickr, Avast, Evernote, etc., that provide services, use this type of business model.
Front-end: The front-end is the visual side of a website or the graphical user interface.
Fulfillment: When a customer places an order in your online store, it has to be executed by making the product ready for delivey to the customer. It might involve warehouse pickup, packaging labeling, and other.
G
General Data Protection Regulation (GDPR): A regulation in EU law on data protection and privacy for all individual citizens of the European Union and the European Economic Area.
Google Ad: It is Google’s advertising service. Businesses have to pay a certain amount of money so that their promotions will be shown on the top of the Google search results if someone looks for a relating topic.
Google Analytics: Google Analytics is a free online analytics tool supplied by Google that allows you to connect your website to measure web traffic and gives information that is important for SEO and marketing.
Google Trends: A tool provided by Google that shows how often a particular search term is entered relative to the total search volume across various regions of the world and in various languages.
Gross Profit: The gross profit is defined as total revenue minus the cost of products sold (COGS). It is expressed as an absolute amount in the domestic currency and indicates profit before operating costs.
Gross profit = Revenue – COGS
Growth hacking: Growth hacking is a marketing concept that includes quick experiments, analytical thinking, and the use of social data to determine the most successful approach to expand a company and acquire visibility. The Growth hackers are marketers, engineers, product managers, etc.
H
Hashtag: It is a phrase or a label with a hash character (#) upfront, that is used in social media and microblogging services to mark certain topic messages. When consumers use hashtags, the message associated with them is visible. Examples of a hashtag: #dropshipping, #ecommerce. You can also see it in a post here.
Hover link: Hover Link is a straightforward extension that lets you see and copy short URL and standard URL links on webpages.
HTML: HTML is an abbreviation for Hypertext Markup Language, which is a document description and formatting language used to construct World Wide Web pages. It makes styling texts easier. It’s created for displaying, styling web pages or web applications, for example.
Hypertext Transfer Protocol Secure (HTTPS): HTTPS, or Hypertext Transfer Protocol Secure, is an authentication protocol for websites and servers that protects against’ man-in-the-middle’ attacks, allowing users to believe that a particular website or asset authentically represents itself through its web address.
I
Inbound Link: An inbound link is a link that points to your website from a third-party website. Backlinks are another word for it in SEO.
Inbound Marketing: Inbound marketing is a strategy that employs content marketing, social media marketing, and SEO to attract new leads while also building trust and reputation for eCommerce businesses. Inbound marketing is an example might be Blog articles, videos, web design, email campaigns
Infographics: Infographics, also known as information graphics, are graphical representations of information, data, or expertise that are meant to provide content in an easy and understanding style. These are commonly used because they can send messages fast or simplify the display of enormous volumes of data.
Intelligent Product Recommendation Systems: These systems, also known as recommender systems, are information filtering systems to predict consumers’ preferences for certain items.
Inventory: Inventory is a term used to refer to the amount, quantity, or value of products that a retailer currently has available. It does not account for products that have been ordered from suppliers; inventory accounts only for what is physically on hand and could be shipped at any given time.
Inventory Management: How a company keeps track of all the goods it has. It involves knowing when to re-order products, how much to order, and how to store products.
J
Joint Business Plan: A Joint Business Plan (JBP) is a collaborative effort between a retailer and a supplier to analyze their performance and develop a plan for developing their business jointly over a specific period.
K
Keyword: A word or phrase that people type into search engines. Websites will try to use these keywords in their content to show up in search results.
Keyword Stuffing: Keyword stuffing is an SEO practice that involves stuffing as many terms as possible into a webpage, sometimes without context, to alter a site’s search engine rating.
Key Performance Indicator (KPI): A measurable value that demonstrates how effectively a company is achieving key business objectives. KPIs are classified into two types: high-level KPIs that focus on overall company performance and low-level KPIs that examine operations in departments such as sales, marketing, etc.
Know Your Customer (KYC): This is the activity that a company must do before conducting business with a customer to verify their identification.
L
Landing Page: These are the pages where people land after clicking on a link. It can be the main page of your site or any other single page. These exist to make sure that visitors will take the desired step, for example to buy a certain product or to subscribe to the company’s newsletter.
Lead: A lead is a marketing term that refers to a prospective consumer or business that displays interest in a company’s product or service. A lead is also known ad prospect.
