ecommerce Glossary

This is your one-stop glossary for ecommerce and business jargon to help you navigate this huge space. From Authorised Resellers through to Wire Transfers, we have provided brief, to-the-point definitions with relevant examples wherever possible. 

Amazon is one of the world's largest website for ecommerce websites, logistics, payments, hardware, data storage, and media specializing in books, magazines and DVDs.

Based in Seattle, Washington, the site was founded in 1994 and originally called Cadabra but was renamed as Amazon in time for the website launch. Starting out an online bookstore it has since expanded to include multiple retail categories, such as apparel and electronics. As well as their hub site, Amazon has dedicated websites for the US, Australia, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, Netherlands, Spain, and in the United Kingdom. Amazon offers free shipping to other international locations.

Amazon is currently one of the top 10 most visited websites in the world with nearly 197 million people visiting the site each month. Selling on Amazon presents online retailers with a good opportunity to expand their market. 

Some key features to consider when selling on Amazon:

  • Fulfillment by Amazon- this allows you to send your products in bulk to Amazon so they can arrange shipping and fulfillment of your orders on your behalf.
  • Amazon Prime membership - which offers shoppers with free 2-day shipping, along with a reputation for fast and reliable order fulfillment.
  • Built in comparison shopping which compares you to other sellers.

An auction is a method of selling new or used goods by asking buyers to offer bids. The highest bidder wins the item. Online auctions are a highly popular way to buy and sell items online. Online auctions such as eBay, eBid, and uBid provide a platform for buyers and sellers to connect and post and bid on auctions.

With online auction, one is required to register on the site for easy tracking of sellers and bidders. Seasoned auction bidders set-up separate email account/s to monitor the bidding progress, while preventing spam mails on their main Inbox. When the auctioned item closes on scheduled time, the bidding winner is expected to pay for the item. Communication between the seller and buyer is then established to arrange payment and delivery.

The boom of online auctions began when eBay gained popularity in the late 1990's. eBay remains the world's most popular marketplace and auction platform. You can even checkout this guide to utilize online auctions in other ways.

Authentic goods are genuine brand-name items purchased from an authorized distributor. When looking to purchase authentic brand-name goods, it’s very important to ensure you are buying them from an authorized seller. Although the goods themselves may have been legitimately produced, as a reseller, you can still be prosecuted by the brand owner if you purchased them from an unauthorized distributor. If you are unsure whether a supplier is authorized, ask them to send you documentation providing proof.

As a general rule, branded items purchased from China are usually fake, unlicensed or unauthorized items. You often need to purchase direct from the brand owner in order to buy and re-sell their brand name items. 

An authorized distributor is a supplier who is legally authorized by a brand owner to distribute their items directly to consumers, or to retailers. Brand owners establish authorized channels of distribution in order to maintain the value and trustworthiness of their brand. An unauthorized distributor is a supplier who has not been granted permission by a brand owner to sell or distribute items. All suppliers listed in the SaleHoo Supplier Directory are authorized distributors of items they offer. Re-selling items from unauthorized distributors can tarnish your reputation, and can eventually land in lawsuits due to copyright and trademark issues. Should this happen on eBay, you can refer to this guide here on how to resolve concerns with verified rights owners.

One simple way to avoid using unauthorized distributors is to avoid buying branded items such as Nike and Dior from Chinese manufacturers. Chinese manufacturers or suppliers are best used to source non-branded items. This blog will also tell you more about sourcing designer brands such as Coach.

Back orders occur when a drop ship wholesaler runs out of a product and is unable to fulfill an order until new stock arrives. Back orders are a fairly common occurrence when using wholesale drop shippers. As the retailer, you can alleviate back orders by emailing the supplier regularly to check on stock levels; using the supplier’s real-time inventory data feed (if provided); or keeping a couple of items on hand for emergencies. You can learn more on how yo boost your dropshipping profits and improve your margin here

BIN is an abbreviation of 'Buy It Now', an eBay listing option that lets you sell an item for a fixed price. Buy It Now was introduced by eBay as part of their endeavour to make eBay more convenient and resemble more of a traditional retail experience.

Rather than waiting for an auction to end, a buyer can use the BIN option and make an immediate purchase. Using the BIN format costs sellers an insertion fee and a final value fee, when eBay takes a commission of the sale price of the item. 

Writing desirable descriptions with full information is an opportunity for potential buyers to hit that BIN button. Learn some tips on how to write item descriptions here.

Blind drop shipping is when merchandise is shipped directly to the buyer from the drop shipper, but with the retailer's address on the return label. Some drop shippers may also insert the retailer's catalog and/or card inside the package for an additional fee.

