Which terms should a beginner learn first?
AOV, conversion rate, CAC, gross margin and contribution margin. They describe whether a store makes money.
Which terms cause the most confusion?
GMV versus revenue, ROAS versus profit, and gross margin versus contribution margin. Each pair sounds alike and differs by a large amount of money.
Where do the short definitions go deeper?
Each group links to the full Kurums guide, and ten terms have their own Decoded page.
Every industry protects itself with vocabulary. E-commerce borrowed terms from retail, logistics, advertising and software and then abbreviated all of them. The result is that a first supplier quote or a first marketing report can read like a telegram: "MOQ 500, FOB Ningbo, 30/70 T/T" or "ROAS 3.2, CAC up, AOV flat".
This is the plain-English index for the Kurums E-Commerce pillar, written in the spirit of Kurums Decoded. Terms with a full Decoded entry are linked; the others point to the guide that uses them.
Which terms describe the business model?
These nine say who is selling to whom and where the stock sits. They are covered in depth in types of e-commerce and dropshipping vs private label vs wholesale vs print-on-demand.
| Term | Plain English |
|---|---|
| B2C | Business to consumer. A company selling to individual shoppers. |
| B2B | Business to business. Companies selling to companies, usually larger orders on invoice. |
| D2C / DTC | Direct to consumer. The brand that makes the product sells it itself, with no retailer in between. |
| C2C | Consumer to consumer. Individuals selling to each other through a platform. |
| Marketplace | A site where many sellers list products and the platform takes a cut. |
| Dropshipping | The store takes the order; a supplier ships it straight to the customer. No stock held. |
| Private label | A manufacturer makes a product that is sold under your brand only. |
| White label | A generic product sold to many brands, each adding its own logo. |
| Print-on-demand | Items printed one at a time after the order arrives. |
Which terms describe money and performance?
These are the numbers on the dashboard. Formulas and benchmarks are in e-commerce metrics that matter; the profit logic is in e-commerce unit economics.
| Term | Plain English |
|---|---|
| GMV | Gross merchandise value. The total value of everything sold through a store or platform. Not revenue for a marketplace. |
| AOV | Average order value. Revenue divided by number of orders. |
| Conversion rate | The share of visits that end in an order. |
| Cart abandonment | Shoppers who add to basket and leave without buying. About seven in ten, on average. |
| CAC | Customer acquisition cost. Marketing spend divided by new customers won. |
| LTV / CLV | Lifetime value. What a customer is worth over the whole relationship, ideally measured in margin. |
| COGS | Cost of goods sold. What the products themselves cost you, including getting them to your shelf. |
| Gross margin | What is left of the selling price after COGS, as a percentage. |
| Contribution margin | What is left after all the costs caused by the order: product, fees, shipping, marketing. |
| Unit economics | The profit and loss of one order or one customer. |
| Churn | The share of customers or subscribers who stop buying in a period. |
| Repeat purchase rate | The share of customers who have ordered more than once. |
Which terms come from marketing?
These appear in advertising reports and agency decks.
| Term | Plain English |
|---|---|
| ROAS | Return on ad spend. Sales attributed to ads divided by the cost of the ads. Revenue, not profit. |
| MER | Marketing efficiency ratio. Total revenue divided by total marketing spend. Harder to flatter than ROAS. |
| CTR and CPM | Click-through rate: clicks per hundred views. CPM: cost per thousand views. |
| CPC | Cost per click. What you pay each time someone clicks an advert. |
| Funnel | The steps from first seeing a product to buying it, with people dropping out at each. |
| Upsell / cross-sell | Selling a better version, or an extra item, to someone already buying. |
| A/B test | Showing two versions to different visitors to see which performs better. |
| UGC | User-generated content. Photos, videos and reviews made by customers or creators, used as marketing. |
| Attribution | Deciding which advert or channel gets the credit for a sale. Every platform claims as much as it can. |
Which terms belong to marketplaces?
Marketplaces have their own rulebook and their own words. See marketplace vs own store vs social commerce and top online marketplaces by country.
| Term | Plain English |
|---|---|
| Take rate | The share of each sale the platform keeps: commission plus fees plus ads. |
| Referral fee | A marketplace's commission, charged as a percentage of the selling price. |
| Buy box / featured offer | The default "add to basket" button on a product page shared by several sellers. Whoever holds it gets most of the sales. |
| 1P and 3P | First-party: the platform buys your goods and sells them itself. Third-party: you sell on the platform under your own account. |
| Listing | A product page on a marketplace. |
| Seller-fulfilled / platform-fulfilled | Whether you ship orders yourself or the marketplace's warehouses do it. |
| Price parity | A rule or expectation that you do not sell cheaper elsewhere than on the platform. |
| Account health | The marketplace's score for your cancellations, late shipments and complaints. Fall below the line and listings are suppressed. |
Which terms cover stock, sourcing and shipping?
