Ecommerce Glossary: A Breakdown of Common Industry Terminology

We’ve all been there. One minute you’re having a totally normal conversation regarding all the latest details of your new ecommerce business venture, and the next, the conversation takes a drastic turn into deciphering complex and tricky ecommerce terminology. What’s an ecommerce business owner to do?

Don’t worry! Although the fast-evolving world of online ecommerce may be overwhelming at first, many business owners learn the dialogue on the job. Despite this, it’s important that those stepping into the ecommerce sphere are well-versed in the lingo that comes up in everyday conversation.

That’s why we’ve created the “Ecommerce Glossary: A Breakdown of Common Industry Terminology,” a brief introduction to the ecommerce terminology you may need when jumping into the business.

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General Ecommerce Terms:

Business to Business (B2B):

• The process of selling services or products to another business, which typically then sells to the consumer.

Business to Consumer (B2C):

• The process of selling services or products directly from the business to the consumer.

Buffer Stock:

• An excess amount of materials kept on hand to guard against any unplanned inventory shortages.

Carrying Costs:

• The costs associated with having specific quantities or pieces of inventory that are used in cost-based lot sizing calculations such as economic order quantity (EOQ). Typically includes the cost of the inventory investment and the costs associated with storing the inventory.

Critical Stock:

• An amount of a product that must be maintained in inventory to respond to expressed needs.

Cross Docking:

• The practice of moving products directly from the receiving area to the shipping area for distribution rather than being stored for a period of time. Cross docking requires close synchronization of all inbound and outbound shipment movements. By eliminating the put-away, storage, and selection operations, cross docking can significantly reduce distribution costs.

Custom Packaging:

• Packaging specifically tailored to your company’s branding and the product your company is developing and shipping. This can include - but is not limited to - modifying the package’s shape, size, style, colors, material, varnish and more. Check out our blog here to learn more about the benefits of custom packaging.

Drop Shipping:

• The process of moving goods from the manufacturer directly to the retailer without going through the usual distribution channels.

Fulfillment Partner (3PL - Third Party Logistics Service):

• An organization that operates on behalf of a business to receive delivery of stock from their suppliers, store inventory, and fulfill customer orders. Often called fulfillment services provider, fulfillment house, fulfillment company, or 3PL (like yours truly)!

GTIN (Global Tracking Identification Number):

• Globally-unique identification number, used for all products. Used for uniquely identifying the items sold, delivered, warehoused and billed throughout retail and commercial distribution channels. This allows for greater accuracy in tracking.

Holding Cost:

• The expense associated with holding an item in stock for a specified unit time.

Inbound Logistics:

• The management of materials from suppliers and vendors into production processes or storage facilities.

Market-Positioned Warehouse:

• Warehouse facilities positioned to replenish customer inventory assortments and afford maximum inbound transport consolidation economies from inventory origin points with relatively short-haul local delivery.

Omni-Channel Fulfillment:

• Warehouse accepts and fulfills orders through multiple channels, including but not limited to enterprise resource planning (ERP), shopping cart integrations, manual orders, etc.

Outbound Logistics:

• The process related to the movement and storage of products from the end of the production line to the end user.

Overhead:

• Indirect costs associated with facilities and management that are applied to the costs of manufactured goods through the manufacturing reporting process.

Packing List:

• A document containing information about the warehouse location of each product ID in each order. Allows the person picking the order to quickly find the item he or she is looking for without a broad search of all packages. A packing list also confirms the actual shipment of goods on a line item basis.

Pick and Pack:

• The operations involved in pulling products from storage to complete an order and then preparing the container for shipment.

Reorder Level:

• Stock level at which it is time to place another order for product (generally the lead time demand plus safety stock minus any stock on order).

Rewarehousing:

• Process of moving items to different storage locations to improve handling efficiency.

Stock-Keeping Unit (SKU):

• Category of unit with a unique combination of form, fit, and function.

Warehouse Management System (WMS):

• Software solution that keeps track of all warehouse operations including receiving, put-away, picking, shipping, and inventory. Includes support of radio frequency communications, allowing real-time data transfer between the system and warehouse personnel. A good WMS will maximize space and minimize material handling by automating put-away processes.

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Your Saltbox Glossary:

Here at Saltbox, we simplify the ecommerce process, helping small businesses grow and scale their company fluidly and effectively. We’ve created our own ecommerce developments to guarantee we’re meeting each of our customer’s needs as they improve and expand their business. Always offering new and improved technologies that other 3PL services have not yet mastered, Saltbox was created to give your business the space and support to grow.

These Saltbox services include:

Co-Warehousing:

• Bringing the concept of co-working to your startup. Merging the financial flexibility of self-storage with the logistics capabilities of traditional warehousing. Offers communal amenities and a modern office with warehousing solutions for varying businesses.

Eforce:

• Your on-demand personalized team for picking, packing, custom packaging and more. This team is on hand to offer fulfillment solutions at the click of a button.

Flex Storage:

• At Saltbox, we understand that your storage needs may change week to week and month to month. With our flex storage option, you only pay for the storage you need and are using each day, with non-permanent storage space and fees to match.

Kitting:

• A set of complementary items that customers can order as a single unit. Inventory management technique that helps companies increase revenue, reduce costs and improve customer satisfaction.

Micro-Fulfillment Center:

• A MFC is a small fulfillment center that serves ecommerce businesses and helps improve delivery times. This space can be automated and close to consumers to improve delivery and shipping times.

With transparent pricing, solution packages curated to your unique needs, and a team dedicated to learning the ins and outs of your business, Saltbox is the logistics support small businesses leverage to get going, grow, and thrive. What are you waiting for? Schedule a tour at your local Saltbox today and get started.

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About Saltbox:

At Saltbox, we want to grow your small business with you. Offering the key fulfillment services all businesses require across a wide variety of locations, Saltbox benefits your growing business by focusing on those personal needs that many 3PL services overlook.

Saltbox offers hands-on care when it comes to logistic solutions and fulfillment, letting owners take the lead on running their business and improving their marketing while we handle everything else. You don’t have to expand your business alone. Get started with Saltbox Fulfillment and let’s grow your business together.