Blind drop shipping allows retailers to conceal their drop shipper’s identity from the buyer. Make sure this is discussed with the supplier as this can be beneficial for a retailer's brand.  As with all forms of drop shipping, there are benefits and drawbacks to the model. On the plus side, there is no financial risk to you because you do not have to pre-purchase stock. However, you can encounter issues with back orders, or you may have trouble competing with sellers who purchase items at wholesale. 

A closeout or clearance sale is a sale intended to get rid of all remaining stock, either for a particular item, or the entire inventory. A closeout sale is held for similar reasons to a liquidation sale: to liquidate assets following bankruptcy, when a business relocates, or just because an item isn’t selling well, or a store wishes to get rid of old stock.

Closeout sales offer retailers, both online and offline, an opportunity to buy stocks in bulk at very low prices that can be resold for a good profit. When buying from closeout sales, be sure to determine whether there is a strong market for the items you are buying. Closeout stores include TJ Maxx, Ross Dress for Less, and Marshalls.

Fashion items such as clothing, shoes, and jewelries; are hot niches to sell online. Apart from sourcing them through wholesalers, you can also checkout some latest trends on closeout stores at really cheap prices. You can find out here to guide you more about selling fashion items online.

A consignment is a general term used to describe a batch of goods that is to be delivered to a receiver. For example, a consignment may be a bundle of stock to be sent to a retailer.

Used in international trade, CIF is a type of trade contract, meaning the supplier will pay the freight cost involved in delivering the item to the buyer, including insurance. Essentially, the seller is responsible for taking on the risk of delivering the goods safely to the buyer’s country. Note that CIF is a legal term and the exact meaning differs from country to country.

When you are negotiating trade details, the goal should be to get the supplier to take on as much responsibility as possible and reduce your own risks. However, for smaller wholesale lots, the supplier usually hands over the responsibility to the retailer. 

China has become a popular source of goods because of its cheaper cost. You can find out more about importing from China and the requirements needed to get started here.

A counterfeit, fake or knockoff item is an illegal copy of a brand name item that attempts to pass itself off as the original. Counterfeits unlawfully replicate trademarked terms and logos. The penalties for importing and/or reselling counterfeit items are severe and can involve large fines and even a prison sentence. Customs has the right to detain and destroy any goods they suspect to be counterfeit.

In order to avoid buying counterfeits, fakes and replicas you should ask the supplier for a letter from the brand owner which verifies them as an authorised reseller. 

CPL is an acronym for cost-per-lead. This refers to how much it costs for marketers to obtain each lead. Ideally the lower CPL you have, the more leads you can obtain with the same marketing budget. Some paid strategies marketers might employ to obtain leads include paid advertisements, search engine marketing and social media giveaways. If a marketer spends $20 on a Facebook Ad with the goal of receiving more sign-ups to their mailing list and only 2 people sign up, then the cost-per-lead is $10.

Craigslist is an immensely popular classifieds site, with local sites in most major cities around the world. Craigslist was founded in 1995 by Craig Newmark. eBay became a 25% shareholder in 2004. 

Selling on Craigslist  is simple and most classified listings are free and the site also contains active community forums. Craigslist is praised by online retailers for being less commercially orientated as other online marketplaces. In fact, Craigslist allows users to link from their Craiglist classified to their own website, and therefore, Craigslist provides a fantastic opportunity to push traffic to your own eCommerce website

Craigslist is one of the best places to target local markets. There also other alternatives should you venture internationally which can be found here

Customer returns are items returned to the retailer because the customer changed their mind, the item was faulty, or exchanged for a different item. Customer returned items often end up as part of liquidation and closeout lots.

When drop shipping, customer returns are handled either by your drop ship supplier's policy (may include fees such as for restocking, and return shipping), or by the retailer's preference which should comply with their terms and conditions. To find out more, there's a guide here on handling customer returns when drop shipping.

Many online retailers purchase customer returns as a way to get cut-price deals that can be resold for a profit. As with all forms of product sourcing, when buying customer returned items, you must first determine whether there is a keen buyer market for the products. If you fail to do your due diligence, you may end up purchasing stock that you can't sell, let alone sell for a profit. 

Customs brokers help individuals and businesses meet government regulations for importing and exporting. They help cover importers and exporters on customs classifications, shipping regulations, tariff schedule, and trade documentations for clearing goods through customs. They do this by preparing documentation, calculating duties and other charges, and acting as a go-between between the importer and Customs. Because of the highly complex and sensitive nature of importing and exporting, Customs brokers have to pass examinations and become licensed before they can practice. This blog will guide you when selecting the right customs broker for your importing/exporting needs.

The cost of using a customs broker depends on the complexity of the import and the size of the shipment. Quite often, it is useful to use a Customs broker, at least for your first import. From there, you can usually learn enough from them to complete future orders yourself.

Deadstock is inventory that is not sellable. This may include damaged items, expired items, items that no one wants to buy, or left over seasonal stock, to name a few. Online sellers want to minimise their level of deadstock inventory at all times.

