By Bogdan Rancea
Running an online store is hard enough. Then you get hit with jargon like “CLTV”, “3PL”, or “conversion rate”, and suddenly it feels like you need a marketing degree just to read your Shopify dashboard.
This glossary is here to cut through the noise.
No fluff. No jargon. Just straight-up definitions of the ecommerce terms you actually need to understand if you want to grow your store, make more money, and stop guessing what your ads guy is talking about.
Whether you’re just starting out or scaling past 7-figures, this is the cheat sheet you’ll keep coming back to.
Let’s get into it.
A
A/B Testing
A/B testing in ecommerce is when you test two versions of something — like a product page or ad — to see which performs better. You only change one element between the two versions, like a headline or image. Each version gets shown to a different group of visitors, and you track results like conversions or clicks to see which one wins.
Abandoned Cart
An abandoned cart is when a customer adds products to their shopping cart but doesn’t check out. It’s one of the biggest leaks in an ecommerce store. To win back these potential customers, you can send automated follow-up emails or offer a small discount to get them to finish the order.
Acquisition Cost
Acquisition cost is how much you spend to get one new customer. This includes ad spend, influencer fees, email tools — everything it takes to get someone to buy from you for the first time. If your acquisition cost is higher than your profit, you’re burning cash.
AOV (Average Order Value)
AOV stands for average order value, and it tells you how much a customer usually spends each time they buy. You calculate it by taking your total revenue and dividing it by the number of orders. The higher your AOV, the more money you make without needing extra traffic.
Affiliate Marketing
Affiliate marketing is when other people promote your store or products, and they get paid a commission for every sale they bring in. You give them a unique link or code, they share it, and if someone buys, they earn a cut. It’s a win-win if done right — low risk, high reward.
Attribution
Attribution is figuring out what made someone buy. Was it the Instagram ad, the email, the influencer post? You want to know which channels are working so you can double down. The problem is, people see your brand in a bunch of places, so giving credit to just one source isn’t always accurate.
API
An API (Application Programming Interface) is the tech that lets your ecommerce store talk to other software. Like syncing your orders with your shipping software or connecting your site to an email platform. APIs save you time by automating tasks behind the scenes.
B
B2B
B2B stands for business-to-business. It means you’re selling your products or services to other businesses instead of regular shoppers. Think wholesale, suppliers, or bulk software sales. The buying process is usually longer and involves more people, but the orders are often bigger.
B2C
B2C means business-to-consumer. That’s your classic ecommerce store selling directly to shoppers online. Everything from clothing brands to tech gadgets falls under B2C. The buying cycle is faster, and success depends on how well you grab attention and convert traffic.
Bounce Rate
Bounce rate is the percentage of people who visit a page on your store and leave without doing anything — no clicks, no scroll, no add-to-cart. A high bounce rate usually means your page isn’t grabbing people fast enough or you’re sending the wrong traffic.
Bundling
Bundling is when you group two or more products together and sell them as a package. It’s a solid way to increase your AOV and clear out slow-moving inventory. Think “Buy 2, Get 1 Free” or “Starter Kits”.
Buy Box (Amazon)
The Buy Box is the section on an Amazon product page where customers can click “Add to Cart.” Only one seller gets it at a time, and it drives most of the sales. Winning it means better pricing, fast shipping, and a strong seller record.
Buyer Persona
A buyer persona is a made-up profile of your ideal customer. It includes their age, job, pain points, and buying behaviour. If you don’t know who you’re selling to, your messaging will miss the mark.
C
CAC (Customer Acquisition Cost)
CAC tells you how much it costs to get a new customer. You take your total marketing and sales spend and divide it by the number of new customers. If your CAC is too high, you’re losing money even when you’re making sales.
Cart Abandonment
Cart abandonment is when someone adds items to their cart but never checks out. It’s one of the most frustrating — and fixable — parts of ecommerce. A solid email or SMS flow can win a big chunk of those sales back.
Click-Through Rate (CTR)
CTR is the percentage of people who click on your link after seeing it. Could be from an ad, an email, or a product page. Low CTR? Your headline, creative, or offer probably needs work.
Conversion Rate
Conversion rate is the percentage of visitors who take the action you want — usually a sale. It’s the single most important metric for ecommerce sites. Small lifts here = big jumps in revenue.
CRM (Customer Relationship Management)
A CRM is software that keeps track of your customers and how they interact with your store. It helps you segment your audience, track customer journeys, and send better emails. Think of it as your sales brain.
