Glossary
E-Commerce Fundamentals
AOV (Average Order Value) — The average amount a customer spends per transaction. Calculated by dividing total revenue by number of orders.
CAC (Customer Acquisition Cost) — The total cost to acquire one new customer, including all marketing and advertising expenses.
Cart abandonment — When a customer adds items to their cart but leaves without completing the purchase. Average rate is approximately 70%.
Conversion rate — The percentage of store visitors who complete a purchase. E-commerce average is 2–3%.
Drop shipping — A fulfillment model where the seller doesn't hold inventory. Orders are forwarded to a supplier who ships directly to the customer.
E-commerce — Buying and selling products or services over the internet.
Fulfillment — The entire process of receiving, processing, and delivering orders to customers.
LTV / CLV (Customer Lifetime Value) — The total revenue a customer generates over their entire relationship with your business.
Margin — The difference between selling price and cost, expressed as a percentage. Gross margin includes product cost only; net margin includes all business expenses.
MOQ (Minimum Order Quantity) — The smallest number of units a supplier will sell in a single order.
SKU (Stock Keeping Unit) — A unique identifier for each product variant (size, color, style) used for inventory tracking.
Business Models
Amazon FBA (Fulfillment by Amazon) — A service where Amazon stores, packs, and ships your products from their warehouses. Products become Prime-eligible.
Digital products — Non-physical goods sold and delivered electronically: ebooks, courses, templates, software, music, art files.
Handmade — Products created by the seller, typically sold on platforms like Etsy or through a personal store.
Print-on-demand (POD) — A model where products (t-shirts, mugs, posters) are printed individually when ordered, with no upfront inventory.
Private label — Products manufactured by a third party but sold under your own brand name with custom packaging and branding.
Wholesale — Buying products in bulk at reduced prices from manufacturers or distributors and reselling at retail markup.
Marketing
A/B testing — Comparing two versions of a page, ad, or email to determine which performs better.
CPC (Cost Per Click) — The amount you pay each time someone clicks your ad.
CPM (Cost Per Mille) — The cost per 1,000 ad impressions.
Influencer marketing — Partnering with social media influencers to promote your products to their audience.
Organic traffic — Visitors who find your store through unpaid channels: search engines, social media posts, and direct visits.
Paid traffic — Visitors who arrive through paid advertising: Google Ads, Meta Ads, TikTok Ads.
Retargeting — Showing ads to people who have previously visited your store or interacted with your content.
ROAS (Return on Ad Spend) — Revenue generated per dollar spent on advertising. ROAS of 4x means $4 revenue for every $1 spent.
SEO (Search Engine Optimization) — Optimizing your store and product pages to rank higher in search engine results.
UGC (User-Generated Content) — Photos, videos, and reviews created by customers featuring your products.
Platforms
BigCommerce — An e-commerce platform for larger catalogs with built-in features.
Etsy — A marketplace focused on handmade, vintage, and unique items.
Gumroad — A platform for selling digital products directly to consumers.
Shopify — The leading independent e-commerce platform for building branded online stores.
WooCommerce — An open-source e-commerce plugin for WordPress websites.
Operations
3PL (Third-Party Logistics) — A company that handles warehousing, picking, packing, and shipping on behalf of a seller.
Chargeback — A forced reversal of a credit card payment initiated by the customer's bank. Can result from fraud or disputes.
Inventory management — Tracking stock levels, reorder points, and product movement to ensure products are available without overstocking.
Payment gateway — The service that processes credit card and digital payments (Shopify Payments, Stripe, PayPal).
SSL certificate — Encryption that secures your store and protects customer payment information. Required for all e-commerce sites.
Product Listings
Alt text — Descriptive text for images used for accessibility and search engine optimization.
Backend keywords — Hidden search terms added to product listings on marketplaces like Amazon and Etsy that help products appear in relevant searches.
Bullet points — Concise feature highlights on a product listing, typically 5–7 points covering key benefits and specifications.
Meta description — A brief summary of a page's content shown in search engine results.
Product description — The written content on a product page that explains what the product is, who it's for, and why someone should buy it.