These arrive with the first supplier quote. They are explained in how to find wholesale suppliers and China wholesale platforms compared.
| Term | Plain English |
|---|---|
| SKU | Stock keeping unit. A unique code for one exact variant of a product. |
| MOQ | Minimum order quantity. The smallest order a supplier will accept. |
| Lead time | How long from placing an order to the goods being ready or delivered. |
| 3PL | Third-party logistics. A company that stores your stock and ships your orders. |
| Fulfilment | Everything between payment and delivery: picking, packing, shipping. |
| Last mile | The final leg of delivery, from the local depot to the customer's door. Usually the most expensive part. |
| Landed cost | The full cost of one unit on your shelf: product, freight, insurance, duty and handling. |
| Incoterms (EXW, FOB, CIF, DDP) | Standard trade terms that say where the supplier's responsibility ends and who pays freight and duty. |
| OEM / ODM | OEM: a factory makes your design. ODM: a factory sells you its own design under your brand. |
| Inventory turnover | How many times a year you sell through your stock. |
| Dead stock | Products that are not selling and are tying up cash. |
| Reverse logistics | The return journey: collecting, checking and restocking or disposing of returned goods. |
Which terms concern payments, tax and the checkout?
The least glamorous group and the one that decides whether money actually arrives. See the e-commerce tech stack and market metrics to check before entering a country.
| Term | Plain English |
|---|---|
| Payment gateway | The service that takes the customer's card or wallet details and gets the payment approved. |
| Payment processor / PSP | The company that moves the money from the customer's bank to yours. Often the same firm as the gateway. |
| Chargeback | A customer disputes a card payment with their bank and the money is pulled back from you, plus a fee. |
| BNPL | Buy now, pay later. The shopper pays in instalments; the provider pays you up front for a fee. |
| COD | Cash on delivery. The customer pays the courier. Common in some regions; refusals are costly. |
| PCI DSS | The card industry's security standard. Hosted checkouts handle most of it for you. |
| VAT / GST / sales tax | Consumption taxes charged on sales, by the rules of the customer's location. |
| OSS and IOSS | EU schemes that let you report VAT for all member states through one registration. |
| De minimis | The value below which imported parcels escape duty. Ended in the US in 2025 and replaced in the EU by a flat €3 duty in July 2026. |
| Merchant of record | The legal seller on a transaction: the party responsible for tax, refunds and compliance. |
Which terms are most often confused with each other?
Five pairs cause most of the expensive misunderstandings, because the words sound interchangeable and the sums behind them are not.
- GMV and revenue. GMV is what customers spent. Revenue is what the company keeps. For a store selling its own stock they are close; for a marketplace revenue may be a tenth of GMV.
- Gross margin and contribution margin. Gross margin removes only the product cost. Contribution margin also removes fees, shipping and marketing. Decisions about advertising budgets belong to the second.
- ROAS and profit. A return of three on ad spend is three units of sales, out of which the product, the parcel and the fees still have to be paid.
- Markup and margin. Buying at 50 and selling at 100 is a 100% markup and a 50% margin. Suppliers often talk in markup; accountants talk in margin.
- Dropshipping and marketplace selling. The first is about where the stock sits. The second is about where the customer finds you. You can do either, both or neither.
When a number is quoted to you, repeating it back with its definition ("so that is 15% of the selling price including shipping?") costs ten seconds and prevents most of these.
How should you use this glossary?
As a filter. When a term appears in a quote, a report or a contract, find it here, read the linked guide if money depends on it, and ask the other party what they include in the number. Most misunderstandings in e-commerce are two people using the same abbreviation for different sums.
Three habits help:
- Ask what a percentage is a percentage of. Conversion of sessions or of users? Margin on revenue including tax or excluding it?
- Ask what a price includes. Freight, duty, tax, payment fees, returns?
- Ask for the period. Monthly churn and annual churn are different worlds.
New e-commerce terms are added to Kurums Decoded regularly, each with a short definition, where you will hear it and a comparison that makes it stick.
Frequently asked questions
What does GMV mean in e-commerce?
Gross merchandise value: the total value of goods sold through a store or platform in a period, before fees, returns and costs. For a marketplace it is much larger than revenue, because most of the money belongs to the sellers.
What is the difference between a SKU and a barcode?
A SKU is an internal code each business creates for its own stock tracking. A barcode number such as a GTIN, EAN or UPC is a global identifier that is the same wherever the product is sold.
What does FOB mean on a supplier quote?
Free On Board. The supplier's price covers the goods and getting them loaded on the ship at the origin port. Sea freight, insurance, import duty and delivery from the destination port are the buyer's cost.
What is the difference between ROAS and ROI?
ROAS compares revenue with advertising spend only. ROI compares profit with the total investment. A campaign can have a high ROAS and a negative ROI if margins are thin.
Keep reading in the E-Commerce pillar
- Baymard Institute — cart abandonment rate statistics
- International Chamber of Commerce — Incoterms rules
- Avalara — EU to end €150 customs duty exemption
Prices, fees and market figures were checked in November 2026 and change often; confirm on the provider’s own page before you commit. Kurums has no paid relationship with the companies named here.
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