The online business wiki

Every term you will meet while building a store, explained in plain language. No jargon, no assumed knowledge.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Comparing two versions of a page or ad against real traffic to see which one performs better.

A cart a shopper fills but leaves without completing the purchase.

Average Order Value (AOV)

"Average order value" — the average amount a customer spends in a single order.

B

What Is Bounce Rate? A high bounce rate on a landing page often signals a mismatch between what…

Break-Even Point

What Is the Break-Even Point? Below the break-even point, you’re operating at a loss. Above it, every additional…

C

What Is a Chargeback? Instead of contacting the store, the customer contacts their card issuer and disputes the…

What Is Churn Rate? Churn rate is most associated with subscriptions, but a store without one can adapt…

Click-Through Rate (CTR)

What Is Click-Through Rate? CTR measures how compelling an ad is at the moment someone sees it, before…

Conversion rate

The share of visitors who complete the action you wanted — usually a purchase.

Cost of Goods Sold (COGS)

What Is Cost of Goods Sold? In dropshipping, COGS is mostly the supplier’s per-unit price, sometimes including their…

Cost Per Click (CPC)

What Is Cost Per Click? CPC affects how far a test budget stretches. The same $100 budget buys…

Customer Acquisition Cost (CAC)

What Is Customer Acquisition Cost? CAC takes your total marketing spend over a period and divides it by…

Customer Lifetime Value (LTV)

What Is Customer Lifetime Value? LTV looks past the first sale to estimate what a customer is worth…

D

Digital product

A good delivered electronically, with no inventory, packing or shipping involved.

A retail model in which an online store sells products without keeping them in stock.

F

Everything involved in getting a paid order delivered to the customer.

G

What Is Gross Profit? If a product sells for $50 and costs $20 to source, the gross profit…

M

The share of a product's price that is left as profit once all costs are subtracted.

Minimum Order Quantity (MOQ)

What Is MOQ? MOQs are common with private-label and wholesale suppliers, where manufacturing setup costs make very small…

N

What Is Net Profit? Net profit accounts for everything: product cost, shipping, ad spend, software subscriptions, payment fees,…

A focused segment of a wider market that a store deliberately serves.

What Is a Niche Store? A store selling only yoga gear is a niche store. A store selling…

P

Print-on-demand

Custom products printed and shipped only after a customer has ordered them.

What Is Profit Margin? For example, if an item sells for $50 and costs $20 to source and…

R

Return on Ad Spend (ROAS)

What Is ROAS? ROAS is usually written as a ratio, like 4:1, meaning $4 of revenue for every…

S

Work that makes your pages easier for search engines to understand and rank.

SKU (Stock Keeping Unit)

What Is a SKU? Each variant of a product — a different size or color, for example —…

The business that provides the products you sell.

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