Understanding key terminology is crucial for navigating the exciting world of e-commerce. This glossary equips you with definitions for commonly encountered terms:

Business Model:

• Dropshipping: A retail fulfillment method where a store doesn’t keep goods in stock but instead transfers customer orders and shipping details to a manufacturer or wholesaler, who then ships directly to the customer.
• Wholesaling: Buying products in bulk at a discounted price from a manufacturer or wholesaler and then reselling them at a markup through your online store.
• Subscription Box: A curated selection of products delivered to customers at regular intervals, typically on a monthly basis, for a subscription fee.

Website & Marketing:

• Conversion Rate Optimization (CRO): The process of optimizing your e-commerce website to increase the conversion rate (percentage of visitors who make a purchase).
• E-commerce Platform: The software application that powers your online store, allowing you to manage products, inventory, payments, and customer interactions. (e.g., Shopify, WooCommerce)
• Pay-Per-Click (PPC) Advertising: An online advertising model where you pay a fee each time someone clicks on your ad. (e.g., Google Ads)
• Search Engine Optimization (SEO): The practice of optimizing your website content and structure to improve its ranking in search engine results pages (SERPs).

Sales & Fulfillment:

• Abandoned Cart: A shopping cart that a customer has filled with items but has left the website before completing the purchase.
• Average Order Value (AOV): The average amount spent per order by your customers.
• Customer Relationship Management (CRM): A software tool that helps businesses manage customer interactions and data throughout the customer lifecycle.
• Inventory Management: The process of tracking stock levels, managing orders, and ensuring product availability to fulfill customer demands.

Payments & Security:

• Payment Gateway: A secure online service that authorizes and processes online payments for your e-commerce store.
• Secure Sockets Layer (SSL): A security protocol that encrypts data transmission between your website and a visitor’s web browser, protecting sensitive information like credit card details.
• Shopping Cart Abandonment Rate: The percentage of shopping carts that are abandoned before a purchase is completed.

Additional Terms:

• Affiliate Marketing: A marketing arrangement where you earn a commission for promoting another company’s products on your website.
• Call to Action (CTA): A clear and concise message that encourages website visitors to take a specific action, such as “Buy Now” or “Add to Cart.”
• Customer Lifetime Value (CLV): The total revenue a customer is expected to generate for your business throughout their relationship with you.
• E-commerce Analytics: The process of collecting, analyzing, and interpreting data about website traffic, customer behavior, and sales performance to gain insights and improve your e-commerce strategy.
• Mobile Commerce (M-commerce): E-commerce transactions conducted through mobile devices like smartphones and tablets.
• Return on Investment (ROI): A metric used to evaluate the profitability or efficiency of an investment, including marketing campaigns for your e-commerce business.

This glossary provides a foundational understanding of e-commerce terminology. As you delve deeper into the world of online business, you’ll encounter more specific terms related to your chosen niche and industry. By familiarizing yourself with these key terms, you’ll be well-positioned to navigate the exciting landscape of e-commerce and make informed decisions for your online store.