Lead Nurturing: Lead nurturing is the practice of establishing and developing a strong relationship with customers at all phases of the sales funnel.
Lifetime Value (LTV): The prediction of the net profit attributed to the entire future relationship with a customer.
Listing Fees: Listing fees are costs associated with listing products or services on third-party online marketplaces. An example of such an online marketplace is eBay, which usually charges a fee for listing.
Logistics: Logistics refers to the management of products as they progress from origination to destination. In the world of ecommerce, logistics often encompasses the different phases of transport that occur between a product’s manufacturing and its delivery to the customer, including transport from the manufacturer to the supplier, transport from the supplier to the retailer, and transport from the retailer to the consumer.
Logistics Management:The management of the flow of goods, services, and information between the point of origin and the point of consumption.
Long Tail: The long tail is a retail marketing name that refers to the practice of selling large quantities of goods to fewer buyers as opposed to selling a limited number of products to numerous people. It is a shift from a popular industry to a market with millions of niches.
Long Tail Keyword: A long-tail keyword is more precise and typically larger in length than more regularly searched phrases. These keywords are usually three or five words long.
M
Margin: It shows the difference between the price the supplier offers their products to retailers, and the price the retailer sells that product at. Retailers’ profits are dependent on the margins they have on their products. Margins represent how much of what consumers pay is actually profit for the retailer. Retailers can increase their margins by either negotiating a lower rate from suppliers or increasing the purchase price for consumers.
Marketing: Marketing refers to a company’s actions that include advertising, selling, and delivering items to clients. It is a method of creating, retaining, and satisfying customers by engaging with them, meeting their needs, and exchanging valuable items.
Marketing automation: Marketing automation is the use of software to automate marketing operations to effectively advertise products and services through various online platforms and to automate repetitive activities.
Market Segmentation: Dividing the market into distinct segments based on different customer needs, habits, etc.
Marketing Strategies: A series of activities to attract and retain customers, including social media marketing, content marketing, online advertising, etc.
Manufacturer: Manufacturers are the businesses or companies that produce products for the purposes of selling to consumers.
Manufacturer's Suggested Retail Price (MSRP): Manufacturer’s suggested retail price, or MSRP, is the price at which a product’s manufacturer recommends selling the product to consumers.
Merchant: A person or company involved in wholesaling, especially one dealing with foreign countries or supplying goods to a particular trade.
Meta Description: A brief summary of a webpage that shows up in search engine results. It helps people decide whether to click on your site. A website’s meta description tag appears as part of the search summary on a search engine results page (SERP) and is meant to give users an idea of the material on the page and how it relates to their search query.
Middle of the Funnel: The middle of the Funnel is a stage in which marketers generate and distribute information that is relevant to the requirements of a buyer to engage them with their brand. It is also called a Sales Funnel or a Buying Funnel. There are three stages that marketers go through:
● Marketing the specific products
● Measuring the leads’ desire to buy
● Heading the right leads’ to make the purchase.
Minimum Advertised Price(MAP): When ecommerce retailers agree to a minimum advertised price (MAP) for a product, they agree not to advertise that product at a price lower than the MAP. Manufacturers may require adherence to a minimum advertised price as a condition of selling their products. It creates a balance between value and marketability.
Minimum Order Quantity (MOQ): The smallest quantity of a product that a supplier is willing to sell.
Mobile Marketing: Mobile marketing is a type of marketing that promotes personalized products or services to a consumer using mobile devices such as smartphones, tablets, PDAs, etc.
Mobile commerce (mCommerce): Mobile commerce or mCommerce is the use of wireless portable devices for online purchasing and sales. Mobile phones, smartphones, tablets, and personal digital assistants are examples of wireless electronic gadgets (PDAs).
Monthly Recurring Revenue (MRR): Monthly Recurring Revenue – is a revenue/income that a firm is obligated to receive every month continuously. It is also called Predictable Revenue.
Multi-Channel Ecommerce: The concept of employing more than one sales channel to contact customers and sell more products to spread your reliance on a single online store is known as multi-channel eCommerce.
N
Native Advertising: Native advertising is a sort of internet advertising in which online material is developed for paid promotion of a brand on a media site but resembles journalistic content from the magazine. Here, traditional commercial forms such as banner advertising are not used, rather editorial material such as blogs or infographics are included.