CRO (Conversion Rate Optimization)
CRO is about testing and improving your site to get more people to buy. It’s tweaking headlines, images, layout, CTAs — anything that might get more users to click “Buy Now.”
Cross-Selling
Cross-selling is when you suggest related or complementary products to what the customer is already buying. Think “You might also like” or “Buy this with it.” It’s a smart way to boost your average order value.
Customer Lifetime Value (CLTV or LTV)
CLTV is how much money the average customer spends with you over their entire time as a buyer. If you’re not increasing LTV, you’re constantly relying on new customers — which is expensive.
D
D2C (Direct-to-Consumer)
D2C means selling your products straight to the customer, no middlemen. You own the customer relationship, the data, the profit — and the headaches. It’s harder to grow but way more profitable if you get it right.
Dashboard
A dashboard is your ecommerce command centre. It shows you key stats like revenue, orders, traffic, and ad spend in one spot. If you’re not looking at your dashboard daily, you’re flying blind.
Dropshipping
Dropshipping is when you sell products without holding inventory. A customer places an order on your site, you buy it from a supplier, and they ship it directly. You pocket the difference. It’s cheap to start but competitive and margin-tight.
Dynamic Pricing
Dynamic pricing means your product price can change based on things like demand, location, or competitor prices. Think airline tickets or Uber surge pricing — it’s a way to squeeze out extra revenue.
Discount Funnel
A discount funnel is a sales strategy where customers move through a series of offers, each with a slightly better discount or bonus. It’s designed to get hesitant shoppers to buy now instead of later.
E
Ecommerce Platform
An ecommerce platform is the software that runs your online store. Shopify, WooCommerce, BigCommerce — all are platforms. It handles your product pages, checkout, inventory, and more.
Email Marketing
Email marketing is using emails to sell your products or stay in touch with customers. It’s one of the highest ROI channels. You can send promotions, welcome series, cart recovery emails, and more.
Exit Intent
Exit intent tech detects when someone’s about to leave your site — then triggers a popup with a discount or offer. It’s one last shot to keep the visitor engaged or capture their email.
ERP (Enterprise Resource Planning)
ERP software helps big ecommerce businesses manage everything — from orders to finances to stock — in one system. It’s a beast, but it can save serious time and reduce human error when scaled.
Evergreen Offer
An evergreen offer is a promotion that runs all the time. It’s not tied to a holiday or event. Think free shipping, a 10% welcome discount, or a subscription offer that’s always available.
F
Fulfilment
Fulfilment is the behind-the-scenes process of packing and shipping orders to customers. You can do it in-house, through a 3PL (third-party logistics), or via dropshipping. Mess it up and your reviews will tank.
Free Shipping Threshold
This is the minimum amount a customer has to spend to get free shipping. Setting one can boost your AOV. Like: “Spend £50+ and get free shipping.” Works like magic if the threshold is just above your average order.
Funnel
A funnel is the path your customer takes — from seeing an ad to buying a product. There’s usually steps like click, view product, add to cart, and purchase. The goal is to plug the leaks and keep more people moving forward.
First-Party Data
First-party data is info you collect directly from your customers — like emails, purchase history, and on-site behaviour. It’s gold. Unlike third-party data, you own it and it’s GDPR-safe.
Flash Sale
A flash sale is a limited-time offer — usually with a countdown — to drive urgency and quick sales. It works great for moving slow stock or creating hype, but don’t overuse it or people will stop caring.
G
Gross Profit
Gross profit is your revenue minus the cost of goods sold. It tells you how much money you actually make from selling your products, before you count things like ads, software, or rent. If this number sucks, you’re building a business on sand.
Google Analytics
Google Analytics tracks what people do on your site — where they came from, what pages they visit, and where they drop off. It’s the free tool almost every ecommerce store uses to figure out what’s working and what’s not.
GA4 (Google Analytics 4)
GA4 is the new version of Google Analytics. It tracks users across websites and apps, focuses more on events than sessions, and is built for a world without third-party cookies. If you haven’t switched to it yet, you’re missing data.
Google Shopping Ads
These are the product boxes you see at the top of Google when you search for something to buy. They pull info from your product feed and show your image, price, and brand. If you’re running a store, they should be part of your ad stack.
Growth Marketing
Growth marketing is like performance marketing on steroids. It’s not just about running ads — it’s about testing, tracking, and optimising everything to grow fast. That includes email flows, landing pages, pricing, upsells, and more.
