Comprehensive List of Terms every online store owner should know


Every business has its own dialect to say so. Even if the "universal language" of the internet is English and most of us can speak it, there are terms specific to every field of activity that you might not have heard of. Ecommerce is no different, so on your first steps towards starting your online business you might come across terms like: Bounce rate, Conversion rate, Cart abandonment rate and so on.

In this article you will find those terms that are most frequently used in the world of online commerce and their meaning.

  • Ecommerce - A simple term used to describe the act of selling products or services online. Comes from Electronic Commerce. Probably the first word you come across when thinking of an online shop.
  • Conversion rate - The term every store owner cares more about than any other. Conversion is the act of encouraging a customer into taking some action thus turning him into a paying customer. The act of converting a visitor into a customer to be plain. It is a percentage of paying customers out of the total number of customers. A higher conversion rate mean more sales and more profits. So keep an eye out on how to increase it.
  • Conversion funnel - This is a Google Analytics metric that details the events that your customers follow to conversion. It’s called a funnel because a percentage of visitors leave your website at each event along the journey; at conversion, there are fewer potential customers than there were at the start.
  • Bottom of the funnel - Bottom of the Funnel is referred to as a Transaction phase or Purchase stage of the online buying process. At this stage the visitor has done all the research and is about to make a purchase, thus leading ahead to become a ‘New Customer’. Bottom of the Funnel if preceded by the ‘Top of the Funnel‘ which means product/service comparison stage and the ‘Middle of the Funnel‘ which means validation stage.
  • Cart abandonment rate - Simply the number of abandoned carts out of the total number of carts created. This is a number you most likely like to be as low as possible. People abandon their carts for multiple reasons: High shipping rate, some other product not in stock, found a product cheaper elsewhere, or they simply changed their mind.
  • Call to action - These are words or phrases incorporated in a message or sales script that induces a viewer, reader or listener to take immediate action. Typical CTAs used in marketing and advertising are ‘Buy Now‘, ‘Call Now‘, ‘Click Here‘ etc. Such words prompts an immediate response or encourage visitors to make a purchase. CTAs have greatly proved its impact on the conversion rates.
  • Cross-selling - The act of offering a product that relates to, completes, or enhances the product that the customer has added to cart. It is an efficient method of selling accessories especially.
  • Dropshipping - When an online store works with wholesale suppliers for the delivery of products by passing them shipping information about each customer order.
  • Email marketing - The act of promoting your products or business through emails
  • Fulfillment - The receipt, processing, packaging, and shipping of orders made through your online store.
  • Margin/Profit margin - The difference between the sum the retailer pays for a product and the sum for which he sells the product.
  • Upselling - This term reffers to the act of offering a more expensive product, similar with the one chosen by the customer but more expensive and/or better features. A good method of selling those expensive products that no one touches
  • Affiliate marketing - A marketing strategy in which your ecommerce business partners with online publishers so that they will promote and endorse your products and send customers to your website. Typically, the affiliate receives a fee for every website visitor or sale generated from the promotion.
  • Average order value - Represents the typical amount of money your customers spend on your shop. Total sales revenue/number of orders = average order value
  • Average time on site - Average Time on Site is mostly seen in web analytics report which refers to the amount of time the visitor has spent on the webpage they visited while browsing. This is the time measured in minutes or seconds and can be misleading in the analytics report sometimes, because it does not calculate the actual reading time of the visitor on the webpage.
  • Bounce rate - Another analytical term that reflects the percentage of visitors that leave your website after viewing only a single page
  • Bundling - Product bundling is the act of grouping together two or more related products, often with a discount, in order to increase conversions

Above are the terms that usually pop up when working online. There are loads of terms used in the world of commerce, but most of them are the same for standard and online. Anyone can tell what a barcode is or what inventory means.

The list of terms will be periodically updated with the latest trending terms. Every day you learn something new.

Now that you have this list you are just a bit better prepared to tackle the world of ecommerce, and talk easier with freelancers, influencers, bloggers that may help you on your journey to profit.


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