A type of trade contract, meaning the supplier will pay all the costs involved in delivering the item to the buyer, including freight, insurance and any Customs duties. Note that DDP is a legal term and the exact meaning differs from country to country. 

When importing, during your negotiating, your goal should be to get the supplier to take on as much responsibility for the shipment as possible. For example, it is beneficial for you if the supplier is responsible for the shipment from the point it leaves their warehouse, to the point it arrives at your doorstep. However, for smaller shipments, many suppliers rid themselves of all responsibility when it leaves their warehouse. This is commonplace. 

For large items ordered direct from suppliers located internationally, it's best to consult a Customs Broker to handle customs duties and taxes.

Designer inspired or look-a-like items are products that are similar in appearance to a brand name item, but don’t attempt to fool people into thinking they’re originals by including trademarked features such as a logo or brand name. Designer inspired items are valid to sell, just don’t try and trick the buyer into thinking they are getting a genuine item by using brand name keywords in the listing title or description. Doing so can land you into copyright or trademark violation.

Some Chinese suppliers use the term 'designer inspired' lightly, so make sure you check with them that the item definitely doesn't include any logos or brand names before you purchase. Always be wary when buying designer branded items from Chinese suppliers: As a general rule, the majority of designer branded items from China are fake. 

Here's a product idea when selling designer inspired items.

A wholesaler with distribution rights is a wholesaler who has been authorized to sell the manufacturer's product. Market distribution is often tightly controlled for brand-name products, as the owners need to ensure supply remains limited so that their products can continue to sell for a premium.

A retailer buying brand name products from a supplier without distribution rights could potentially have their online listings removed for trademark infringement.

Here's a good example of distribution rights while selling wholesale jeans:

Dropshipping is a service provided by some wholesalers, where they will package and ship merchandise directly to the buyer on behalf of the retailer. The retailer transfers the customer's order to the wholesaler, who takes all the responsibility for storing, packaging and delivering the item in return for a handling fee. Because drop shipping involves the retailer purchasing items one at a time from the wholesaler, drop shipped items, although generally discounted from the retail price, will not qualify for bulk wholesale discounts. This can make drop shipping difficult on some marketplaces such as eBay because if other sellers are offering the same item, but have received a bulk buying discount, you will not be able to compete with them on price. For this reason, drop shipping items from your own website, rather than on eBay, is a much more profitable option for retailers as there are no listing and selling fees to pay.
eBay is a global online marketplace that allows individuals and small businesses to trade new and used items all over the world. Established in 1995, eBay was the first website to popularize selling used items online via auction. eBay has helped online entrepreneurs all over the world to work from home and earn money by selling products online. eBay hosts both live-auction and fixed-price items in 36 countries and has multiple localized sites in the UK, Canada, Australia, and New Zealand to name a few. Selling on eBay is easy and is a fantastic opportunity, even for entrepreneurs with very little start-up capital. All you need to get started is a computer with an internet connection, a digital camera, a few items from around the house that you no longer want and a free eBay account. There are 168million visitors monthly that flock to eBay - all the more reason for you to consider selling there. Here are a few more reasons why you should sell on eBay:
  • Easy listing process
  • Free listings - List up to 50 items for free every month, and only pay when they sell!
  • Seller Protection - Sell with outmost confidence knowing you are protected as a seller

An ‘eBay alternative’ is any other online marketplace apart from eBay that allows buyers and sellers to trade goods, either for free, or for a fee. Some popular eBay alternatives are: Bonanza, Craigslist, eCrater, Etsy, Gumtree, ArtFire, and Ruby Lane

eBay alternatives began popularising when eBay sellers felt that eBay was becoming more difficult to use to make a profit. eBay fee rises and tightening of rules which makes it harder for eBay sellers to run their businesses have assisted in the growth of eBay alternatives. 

Many alternative marketplaces attempt to operate in such a way that is helpful to sellers. They often have strong communities that encourage the users of the websites, both buyers and sellers, to contribute to the future planning of the platforms. 

eCommerce, or electronic commerce is the buying and selling of products and services over the internet. eCommerce as a business model offers a lot of opportunities to earn money because it requires only a small start-up budget, but there is potential to earn large profits. eCommerce sales of physical products are usually made on an online marketplace such as eBay, Amazon or on an eCommerce website. eCommerce grew in the 1980s but boomed in the 1990s following the rise of eBay and Amazon. Easy accessibility and the wide range of products and services for consumers made eCommerce even more popular. Global trends indicate that eCommerce, particularly the sale of physical products, will see immense growth in coming years. eCommerce is set to dramatically change how we buy and sell products online. As with any form of business, eCommerce also has its fair share of competition. To help you succeed here are a few articles that you may want to read:

An EIN number (also known as a Federal Tax Identification Number) is a number used in the United States of America to identify business entities. Most businesses in the US are required to get an EIN when they register and/or start hiring employees.