H
Heatmaps
Heatmaps show you where people click, scroll, and hover on your site. They’re a visual way to see what grabs attention — and what doesn’t. Tools like Hotjar and Crazy Egg make it easy to spy on real user behaviour.
Headless Commerce
Headless means your store’s front-end (what customers see) is separated from the back-end (where your data lives). It gives you more flexibility in design and performance. Not for beginners — but powerful if you want full control.
Hero Image
The hero image is the big banner at the top of your homepage or landing page. It’s the first thing people see, so it needs to hit hard. A weak hero section can kill your conversions before the page even loads.
High Ticket Ecommerce
This is when you sell expensive products — usually £500+. Could be mattresses, electronics, or premium fitness gear. Fewer sales, bigger profits. But it comes with longer buying cycles and higher expectations.
Homepage Conversion Rate
This is the percentage of people who land on your homepage and end up buying. Most homepages suck at converting. The key? Clear value, fast load times, and a path straight to your top products.
I
Inventory Management
Inventory management is how you keep track of what’s in stock, what’s running low, and what needs reordering. Get it wrong, and you’ll either oversell (bad customer experience) or miss sales (lost revenue).
Influencer Marketing
This is when someone with an audience promotes your product — usually for a fee or commission. It’s powerful when done right but easy to waste money on if you don’t vet them or track performance.
Impression
An impression is when your ad, product, or page is shown to someone. Doesn’t mean they clicked — just that it appeared. You’ll get loads of impressions, but clicks and conversions are what actually matter.
Integrations
Integrations are how your tools talk to each other. Like syncing Klaviyo with Shopify, or your reviews app with Google Shopping. The more connected your stack is, the less manual work you’ll need to do.
Inbound Marketing
Inbound marketing means getting people to come to you — usually through SEO, content, or organic social — instead of you chasing them with ads. It’s slower but more sustainable and cheaper long-term.
J
Just-In-Time Inventory
This is a method where you only restock products when you need them, not ahead of time. It saves storage costs but leaves zero room for error. If suppliers mess up, you’re out of stock fast.
JIT Fulfilment
JIT fulfilment is similar — you don’t prepare shipments until an order is placed. Great for low inventory risk, but risky if your warehouse or supplier can’t move fast enough to meet customer expectations.
K
KPI (Key Performance Indicator)
A KPI is a metric that tells you how well you’re doing. Could be conversion rate, AOV, ROAS, anything tied to performance. If you’re not tracking the right KPIs, you’re making decisions in the dark.
Keyword Cannibalisation
This happens when multiple pages on your store compete for the same keyword in Google. Instead of helping you rank, they hurt each other. One product page = one keyword focus.
Klaviyo
Klaviyo is the go-to email platform for ecommerce. Powerful automations, solid integrations with Shopify, and great for abandoned cart flows, welcome series, and post-purchase upsells.
Knowledge Base
A knowledge base is a section on your site with how-to articles, FAQs, or support docs. It reduces customer service tickets and helps buyers feel confident before they purchase.
L
Landing Page
A landing page is a standalone page built for one purpose: conversions. Could be to sell a product, collect emails, or run a flash sale. No distractions, no menus — just focused action.
LTV (Customer Lifetime Value)
LTV tells you how much money the average customer spends with you over time. If your LTV is £500 and you spend £100 to get that customer, you’re in great shape.
Logistics
Logistics is the ugly but critical part of ecommerce — shipping, warehousing, delivery times, returns. Nail it, and customers come back. Screw it up, and your reviews go nuclear.
Lead Magnet
A lead magnet is a freebie you give in exchange for someone’s email. Could be a discount, ebook, guide, or quiz. Once you’ve got their email, you can start building the relationship.
Lookalike Audience
A lookalike audience is a copy of your best customers — built using data from platforms like Facebook. It helps you reach new people who are likely to buy, based on what your existing buyers have in common.
M
Mobile Optimisation
This means your site works well on phones — fast, easy to use, and conversion-friendly. Most ecommerce traffic is mobile now, so if your site sucks on mobile, you’re leaving money on the table.
Margins
Margins are the difference between what you sell a product for and what it costs you. Higher margins mean more money in your pocket. Low margins? You need volume — and scale.
Multichannel
Multichannel means you’re selling in more than one place — like your website, Amazon, Instagram, and in-person. It spreads your risk and gives customers more ways to buy.
