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Entering the realm of ecommerce can feel like stepping into an alternate universe, rife with its unique dialect and phraseology. In essence, ecommerce, or electronic commerce, encompasses all business activities conducted online - a marketplace without physical boundaries that operates on a digital platform. Ecommerce is not confined solely to buying and selling products over the internet.

It also includes online auctions, internet banking, payment gateways, and online ticketing. This digital commerce phenomenon has greatly transformed how businesses operate today, heralding an era where commercial transactions are predominantly conducted virtually.

The proliferation of Internet connectivity has led to a significant surge in ecommerce activities globally. As we further delve into this article, we will gradually decode the intricacies of this expanding domain known as ecommerce. Here is a glossary of the most commonly used terms.

Common Terminology Used in Ecommerce:

AOV (Average Order Value)
A metric that measures the average amount spent each time a customer places an order on a site. It's calculated by dividing total revenue by the number of orders. Read more about AOV.

API (Application Programming Interface)
A set of rules and protocols for building and interacting with software applications. APIs allow different systems to communicate with each other seamlessly. Read more about API

B2B (Business to Business)
A type of commerce transaction between businesses, such as between a manufacturer and a wholesaler, or a wholesaler and a retailer. Read more about B2B (Business to Business)

B2C (Business to Consumer)
Direct sales between a business and consumers who are the end-users of its products or services. Read more about B2C.

Bounce Rate
The percentage of visitors who navigate away from the site after viewing only one page. A high bounce rate often indicates that the site didn't engage the visitors. Read more about Bounce Rate

Catalog Management
The process of organizing and maintaining a business's product catalog, ensuring product information is accurate and up-to-date for customers. Read more about Catalog Management

The process through which a customer goes to finalize a purchase on an ecommerce site, including providing payment and shipping information. Read more about Checkout

CMS (Content Management System)
A software application used to create, manage, and modify digital content on a website. Common in ecommerce for managing product listings and blog content. Read more about CMS.

The act of converting a website visitor into a paying customer. It's a key measure of success for ecommerce sites. Read more about Conversion

Conversion Rate
The percentage of visitors to your website who complete a desired action, such as making a purchase. It's calculated by dividing conversions by total visitors. Read more about Conversion Rate

CPA (Cost Per Acquisition)
The total cost of acquiring a new customer, including all marketing and advertising expenses. It helps in measuring the effectiveness of marketing efforts. Read more about CPA (Cost Per Acquisition)

CRM (Customer Relationship Management)
A system for managing a company's interactions with current and potential customers. It uses data analysis about customers' history to improve business relationships. Read more about CRM (Customer Relationship Management)

CRO (Conversion Rate Optimization)
The process of enhancing your website and content to boost conversions. It's about making the most of the traffic you already have. Read more about CRO (Conversion Rate Optimization)

CVR (Conversion Rate)
Another term for 'Conversion Rate'... emphasizes the percentage of website visitors who take a desired action like making a purchase. Read more about CVR (Conversion Rate)

Digital Marketing
The promotion of products or services using digital channels to reach consumers. Key aspects include SEO, PPC, social media, and email marketing. Read more about Digital Marketing

DTC (Direct to Consumer)
Selling products directly to consumers, bypassing traditional retailers, wholesalers, or any other middlemen. It offers more control over the brand and customer experience. Read more about DTC (Direct to Consumer)

Buying and selling goods or services using the internet, and the transfer of money and data to execute these transactions. Read more about Ecommerce

EDI (Electronic Data Interchange)
The transfer of data between different companies using networks, such as the internet. It's commonly used for electronic invoices, purchase orders, and other records. Read more about EDI (Electronic Data Interchange)

ERP (Enterprise Resource Planning)
Software that businesses use to manage day-to-day activities like accounting, procurement, project management, risk management, and compliance. Read more about ERP (Enterprise Resource Planning)

The process of receiving, packaging, and shipping orders for goods. In ecommerce, it's crucial for delivering products to customers efficiently. Read more about Fulfillment

GMV (Gross Merchandise Value)
The total sales value of merchandise sold through a particular marketplace over a certain time frame. It's used to measure the health of a marketplace business. Read more about GMV (Gross Merchandise Value)

The total amount of goods a business has available to sell at any given time. Proper inventory management is crucial for meeting customer demand. Read more about Inventory

LTV (Lifetime Value)
The total amount of money a customer is expected to spend in your business during their lifetime. It helps in understanding the long-term value of customers. Read more about LTV (Lifetime Value)

An online platform where multiple vendors can sell their products or services to customers. It's a central hub for buyers and sellers. Read more about Marketplace

The practice of promoting and selling products to customers. In ecommerce, it involves website layout, product display, and promotional tactics. Read more about Merchandising

OMS (Order Management System)
A tool used to track sales, orders, inventory, and fulfillment. It ensures that businesses can manage their orders efficiently from all channels. Read more about OMS (Order Management System)

Payment Gateway
A service that authorizes and processes payments in online and offline transactions. It's essential for securely handling customer payment information. Read more about Payment Gateway

PDP (Product Detail Page)
A page on an ecommerce website that provides detailed information about a specific product. It typically includes images, descriptions, prices, and reviews. Read more about the PDP (Product Detail Page)

Tailoring the shopping experience to the individual customer based on their preferences, behavior, and purchase history. It enhances customer engagement. Read more about Personalization

PIM (Product Information Management)
A system that centralizes and harmonizes all the technical and marketing information of a company's products and catalogs. Read more about PIM (Product Information Management)

PLP (Product Listing Page)
A page on an ecommerce site that lists various products within a category or across categories. It often includes filters and sorting options for ease of search. Read more about PLP (Product Listing Page)

POD (Print on Demand)
A process where new copies of a book (or other product) are not printed until an order has been received, allowing for single or small quantity printing. Read more about POD (Print on Demand)

Product Catalog
A comprehensive list of products a company offers, often displayed on an ecommerce site with details like descriptions, prices, and specifications. Read more about Product Catalog

ROAS (Return on Ad Spend)
A metric that measures the effectiveness of a digital advertising campaign. It's calculated by dividing the revenue generated by the cost of the advertising. Read more about ROAS (Return on Ad Spend)

RPV (Revenue Per Visitor)
A performance metric that calculates the average amount of money generated by each visitor to a website, indicating the value of the website traffic. Read more about RPV (Revenue Per Visitor)

In ecommerce, it refers to the ability of a business to grow without being hampered by its structure or available resources when faced with increased production. Read more about Scaling

SEO (Search Engine Optimization)
The practice of increasing the quantity and quality of traffic to your website through organic search engine results. Read more about SEO (Search Engine Optimization)

SKU (Stock Keeping Unit)
A unique code that identifies each distinct product and service that can be purchased. It helps in tracking inventory for a business. Read more about SKUs (Stock Keeping Unit)

The front end of an ecommerce website that customers interact with. It's designed to allow customers to browse and purchase products. Read more about Storefronts

Supply Chain Management
The oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer to consumer. Read more about Supply Chain Management

Take Rate
The percentage of revenue an ecommerce platform takes from each transaction made between buyers and sellers. It's a key revenue source for marketplace platforms. Read more about Take Rate

The system is used to classify and organize products or content on an ecommerce website. It helps customers find products through categories, tags, and filters. Read more about Taxonomy