Many wholesalers, including trusted suppliers listed on the SaleHoo Wholesale Directory require that you have an EIN in order to purchase from them. You can apply for your EIN online

For more information refer to this page.

This refers to the integration of links, videos, images and share buttons to various forms of web media. For example, you may wish to embed your company's most recent Facebook post onto your online store landing page. Or you may wish to embed your recent YouTube tutorial into a product description. Embedding means that your audience can view this content without having to follow a link to an external website.

Escrow is when the buyer deposits money or assets with a secure third-party, who delivers it to the seller when the order is fulfilled. Escrow is designed to help protect people from fraud. If you plan on using Escrow for an online transaction, has the best reputation.

Using safe payment methods such as Escrow or PayPal is essential because it is not uncommon for wholesale scams to take place when you pay suppliers using unsafe payment methods. Unsafe payment methods include Western Union and wire transfer. These methods offer you no protection in the event that something goes wrong with your order. 

Safe payment methods are one thing you need to tackle with suppliers. You can learn more here on other important matters to discuss with suppliers.

An estate sale is an auction or yard sale, usually held to liquidate a deceased person’s goods quickly. Estate sales are often a great place to source items to resell online for a profit. Many sellers find items that provide them with their most profitable sales yet when they scout estate sales. 

However, as with all forms of product sourcing, you need to know whether the items you are buying are actually going to sell. This can be tricky because you often don't have access to market research software to give you the answers you need to decide whether to purchase items. In the end, your success with buying from estate sales will come with experience. 

Etsy is an online marketplace for buying and selling handmade items. The site was founded in 2005 and now has buyers and sellers in more than 150 countries, and receives hundreds of visitors each day. Esty has a strong cult following all around the world. It's most popular categories are wedding, vintage and home and living and kids. 

Selling costs on Etsy are very reasonsable and this has resulted in Etsy having a strong following of satisifed sellers who remain on the platform. 

Expedite shipping is the process wherein a parcel is prioritized to ensure that the product(s) are delivered in a much shorter length of time than usual. With parcels being prioritized for faster delivery, expedited shipping normally comes at an extra cost. Standard local delivery takes about 5 to 7 days for the parcel to arrive. Top courier services provide expedite shipping within the day or up to 3 business days. For international transactions, these same courier services can accommodate expedite shipping within 3-5 business days.

A factory authorized wholesaler is one who has been handpicked to distribute a particular brand or product line. Big name brands are very fussy about choosing only the very best wholesalers to resell their products, so becoming factory authorized is a very important achievement for a wholesaler.

Factory authorized wholesalers have the paperwork from the brand owner to prove that they are legally permitted to distribute their products. If you are ever in doubt about whether a supplier has authorization to sell a product, ask to see their paperwork. 

Find out how you can be successful with online selling by learning how to overcome the most common hurdles when starting out.

Factory overruns are goods supposedly manufactured in excess of the original order. Be very careful buying any brand-name products promoted as 'factory overruns'. If the items were not produced within the order specifications, they are technically unauthorized, and anyone reselling them online can have their listings removed for trademark infringement.

There are penalties for importing and/or reselling unauthorized items. Some of these penalties are severe.  You may have your marketplace account closed down, or you could be prosecuted. 

Feedback is an opportunity for the buyer to comment and rate their satisfaction with the product and buying experience after purchasing from an online seller. Feedback was introduced as a safety measure to help control fraudulent activity and exists on most online marketplaces including eBay. 

When you first start selling on eBay or another marketplace, it is important that you make an effort to get good feedback places on your account. Initially, you will have no seller feedback and it can take time to build a good reputation that will lend buyers to trust you. 


Flea markets are organized markets for trading low-value and secondhand goods. Flea markets can provide you with a fantastic place to buy low and sell high. It's not uncommon to purchase an item such as a dress for $2 and resell it for $30 on eBay. As with all forms of product sourcing, however, you must ensure that you can make a profit on the items you buy at a flea market. 

Here's a guide at sourcing and selling popular flea market items such as antiques.

Specialist knowledge in a hobby item will help, as will experience. Just remember not to spend more money than you can afford to lose, especially when you are just starting out. 

Freight is the transport of commercial goods by ship, aircraft, train, van or truck. When importing, freight is an important part of the total cost that determines how much profit you will make. Frieght, particularly from China to the US, or from China to Australia and New Zealand, can dramatically increase the overall cost of sourcing products internationally. For this reason, it is important that you shop around for freight quotes from multiple shipping companies. 

You should also invest in freight insurance for every shipment. It's not uncommon for shipping containers to fall off a vessell during the crossing! 