Net Profit: Net profit refers to the difference between the amount of money generated through sales and the retailer’s total costs, which can include not only the cost of goods sold, but things like payroll, operating expenses, and marketing. Net profit reflects the amount of revenue that’s left over after all the necessary expenses have been paid.
Net Terms: Net terms refer to an agreement between supplier and retailer. It allows the retailer to pay the supplier for the products a predetermined amount of time after those products have been shipped to consumers. An example of net terms is “net 30,” which indicates the retailer has until 30 days after shipping to a consumer to remit payment for the product to the supplier. There can be discounts involved, too. For instance, “10/5 net 30” means the retailer would receive a discount of ten percent if payment is made in the first five days, but the discount would be forfeited is payment is made between day six and day 30.
Net Promoter Score (NPS): The Net Promoter Score (NPS) assesses the likelihood of customers recommending a product or service.
News Feed: A freshly released piece of content on a site’s news feed showcases information such as the most recent changes, forthcoming events, and more. Facebook, LinkedIn, and Twitter all have customized news feeds.
Niche: It is a distinct, small but profitable market segment. You can use it in many fields in life, but in e-commerce it mostly refers to a specific segment of products, product types. It suits certain needs and satisfies people.
No-Follow Link: Nofollow links are links with the rel=”nofollow” HTML element. The Nofollow tag instructs search engines to discard that link. Because Nofollow links do not convey PageRank, they are unlikely to affect search engine rankings.
O
Off-Page Optimization: Off-page SEO refers to any operations performed away from the website to decide where you rank on search engine results pages (SERPs).
Some of the Off-page SEO examples are commenting, brand mentions, forums, influencer marketing, guest author, broken link building, social networking, etc.
Omnichannel: Omnichannel is a completely integrated approach to commerce that offers customers a consistent shopping experience across online and offline channels.
Omnichannel Retailing: “Consider this as the next generation of cross-channel and multi-channel retail. Omni-channel means establishing a presence on several channels and platforms (i.e. brick-and-mortar, mobile, online, catalog etc.) and enabling customers to transact, interact, and engage across these channels simultaneously or even interchangeably. Giving the customer the convenience and flexibility to purchase an item using your shopping app, and then letting them pick up the merchandise in your store, plus allowing them to process a return via your website.”
On-Page Optimization: On-page SEO refers to any actions that may be done directly inside the site to optimize its position in search engine results. Examples of On-page Optimization are website content, image optimization, headlines and headers title tags, alt tags, meta descriptions, structured data, etc.
On-premises: On-premises software is a form of software delivery strategy in which software is installed and run on a customer’s server and computing infrastructure.
Order Fulfillment: The complete process from point of sales inquiry to delivery of a product to the customer. Receiving products, short-term storage at a distribution center warehouse, order processing (picking and packaging), shipping, and logistics are all part of the order fulfillment process.
Order Management: The process of receiving, handling, and tracking customer orders.
Order Management System: A system that tracks sales, orders, inventory, and fulfillment to streamline the ordering and delivery process.
Organic Search: Organic search refers to search engine results that are not paid. Organic search is the natural search in the search engine. It usually follows after the Ads section in the search engine, and you can recognize it because they do not consist of the Ad sign.
Open-rate: This is a percentage that refers to the number of people who opened the email you sent them. To get this percentage, you have to divide the number of emails opened by the total number of the messages sent.
Outsource: Outsourcing is a business technique in which a corporation contracts a third party to execute work, conduct operations, or offer services on its behalf.
Overhead: Overhead is a catch-all term for expenses associated with operating a business that doesn’t include things like labor, direct materials, and direct expenses. Expenses that are part of the overhead can be things like advertising costs, interest accrued on loans, rent, utilities, repairs, maintenance, insurance, taxes, and legal fees.
P
Payment Gateway: “A payment gateway refers to the front-end technology that reads payment cards and sends customer information to the merchant acquiring bank for processing.” When you have an online store, you will have to decide which payment gateway you will work with to process payments.
Payment Processor: A payment processor is a system that allows financial transactions to be handled by a retailer using multiple channels such as credit cards, debit cards, or bank accounts.
Payment Card Industry Data Security Standard (PCI): PCI DSS Compliance is a set of rules and regulations defined to reduce credit card fraud.
Payment Service Provider (PSP): A payment service provider (PSP) is a third-party corporation that offers payment services to merchants who accept online payments. Credit cards, debit cards, e-wallets, cash cards, bank transfers, and other ways may be used.