Marketplace
A marketplace is a platform where many sellers list their products — like Amazon, Etsy, or eBay. You get built-in traffic but less control. The platform owns the customer, not you.
Merchant Centre
Google Merchant Centre is where you upload your product feed so your items can show in Google Shopping. It’s required if you want to run shopping ads or get free product listings.
N
Niche Product
A niche product is something made for a very specific group of people. It’s not for everyone, but if you hit the right market, your messaging and conversion rates can be way better.
Net Profit
Net profit is your bottom line. It’s what’s left after you subtract everything — product costs, ads, salaries, tools, shipping. If you’re not tracking this, you’re guessing your success.
NPS (Net Promoter Score)
NPS measures how likely your customers are to recommend you to others. It’s a simple score from -100 to +100, and it helps you see how strong your brand loyalty really is.
New vs Returning Customer
This tells you how many of your orders come from first-timers vs repeat buyers. If it’s all new customers, your retention sucks. Repeat customers are cheaper and usually spend more.
O
Omnichannel
Omnichannel is when you give customers a seamless experience across all channels — your site, email, SMS, ads, and even in-store if you have one. It’s about showing up everywhere consistently.
Order Management
Order management is how you track, fulfil, and handle customer orders. Good systems = fewer errors, faster shipping, and better reviews. Bad systems = chaos.
Organic Traffic
Organic traffic is visitors who find you through search engines or free social — not ads. It’s slower to build but free, scalable, and drives trust over time.
One-Click Upsell
This is when you offer a customer an extra product or bundle right after they buy — with one click. No re-entering info. It’s an easy way to boost AOV without killing conversions.
Out of Stock Rate
This is how often your products are unavailable. High out-of-stock rates = missed revenue and unhappy customers. Track this weekly and fix your inventory issues fast.
P
PPC (Pay-Per-Click)
PPC is any ad where you pay when someone clicks. Think Google Ads, Facebook Ads, etc. It’s a fast way to get traffic but can burn your budget if not optimised.
Product Page
The product page is where people decide to buy. It needs great images, clear copy, social proof, and an obvious CTA. Don’t make users think. Make them click.
Product Feed
A product feed is a data file with all your product info — used for Google Shopping, Facebook Catalog, etc. If it’s broken, your ads won’t run.
Payment Gateway
This is the tool that processes card payments on your site — like Stripe or PayPal. Choose one that works with your platform, has low fees, and supports refunds.
Personalisation
Personalisation means tailoring the site or emails to each user — based on what they’ve browsed, bought, or clicked. It boosts conversions and keeps people coming back.
Post-Purchase Upsell
This is a special offer shown right after someone checks out — think “Add this for 50% off.” It doesn’t interrupt the sale and can instantly lift your revenue per order.
Q
Q4 Ecommerce
Q4 refers to the last quarter of the year — October, November, December. It’s the busiest and most profitable time in ecommerce, with Black Friday, Cyber Monday, and Christmas driving huge traffic and sales. It’s where the real money’s made.
Quality Score
Quality Score is a metric used in Google Ads to rate how relevant your ad, keyword, and landing page are to a user’s search. Higher score = lower ad costs and better ad placements.
Quick Checkout
Quick checkout is when your store removes all friction from the buying process. Think one-page checkouts, auto-filled info, Apple Pay, and one-click buys. The faster the checkout, the more conversions you’ll see.
R
Retargeting
Retargeting means showing ads to people who’ve already visited your site but didn’t buy. You’re following them around the internet with reminders — and it works. Most people need a few touches before they convert.
ROAS (Return on Ad Spend)
ROAS tells you how much revenue you make for every £1 you spend on ads. A ROAS of 4 means you made £4 back for every £1 spent. Track this daily if you’re running paid traffic.
Return Rate
Return rate is the percentage of customers who send products back. If this number’s too high, you’ve got a problem — maybe sizing issues, unclear product descriptions, or poor quality.
Recurring Revenue
Recurring revenue is predictable income that comes in regularly — usually through subscriptions. Think monthly coffee deliveries or software plans. It’s stable and makes your store more valuable.
Reviews & UGC
Reviews and user-generated content (UGC) are gold for trust. Photos, testimonials, videos from real customers boost conversion rates. It’s proof your product delivers, straight from the buyer’s mouth.
S
SEO (Search Engine Optimisation)
SEO is how you get free traffic from Google. You optimise your product pages, blog posts, and site structure so you rank higher when people search for stuff. Long-term play, big ROI.