A freight forwarding company arranges all the logistics of getting goods from A to B, and guarantees that the products will be delivered in good condition by a pre-arranged date. Freight forwarders are experts and international shipping and importing. It can be overwhelming doing your first shipment but freight forwarding services can help to relieve the pressure and assist you in understanding how importing works. 

It's worthwhile to hire a freight forwarding service for your first import. After using them once, or perhaps twice, you can usually learn enough from them to complete future imports yourself. 

All freight forwarding services charge different rates, depending on their level of experience and service. The cost of freight forwarding also depends on the complexity and size of your shipment also. 

Fulfillment in ecommerce typically refers to a seller completing their side of the process involved with getting an order to a customer. Typically an order will be marked 'fulfilled' by the seller once it has been packed up and is ready to be collected to be shipped. From there, the order is at the liability of the shipping carrier. When an order is physically in the hands of the customer, it would be marked as 'delivered.'
Fulfilment in ecommerce typically refers to a seller completing their side of the process involved with getting an order to a customer. Typically an order will be marked 'fulfilled' by the seller once it has been packed up and is ready to be collected to be shipped. From there, the order is at the liability of the shipping carrier. When an order is physically in the hands of the customer, it would be marked as 'delivered.'

A full container load is a standard 20 or 40 foot container that is filled to maximum capacity by one buyer (either an individual or a company). Full container load shipments are often cheaper than an equivalent weight of cargo in bulk.

When you occupy a partial container load, you pay a higher price per foot. Think of it like buying wholesale items: The more you purchase, the greater the discount. 

When shipping items in large bulk, it's best to hire a customs broker to evaluate your items and make sure it complies with all the necessary regulations. You can checkout the guide here on what to look for in a customs broker.

Grey market goods are legitimately manufactured items that are distributed by people other than the authorized wholesalers. Trademark owners are able to request that any grey market goods sold on eBay or other websites are removed; however, selling grey market goods is not technically illegal in many countries.

If you are caught selling grey market goods, you can face prosecution by the brand owner or account suspension if you are selling on a marketplace. If you are found to be importing grey market items, you may be prosecuted by your local customs authority. 

You can protect yourself by familiarizing these frequently asked questions when importing to the US.

Gross profit refers to the profit a business receives after subtracting all the manufacturing costs and costs associated with selling the product or service. For example, if you sell an item for $20 on Amazon, that you purchased for $10 and must pay a selling fee to Amazon for $3, then your gross profit is $7.

A consumer tax charged on most goods and services in countries such as New Zealand and Australia. As a business owner in these countries, you need to register for GST to so you can claim it back on business expenses (such as buying wholesale merchandise), and collect it from your customers. A supplier may ask to see your GST registration as proof you are a genuine reseller.

The current GST rate in Australia is 10%. In New Zealand, it is 15%. 

An import license is an official document (permit) from a government that allows you to import certain goods or services into a country.

Generally speaking, you’ll only need to get an import license if you want to import items that could potentially pose a health risk - for example, alcohol, tobacco, firearms, fertilizers, animals, drugs and food.

Each of these items has a corresponding governing body, who will ask you all sorts of questions before they decide whether you can be trusted with a license to import said item.

For example, if you wished to import food containing animal products into the United States, you would need to apply for an import license to The Animal and Plant Health Inspection Service.

A less than container load (LCL) is when a buyer has goods to be shipped that don’t fill a standard 20 or 40 foot container and must be consolidated with the shipments of other buyers. This is a common option among smaller retailers who do not hold a great deal of stock. 

While a full container load is more cost-effective than a less than container load, most eBay sellers and online retailers simply don't buy in large enough bulk to fill an entire container. 

A letter of credit is a letter issued by the buyer's bank guaranteeing the necessary funds are available for the purchase. The letter can only be used once the terms of the sale are met, and all the necessary documentation is provided.

When importing or purchasing large wholesale orders, this payment method gives the wholesaler a lot of confidence because it takes a lot of time and effort to process a large wholesale order. If for some reason, the order is cancelled due to a lack of funds, it can be costly for wholesalers, hence why many request that you show a letter of credit.

Light bulk indicates that the wholesaler has a very low minimum order quantity, usually below $500, and is willing to work with small businesses.  This is in contrast to bulk wholesale which requires a minimum order of anywhere from $500 to $10,000 or more. 

Light bulk is the optimal solution for eBay sellers or online retailers who are just getting started. The benefit of buying light bulk is that you are not risking a great deal if you buy wholesale items that do not make as much profit as you expect (though market research software can help to offset the risk). Furthermore, if you are short on storage space, you won't have the worry of having to store a lot of stock which can be overwhelming! 