Pay-Per-Click (PPC): Pay-per-click advertising is a strategy for purchasing site visits to boost traffic. Advertisers pay for ad placement. Search engine marketing, often known as search engine optimization, is a popular method of PPC advertising.
It is critical to use keywords that are ranking high to increase search traffic and attract more consumers to click on the ad. PPC is also known as Cost-Per-Click (CPC).
PayPal: PayPal is an online payment system that facilitates online purchases as well as money transfers. Though originally associated with eBay, PayPal has become ubiquitous and as such, is supported by many digital storefronts.
Point-of-Sale (POS): The point-of-sale is the place where a cardholder ( the customer) and a merchant ( the seller) execute a transaction. A Point-Of-Sale (POS) terminal is a computerized cash register that can record and monitor client orders, handle credit and debit cards, link to other network systems, and manage inventory.
Pop up: A type of ad that appears suddenly in a new window on top of the content you're viewing on a webpage.
Preferred Supplier: Preferred suppliers are businesses and companies from whom a retailer prefers to source products. A preferred supplier arrangement usually occurs when special rates have been negotiated — which, in turn, means better margins for the retailer — or when there’s a long-term partnership between the supplier and retailer. As such, preferred suppliers are advantageous to both the retailer and the supplier.
Profit Margin: The difference between the selling price and the cost, a key indicator of a retailer's profitability.
Print on Demand (POD): A process where a custom-designed product, like a t-shirt or mug, is only manufactured once an order has been made. This means there's no need to print and store lots of products in advance.
Private Label: When the manufacturer offers merchants the opportunity of not using the manufacturer’s name on the products, we call it a private label. Others can sell the products under their brand name.
Product ID: It is an ID that helps identify products. Each product has a unique product ID. It is a made of letters and numbers. Product ID also collects the variants to one product in a group. This is the same for all variants of a product.
Purchase Flow: A purchase flow is the buy flow, which depicts a series of processes and activities that a customer performs to complete a purchase.
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QR Code: QR code stands for ‘quick response code.’ It’s a black-and-white square sign that may be scanned with a smartphone or laser to learn more about a product or service.
Qualified Lead: A qualified lead is a potential customer, who meets certain predefined criteria of the company’s needs.
Quarterly Recurring Revenue (QRR): Quarterly Recurring Revenue (QRR) is a measure used to determine how much money consumers spend quarterly on product or service subscriptions.
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Really Simple Syndication (RSS): A web feed that allows users to access updates to online content in a standardized, computer-readable format.
Recurring Billing: Recurring billing is a payment method that enables company owners to charge their consumers for the products or services they purchase at predetermined intervals (weekly, monthly, yearly, or on customized intervals).
Recurring Revenue: The part of a company’s revenue that is projected to continue in the future is known as recurring revenue.
Recurring Transaction: A recurrent transaction is one in which the cardholder ( the customer) is charged a certain amount of money for an active subscription, membership or recurring delivery of things.
Reddit: Reddit is a community network where people may explore their interests, hobbies, and passions. There’s a lot of information spread about trends, businesses, etc., which can help new dropshipper in sales predictions.
Renewal: Renewals are manual or automatic steps that a consumer takes to renew their subscription by placing a renewal order.
Reseller: Resellers are businesses that purchase products or services for the purpose of resale rather than for consumption. With ecommerce now ubiquitous, affiliate marketers are becoming resellers sometimes, too, as this promotes rebranded products or services.
Retailer: Retailers are companies and businesses that sell directly to the end user or consumer.
Restocking Fee: Restocking fees are either a flat fee or a percentage of the purchase price that is charged to customers when they return the products they’ve purchased. It’s common practice for restocking fees to be deducted from the customer’s refund.
Responsive Design: Responsive design or more specifically Responsive web design refers to creating web pages that appear well on all devices. A responsive site design will adapt to multiple screen sizes automatically, such as different web browsers, mobile devices, etc.
Return Policy: Since the goods are shipped directly by third-party suppliers, the retailer must ensure a clear return policy to handle customer returns.
Return On Investment (ROI): Return on investment (ROI) is a performance metric used to assess an investment’s efficiency or to compare the efficiency of many investments, calculated by dividing net profit by the cost of the investment.
