Owning and running an eCommerce business has so many moving parts, it sometimes feels like you’re speaking another language! From the marketing terminology to fulfillment knowledge, there are thousands of words that go into building your own online company.
To make things a bit easier, we’ve come up with an alphabetical Amazon Terminology Cheat Sheet. We’ve included the most used words and acronyms you’ll come across as home goods or lifestyle eCommerce seller on the Amazon Marketplace.
Affiliate: An affiliate is a separate party who promotes the products or services of another for a commission. For example, you may partner with a blogger who will post affiliate links to your Amazon products. This will drive traffic to your storefront, and in return, you pay out a commission on each sale that comes through that affiliate link.
Best Sellers Rank (BSR): BSR shows those items that are highly ranked or optimized according to their category, inventory, and reviews. This demonstrates how a seller stands up against the competition.
Buy Box: The Buy Box is the box with the product details, shipping information, and purchasing process found on the right-hand side of a product listing. Because Amazon has multiple sellers offering the same product, the highest, most optimized stores will “win” this Buy Box. Appearing in this Buy Box can drastically boost traffic and sales to your storefront. Learn more Buy Box secrets and tips here!
Categories: Amazon categories place your listings in groupings, similar to an aisle or shelf of a grocery store. This helps customers easily search what they are looking for. There are 20 “open” categories and several other categories that require Amazon approval. Categories requiring approval are reserved for Professional Sellers with specific permissions, and they have a higher standard to reach. Look here for a list of available categories and requirements.
Conversion Rate: In order to optimize your storefront on Amazon, you need a top-tier conversion rate. This rate is the percentage of prospects that go to your page and then convert into customers by purchasing your product. If you have a high conversion rate, Amazon sees your store as a desirable product and will thus place you higher in searches and rankings. If you have a low conversion rate, you want to consider tweaking your listings to attract more buying customers.
Dropship: Dropshipping is an arrangement where the manufacturer or distributor ships directly to your customers, often in their branded packaging. This means that the seller never holds or touches the stock, but they may pay a premium for this with certain manufacturers.
Fulfillment: Fulfillment is defined as the process of receiving goods from a supplier, packaging and branding those goods, and then shipping them to consumers. The seller can do fulfillment directly or it can be done through a third-party, similar to dropshipping.
Fulfillment By Amazon (FBA): Amazon will work as a separate entity that picks, packs, and ships your merchandise through Fulfillment By Amazon. Amazon stores your products for you at their own fulfillment centers, and then they handle all of the fulfillment processes. This can include multi-channel fulfillment, where your other online storefronts, like your own personal website, can also be fulfilled by Amazon. This streamlines the inventory and logistics process. Although this is an additional fee, FBA is incredibly useful for listing optimization, as Amazon prefers to use their own fulfillment centers to ensure customer quality and satisfaction.
Fulfillment by Merchant (FBM or MFN): FBM is when the merchant or seller is entirely responsible for fulfillment as well as customer support and service.
Inventory: The inventory is the stock you currently hold in your business. Think of it as the number of units sitting in your warehouse today. You need to regularly check inventory levels to ensure you are only promoting items you have in stock.
Listings: Your listings are your Amazon product pages available to consumers. The “listing” includes a description, the condition of an item, price, shipping methods, quantity, SKU, and any additional discounts or offers from your site. (Your listing is similar to the tag on a garment that gives all of the information about a shirt, so you can decide whether or not you would like to buy it.) These listings need to be optimized in accordance with Amazon to rank highly and convert customers.
Logistics: Logistics is the overall fulfillment process of moving the stock in and out of a building. Larger companies have logistics managers who oversee this stock operation. Basically, you need to properly manage your logistics in order to turn what you buy from suppliers into what you sell to consumers.
Margin: The margin, or profit margin, is the profit percentage of a sale taken after the cost of goods and expenses have been deducted. A minimized supply chain often leads to higher profit margins, which is essential to boosting the success of a company.
Pay Per Click (PPC): Pay per click is a form of advertising where you pay only based on the number of shoppers who click on your ads. When your ad is performing well, you pay more; if your ad doesn’t perform, you don’t pay. This is a low-risk way to do advertising if you are looking to boost your storefront. Amazon offers easy-to-use metric systems to help you figure out what ads are and aren’t working in order to maximize sales and conversion rates.
Prime: Amazon Prime is a membership offer for consumers that enables them to have special shipping and delivery options (as well as video, music, and entertainment selections through Amazon). Prime customers are also eligible for special discounts, early-bird specials, and more. Prime members are considered the “top-list” consumers of Amazon Prime, so it is important to win them over for great, quality reviews.
Private Labeling: Private labeling is a business model that means you create and sell your own product under your own label. It could also mean a private label supplier, such as HomeRev, who functions as a support system and supplier to their registered sellers.
Seller Central (SC): The SC is your main dashboard when you log in. Amazon refers to the seller central often in its terms, conditions, and instructions.
Today’s Deals: “Today’s Deals” is a tab on Amazon that allows consumers to see highlighted deals and discounts all on one dashboard. These are also called “Lightning Deals.” We will discuss the Today’s Deals at more length in an upcoming article.
Traffic: Traffic is the level or amount of visitors that come to your store or product listings through multiple avenues. Ideally, with the proper conversion, the more traffic you have, the more sales you have.
Verified Review: These are reviews that are left after an authentic purchase has been made from Amazon. Amazon does not verify views if it does not have a history of that consumer buying that product being reviewed. More verified reviews mean better optimization and happier customers.
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