Liquidation is the process of converting assets into cash. Liquidated items are usually sold at auction for pennies on the dollar, so that cash can be obtained as quickly as possible. Although many people think of liquidation as the sale of a bankrupted individual’s, or business’s, assets to repay debts, in the wholesale industry, the meaning it is often used interchangeably with the term closeouts to refer to merchandise sold off cheaply by retailers at the end of the year or season.

Liquidation or closeout merchandise can include damaged items, customer returns, end-of-season stock, shelf-pulls and surplus. Whether they are going out of business or just preparing for the new year, the retailer’s goal is to get rid of anything they can’t shift in return for some fast cash. And because profit isn’t the aim, liquidations can be a great way of getting hold of some very cheap merchandise to resell. However, as the contents of each lot can be very mixed, there is always a certain percentage only fit for the skip.

Listing fee is normally charged by auction sites like eBay, to place an item for sale. Also called insertion fees, eBay for example, charge a nominal amount depending on the type of listing, value of an item, as well as the number of days the seller wishes to keep the item listed.

A manifest is an itemized packing list used in the transport of goods. When you import from overseas or receive a shipment from a local supplier, a manifest will be included. The manifest lists all the items that should be in your order. You should check your manifest against your invoice to ensure that all items were received. 

A manufacturer is a company that produces items for use or resale. Manufacturers may sometimes be willing to deal with the retailers, but usually only for very high minimum order quantities. Usually, manufacturers sell direct to suppliers such as light and bulk wholesalers and liquidators. 

Because manufacturers are the first cog in the chain of supply, they can offer very low prices on items. However, as stated above, their minimum orders are often very high and therefore, most retailers find that manufacturers are unreachable, in terms of product sourcing. However, keep in mind that some smaller manufacturers including boutique operations will work direct with retailers, so it never hurts to ask. 

Manufacturer’s Suggested Retail Price (MSRP) is the price endorsed by manufacturers for retailers to use when selling their products. It’s also referred to as SRP (Suggested Retail Price), or RRP (Recommended Retail Price); which helps standardize the price through various locations as it plays a major role in controlling their brand equity. Retailers can still set their own price but they will have to base it on the MSRP which is usually agreed upon in their contract. However, the manufacturer has every right to refuse future orders from retailers should their items be priced too far from what was suggested.

A middleman is someone who buys products in bulk and resells them to a retailer. Middlemen are often often confused with wholesalers but there is a real difference between a wholesaler and a middleman! 

Middlemen often pose as wholesalers but are actually light bulk distributors who buy in small to medium bulk from bulk wholesalers. Middlemen cannot offer the same discounted prices on goods like wholesalers can. 

In recent times, many legitimate wholesalers have been mistakenly labelled as middlemen because when retailers compare prices of items on eBay and the prices that wholesalers can offer, it's often cheaper to buy on eBay! This is usually because the eBay seller is a wholesaler themselves who buys direct from the manufacturer. 

A minimum order quantity (MOQ) is the minimum order size accepted by a supplier. Generally, this is based on the minimum order the supplier needs in order for the transaction to be profitable for them. Sometimes they may accept smaller orders for a higher price per unit. With most suppliers, the more you order, the greater your discount.

While some suppliers do not enforce minimum orders, they are essential for many wholesalers who rely on large orders to make a profit. Most wholesalers only make small margins on each item they sell. Sometimes this means that small orders can cost them a lot of time and effort to process, and there is little financial gain, hence why larger orders are more profitable. 

It’s a selling strategy wherein retailers target customers on multiple sales channels at the same time, aiming to increase their conversion rates. Popular online sales channels include eBay, Amazon, Shopify, and other social media sites. Offline sales channels include direct selling on trade shows, flea markets, or brick and mortar stores. When selling in multiple sales channels at the same time, try not to be overwhelmed with your increasing market. Attend to each customer as they come, as this helps in creating brand loyalty. If you’re dropshipping, we have tips on multi-channel retailing to help handle multiple orders:

A product niche pertains to a small or particular segment that a marketer focuses on selling. Niches are established by identifying a target market’s needs and wants that are hardly addressed by current retailers. Niche products are usually unique, very specific, relevant to your target market and highly profitable.

Some examples of niches are organic vs regular snacks, or left-handed vs right-handed golf equipment. For more examples you can refer to this guide:

In ecommerce, this usually refers to when a customer gives their permission to a business to receive communications or resources from them, usually ones that have a marketing objective. The opposite term 'opt-out' refers to when a customer revokes that permission and no longer wishes to receive the stated communications.

This refers to the steps involved in completing an order. The fulfillment process uses a third party (fulfillment) service that receives, stores, and delivers orders to end buyers on a retailer’s behalf. Order fulfillment is mostly used by online retailers who lack warehouse, and distribution facilities.

Take Amazon's FBA (Fulfillment By Amazon) - the Amazon seller sends their inventory to Amazon's warehouse to store, and deliver orders on the seller's behalf, once they make a sale.