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Search Engine Optimization (SEO): It is a term used in marketing. It is the process of improving a website to increase its visibility in search engine results. The goal is to attract more traffic from people searching online.
Search Engine Results Page (SERP): A SERP is a web page that displays a list of results when visitors search for anything online using keywords. The search engine returns the results page in response to the keyword query. To produce the best match, search engines analyze the query and the site to display relevant phrases.
Secure Sockets Layer (SSL): A protocol for establishing authenticated and encrypted links between networked computers. It's typically used to secure communications between web browsers and servers.
Service Level Agreement (SLA): SLA describes the service level you demand from a provider, establishing the metrics that assess service and the penalties or solutions required to agree on service levels that are not fulfilled.
Shipping: The process of transporting goods from a source location to a predefined destination.
Shopping Cart: An online shopping cart is software that allows users to pick items and purchase them online.
Shopping Cart Integration: Shopping cart integration entails integrating all of the software you use, like warehouse management systems, accounting software, tracking software, and so on. This enables each component of your supply chain to access data from your shopping cart to execute orders more quickly and efficiently.
Sitemap: A Sitemap is a file in which you offer information about the pages, videos, and other items on your site, as well as their relationships. There are two types of sitemaps: XML and HTML. XML sitemap that guides search engine bots, for them to identify and index a site’s URLs. HTML sitemap guides website visitors through the content that a website provides.
Soft Decline: A soft decline happens when the issuing bank confirms the payment but the transaction fails at a later stage. If you receive a soft decline on a renewal, reattempting the card at a later date may work.
Software-as-a-Service (SaaS): Software as a service (SaaS) is a software distribution mechanism that allows users to remotely access software and its functionality via a Web-based service. Common Examples are cloud-based apps like email, calendaring, and office tools, such as Microsoft Office 365, etc.
Sponsored Merchant: A merchant who signs into an agreement with a payment service provider to get payment services.
Stock Keeping Unit (SKU): A unique identifier for each distinct product and service that can be purchased.
Stripe: Stripe is an online payments system similar to PayPal. PayPal is more consumer-facing, whereas Stripe is geared toward businesses and professionals as a means of allowing them to accept payments for their products and services.
Supplier: A supplier is who offers products to retailers at wholesale/retail prices. The supplier is not necessarily the manufacturer of the products it offers. They sell in B2B.
Supply Chain: Supply chains refer to a network of businesses or companies involved in moving a product from its point of origin to the consumer. For ecommerce, this usually equates to the manufacturer and distributor of a product.
Supply Chain Management: Supply chain management includes all processes starting from transforming raw materials into final products. The main five processes of SCM are Plan, Source, Make, Deliver, and Return.
Subscription: A subscription is a pre-paid contract to receive products or services for a certain period.
Subscription Billing: Subscription billing is the automatic, recurring charging procedure that takes place once a client registers for a service.
Subscription Box: A subscription box is a type of product kitting in which buyers get various things on a recurrent basis. Users can subscribe to get a box of items from a category that they use regularly, such as skin care products, pet food, and so on.
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Target Marketing: “Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments consisting of the customers whose needs and desires most closely match your product or service offerings. It can be the key to attracting new business, increasing your sales, and making your business a success.”
Third-Party Payment Processor: A third-party payment processor is a company that allows you to accept payments from consumers online without first opening your merchant account with a bank. An example of a Third-Party Payment Processor is PayPal.
Third-Party Seller (3P): A third-party vendor (3P) sells directly to consumers through Amazon as a marketplace. Unless the order is eligible for Amazon Prime, third-party merchants handle customer assistance for orders sent straight from them.
Third-Party Logistics (3PL): Companies that provide services to handle logistics operations like warehousing, transportation, and order fulfillment for another company.
Tiered Pricing: Tiered pricing is a subscription-based service in which users pay only for the services, features, or quantities that they require by selecting one of several “tiers.
Transaction: The transaction is the moment of buying or selling something online.
Tracking Number: When a customer orders a product, a unique tracking number will be generated for the order that will help the customer, the store and the delivery company to identify the package when they are in the proces of being shipped out.
Top of the Funnel: The Top of the Funnel refers to the very first step in the purchasing process, or it is any touchpoint that initiates a consumer interaction with the business.
Touchpoint: A touchpoint is any interaction a consumer has with a business, whether in person, through a website, app, etc.
Turnkey: A turnkey product or service is created, supplied, produced, installed finished, and ready to use.