Shopify
Shopify is one of the most popular ecommerce platforms out there. It’s beginner-friendly, scalable, and has a ton of apps for customisation. Most DTC brands start here for a reason.
SKU (Stock Keeping Unit)
A SKU is a unique code for tracking each product or variant in your inventory. Helps you stay organised and avoid fulfilment screw-ups.
Subscription Model
This is where customers pay on a recurring basis — weekly, monthly, whatever — to get your product. It brings in steady revenue and boosts LTV. Think razors, supplements, or coffee boxes.
Split Testing
Split testing is just another term for A/B testing. You test two versions of something — like a product page or email — to see what performs better. One change at a time, or you won’t know what made the difference.
Social Proof
Social proof is evidence that other people trust and buy from you. Could be reviews, testimonials, UGC, or sales popups. It reassures visitors they’re not the first to try it — and that it’s safe to buy.
T
Traffic Sources
Traffic sources are where your website visitors come from — like Google, Instagram, email, or paid ads. Knowing your top sources helps you double down on what’s working and cut what’s not.
TikTok Shop
TikTok Shop lets you sell products directly inside TikTok. Users can browse, buy, and check out without leaving the app. If your brand skews young, this is a goldmine for organic and paid reach.
Third-Party Logistics (3PL)
A 3PL handles your storage, packing, and shipping. You send them inventory, and they handle the rest. Great for scaling without needing a warehouse or team.
Transaction Fee
Transaction fees are what payment processors or marketplaces charge you for each sale. Usually a percentage plus a flat fee. Keep an eye on these — they eat into your margins fast.
Thank You Page
This is the page customers see after buying. Most brands waste it. Use it to upsell, ask for reviews, or link to social — anything that deepens the relationship.
U
Upselling
Upselling is offering a customer a better or more expensive version of what they’re already buying. Like adding a bundle, extended warranty, or premium version at checkout. Done right, it boosts AOV fast.
User Experience (UX)
UX is how easy and enjoyable it is to use your site. Clean design, fast load times, simple navigation — it all adds up. Bad UX = lost sales.
UGC (User-Generated Content)
UGC is photos, videos, or posts your customers create about your product. It’s raw, real, and converts better than brand content. Show it on your product pages and ads.
Unboxing Experience
The unboxing experience is what it feels like to open your product. Fancy packaging, a personal note, or a surprise gift turns a basic order into a moment people want to share.
V
Value Ladder
A value ladder is your product line-up, from low-ticket to high-ticket. You start customers off with something small, then move them up to bigger purchases over time.
VAT (Value Added Tax)
VAT is a consumption tax that gets added to most sales in the UK and Europe. If you’re selling internationally, learn the rules — or risk surprise bills later.
Visitor Conversion Rate
This is the percentage of people who visit your site and end up buying. Industry average is around 2–3%. If you’re way below that, your product pages or offer need work.
Virtual Inventory
Virtual inventory lets you list and sell products you don’t physically hold in stock. It pulls from warehouses, dropshippers, or 3PLs. Good for cash flow, tricky for stock accuracy.
W
Wholesale
Wholesale is when you sell your products in bulk to other businesses, usually at a discounted rate. It’s lower margin but high volume — and great for steady revenue if you land the right partners.
Webhooks
Webhooks are like instant alerts that tell one app when something happens in another. Like when someone places an order, and your fulfilment software automatically gets the data to ship it.
Website Conversion Rate
This is your overall conversion rate — total orders divided by total visitors. It’s the north star for ecommerce performance. If it’s weak, every other metric suffers.
Win-Back Campaign
A win-back campaign is a sequence of emails or ads aimed at inactive customers. You’re trying to re-engage people who haven’t bought in a while with offers, reminders, or product updates.
X
XML Feed
An XML feed is a structured data file used to sync your product info with platforms like Google Shopping or Facebook Catalog. If it’s broken, your products won’t show up — or worse, show the wrong info.
Y
Year-Over-Year Growth
This is a way to compare your performance this year to last year. It shows how fast your store’s growing — or where you’re falling behind. Investors care about this metric a lot.
Z
Zero-Click Search
This is when someone Googles something and finds the answer right in the search results — no clicks needed. It’s tough for ecommerce, but great for brand awareness if you’re showing up there.
Zero Inventory Model
The zero inventory model means you don’t carry stock. Could be dropshipping, print-on-demand, or working with 3PLs. It’s lean and scalable — if your logistics don’t fall apart.