Smaller countries with smaller markets also use order fulfillment services for faster delivery, and lower shipping costs. We have created a guide here on how to successfully sell online by using this strategy:

Liquidators frequently sell goods by the pallet or truckload. A full pallet load is generally about 6 or 7 feet high and shrink-wrapped in plastic. Pallet loads usually sell for pennies on the dollars and can be a great way to get a wide variety of goods for a low price. 

However, the drawback of buying in pallet loads is that they are often filled with a mixture of good stock and some not-so good stock that can be hard to resell. 

PayPal is an online payment service, enabling anyone in more than 30 countries to send money to anyone else with an email address. PayPal is free for consumers, but costs are involved for businesses. PayPal fees are a sore point among some sellers.

If you prefer, there are a number of PayPal alternatives that you can choose from which offer the same or similar level of service and have lesser fees.  

A PowerSeller is an eBay seller identified as meeting predefined criteria for outstanding sales and customer service record. There are a few benefits associated with being an eBay PowerSeller: 

  • Access to prefered telephone support
  • Discounted shipping through UPS
  • Health insurance options
  • Access to the PowerSeller discussion boards 

To become eligible for PowerSeller status, you must: 

  • Have spent 90 days on the site
  • Be up to date with your eBay fees
  • Have the required DSR ratings
  • Have the required sales volume requirements 
  • Be compliant with all eBay policies

Refurbished items have had either major or minor damage, but have been restored and then certified as in full working condition. Refurbished items don't usually come in original packaging and may have noticeable cosmetic marks or flaws. 

Refurbished items such as laptops, designer hair straighteners and mp3 players can sell very well online. This is a good option for sellers who have some knowledge of the items being sold as it will give you a competitive edge over others who are both buying and selling the items. 

A replica is a very close or exact copy of a brand-name item. Replicas often unlawfully replicate trademarked terms and logos, and/or use the brand name to advertise the item. Most marketplaces including eBay ban the selling on replicas. If you are found to be selling replicas, your account may be closed down and you may also face prosecution by the brand owner of the item being replicated. 

Often, when replica items are sold, the buyer will instantly be able to detect the fact that it is not the genuine article. This is an easy task because replicas are often of very poor quality with low cost materials being used to manufacture the item. 

A reseller's permit or license prevents you frm having to pay sales tax on items you purchase with the intention of reselling them. To get a reseller's permit, you need to get in touch with your local state department and get a sales tax ID.

Residual income refers to the income received after an income-producing activity has been completed. For example, you may write a book and receive royalty payments for years after it's been published. Or, you might receive continuing rent payments for a rental you already fully own. In terms of ecommerce, residual income may refer to the income you continue to receive for a completed online course or an ebook you have already written. Because residual income streams require no additional work, building these streams can be a lucrative objective for entrepreneurs.

A restocking fee is frequently charged on returned orders by retailers and wholesalers. It is a small percentage of the original cost of the item, withheld by the seller to cover costs associated with processing and handling the return.

These costs are standard in the wholesale industry and are usually outlined in your purchase agreement when you order a wholesale lot from a supplier. 

Retail pricing refers to the pricing that is suggested or used by retailers when they sell their products. Retail pricing is almost always higher than wholesale pricing as it involves additional costs such as extra labour costs (salespeople, marketers, picker packers), physical store costs (e.g. rent, display shelves), online selling costs (e.g. platform subscriptions, online transaction fees). These additional costs that retailers must bear allow them to demand higher prices than wholesalers.
This is a measure of how efficiently a business converts their sales into profit. For example, you may look at how much profit is being produced per dollar of sales. Ideally the higher this value, the greater operating efficiency a business has, where a lower proportion of sales income is being lost to cover business expenses.

The sales tax ID is also called a: Retail or Reseller's License, State Sales Tax Id, Tax Id, Resale Number, Resale Certificate, or Vendor's License. Sales tax is a consumption tax charged on most goods and services in most states in the US and Canada. Your sales tax number identifies you to the government and is required by some wholesalers as proof you have a retail business, because it allows you to defer the sales tax onto your buyer.

Without a sales tax ID, you will need to pay sales tax to the wholesaler on top of the cost of the merchandise.You can usually get one from your state’s website – just Google ‘Your State + sales tax’. 

In wholesale, 'salvage' refers to defected items being sold by manufacturers, retailers and wholesalers. These items are usually soiled or damaged in transit, in storage, in production or while being manufactured. 

Buying salvage items can be a risky business and is best approached by those who know what they are doing.  For example, if you have experience with computers and electronics, you are probably equipped to deal with salvage stock. 