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Unique Selling Proposition (USP): It is a feature of a product or service that makes it unique, different than other similar ones on the market. It's the reason why customers should choose your product over others.
Underwriting: Underwriting is a method that professionals use to assess, analyze, and identify risks that may arise while doing business with other eCommerce companies, or individuals.
Upselling: Up-selling is a sales tactic in which a consumer is encouraged to buy something more or more expensive while making a transaction.
User-Generated Content (UGC): Any form of content, such as images, videos, text, and audio, that has been posted by users on online platforms like social media.
Usage Billing: Usage billing allows consumers to be charged a fixed recurring amount for their subscriptions beginning with the original purchase and continuing as part of the renewal process, as well as overage fees for the metered resources they utilize each billing cycle.
User Interface (UI): The user interface (UI) of a device is the point of human-computer contact and communication. Display screens, keyboards, and desktop appearance are all examples of UI.
User Experience (UX): User experience is how a user, a visitor of a site interacts with the website and what they experience. When companies design a website and create the structure of it, they keep customers in the main focus so their user experience on the site would be good. It’s important for everything to be straightforwards, easy-to-use, and easy-to-find.
User Management: User management refers to the administrators’ capacity to manage and control user access to different IT resources such as systems, devices, apps, etc.
Usability: The quality of a user’s experience when interacting with items or systems, such as websites, software, devices, or apps, is referred to as Usability.
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Value-Based Pricing: Value-based pricing is a pricing approach that sets prices mainly on a consumer’s perceived value of a product or service.
Value Metric: A value metric is a method of measuring the exchange of value in your goods.
Value Proposition: A value proposition is a brief statement that explains why a customer would select your product or service above others.
Value-Added Tax (VAT): It is a general consumption tax assessed on the value added to a product or service. It is charged on almost every product and service when sellers add value to them. Customers pay the VAT that is mostly a percentage of the price of the product.
Variant: If the product is available in more sizes, colors, materials etc, it means the product has more versions, more variants.
Viral Content: Viral content is defined as anything that spreads quickly online through website links and social sharing, such as an article, a picture, or a video.
Virtual Reality (VR): Virtual reality is a software-created artificial environment that is presented to the user in such a way that the user suspends belief and accepts it as a genuine environment.
Void: Voiding is a transaction that cancels an uncompleted purchase.
Voice Shopping: Voice shopping, also known as voice commerce, is the ability to make online purchases using only your voice and a suitable smart device, such as your phone, tablet, or smart speaker.
Voluntary Churn: When a customer decides to terminate the relationship and stops using a product or service, changes from a paid version, or switches to a lower-priced version.
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Warehouse: Warehouse storage referred to storing products or goods before moving them to another location.
Website: A website is a collection of web pages and related content recognized by a common domain name and hosted on at least one web server.
Web Analytics: The measurement and analysis of data to generate knowledge of user behavior across websites is known as web analytics.
Web Cookie: Cookies are text files that include small amounts of data, such as a login and password, and are used to identify your device when you connect to a network. HTTP cookies are used to identify users and to improve your online search experience.
Website Uptime: The length of time that a website was accessible to people who wanted to access a website or web server is referred to as website uptime or website availability. The availability of a website is a critical component of a digital business, which is why businesses should constantly employ monitoring tools to know how and when their website or application is working.
White Label: Products produced by one company that other companies rebrand to make them appear as if they made them.
Wholesale: Wholesale refers to purchasing items in larger quantities from a producer at a lower cost and reselling them to a retailer at a higher cost.
Wholesaler: A person or company that sells goods in large quantities at low prices, typically to retailers.
Wholesale Distributor: A wholesale distributor or a wholesaler purchases large quantities of items directly from manufacturers and resells them to retailers and online merchants.
Wholesale Price: The price that businesses charge when selling to other businesses, typically in large quantities.
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X-Channel Management: X-Channel Management is the process through which a company attempts to develop successful marketing and sales tactics to increase consumer engagement.
XML Sitemap: An XML sitemap is a file that specifies the main pages of a website. XML sitemap that guides search engine bots, for them to identify and index a site’s URLs.
Thank you for reading this post, and hope you enjoy sourcing with ZQdropshipping.
If you encounter any problems, please feel free to contact our customer service.
Whatsapp/Phone number: +86 188 8483 1329
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