Most shelf pulls are exactly that: items that were for sale and on display in a store, but weren't sold. These items have usually been marked down multiple times and may have had a lot of handling by customers and warehouse staff, causing some minor cosmetic damage to the item or its packaging. Shelf pulls are often included in liquidation lots and are usually highly sort after due to their good resale potential.

Many retailers find that shelf pulled items can be highly profitable. However, product sourcing experience is vital when dealing with shelf pulled items. This is simply because shelf pulled items have obviously been pulled for a reason. Most of the time this is because the items did not sell fast enough. Often, a bit of clever marketing and well written listings can help to sell the items fast when you get your hands on them. Furthermore, because online retailers have lower overhead costs than brick and mortar retailers who sell the shelf-pulled items, you can often afford to sell the items cheaper. 

Shipping and handling simply refers to the cost of shipping the item(s) you purchase. The overall cost includes the raw cost of freight and packaging costs plus 'handling'. Handling is any time spent retrieving the item from storage and preparing it for postage. 

When you purchase wholesale, it is important that you clarify the shipping and handling costs of your order with your supplier. This prevents you from getting stung with hidden costs that you might otherwise ignore. 

Silkfair is an eBay alternative specializing in hand-made and personalized items. Silkfair offers sellers a free booth in the Silkfare marketplace. Like many other alternative marketplaces, Silkfare does not get the same level of traffic as eBay and Amazon, but it offers free listings and low success fees which helps to make up for the lack of traffic. 

Silkfair's most popular categories are antiques, collectibles, eco-friendly, handmade and personalized. You can also purchase wholesale goods on 

A sole proprietor is also referred to as a sole trader. This type of business entity relates to a sole owner of a business, or a self-employed individual. Unlike corporations, and LLCs (Limited Liability Companies) a sole proprietor does not have to take any legal or formal procedures with the state in order to exist. However, registered business license and permit laws may be required to legitimize the business.

A trademark (TM) is a distinctive sign or indicator that identifies products or services to the consumer as being owned by a particular company or individual. A trademark is a form of intellectual property and can be protected by legal action.

A trademark can take the form of a logo, a word or a phrase and even just an image. 

A trade magazine is a magazine containing advertisements for products or services in a particular industry. Some trade magazines have very limited circulation to ensure that advertisements are only seen by a very targeted audience. is a good place to find trade magazine subscriptions. 

Most trade magazines are free to subscribe to and can open up new markets or wholesale purchasing oppurtunities. 

A trade show is a private or public exhibition of new products from a specific industry. It is an opportunity for manufacturers, wholesalers and retailers in that industry to meet, view merchandise, establish contacts and place orders.

Liquidators frequently sell goods by the truckload, which means you need a storage unit to be able to accept the delivery. A truckload can include products in a whole range of conditions. 

When buying by the truckload, it is important that you understand the vendor's conditions. These usually state that you cannot return any items, even if they are found to be faulty or defective. 

A Universal Product Code (UPC) is a barcode that is widely used in the United States and Canada for tracking stock such as books, magazines and CDs. UPC codes are particularly useful when you are locating or ordering stock from suppliers. 

UPC codes consist of a sequence of twelve numbers with no letters or characters. These codes can be scanned to be quickly identified. 

The United Parcel Service (UPS) is a leading freight service based in the United States. UPS offers tracking facilities so that your eBay/online buyers can track where their package is while it is in transit. 

Using UPS, you can also organize for shipments to be collected from your house which saves you a lot of time that would usually be spent going to the postal office. UPS offers international shipping services which is great if you wish to expand to the international marketplace.

The United States Postal Service (USPS) is the government-run postal service in the US. USPS offers free shipping kits which gets you free shipping packages. 

On their website, you will find a free shipping calculator, tracking facilities, and a range of business solutions. 

Check out USPS here: 

Value Added Tax is a consumption tax charged on most goods and services in the UK and Europe, and in some other countries. Businesses need to register for VAT so they can reclaim VAT on any goods or services they have purchased, and so they can collect it when they sell products or services to a customer.

A supplier may ask to see your VAT registration as proof you are a genuine reseller.

A wholesaler is an individual or business that buys in bulk from a manufacturer and then redistributes goods to retailers. Wholesalers can also be referred to as ‘jobbers’ or ‘distributors’. Because manufacturers are consumed with producing items, they use wholesalers to act as a middleman between them and the retailer.

Wholesalers purchase from the manufacturer in very large quantities, and then break the products down into smaller lots to fit with the needs of retailers. Sometimes wholesalers also assemble and grade goods as part of this process.

A wire transfer is the process of transferring money from one bank account to another. Wire transfers can be made through banks, cash offices, or independent companies like Western Union. Because wire transfer payments cannot be reversed, it is not advisable to use them as a payment method unless you already have an existing relationship with the individual or company.

Instead, you should use safe payment options such as PayPal which offer a level of protection if something goes wrong with your shipment or wholesale order. 



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