It happened again. You were listening to a webinar on e-commerce best practices, and suddenly, it seemed like they were speaking gobbledygook. As with any industry, e-commerce, shipping, and logistics have special lingos.
Below we define some of the most popular — and most obtuse — terms and acronyms you may hear if you’re in e-commerce.
3PL stands for third-party logistics. Logistics is the process of coordinating and moving resources from one location to another. Third-party means that an outside organization is managing logistics.
The logistics process may include purchasing, receiving, packaging, shipping and transporting goods. A company may outsource a large or small amount of its logistics, depending on its needs. For example, a 3PL working with an e-commerce company may manage logistics from when a consumer adds an item to their cart through delivery.
Usage: The logistics of getting my subscription box out the door are bonkers, but the 3PL I work with takes care of it all.
API is an acronym that stands for application programming interface. API integrations connect different software to increase the efficiency of their business or online shop. Popular e-commerce APIs include payment APIs like PayPal, inventory APIs like Sellbrite, and marketing APIs like HubSpot. Another option is custom APIs designed to meet your specific needs.
Usage: With so many choices, it can be hard to know which API integrations I need for my business.
AVS stands for address verification service. AVS is a tool that helps prevent credit card fraud by verifying that the billing address a customer enters matches the one associated with the cardholder’s account.
Usage: Since the AVS identifies suspicious credit card transactions, Bob felt confident that he wasn’t shipping genuine Minnesota snow to any fraudsters.
Bundling is the act of selling items together as a package deal. Sometimes bundling involves combining two or more things into a single package. At other times, items are pulled together the during the packaging process. Advantages of bundling include streamlining the order process, upselling, and lowering shipping costs.
Usage: By bundling together its best-selling hat and scarf, the company made a bundle and gave customers everything they needed to bundle up on a cold, wintery day.
noun, ˈdimˈ wāt
Dim weight is short for dimensional weight. It’s the volume of space that a package needs in relation to its weight. Major shipping companies, like FedEx, use weight and volume to create dim weight pricing. When you ship an item, your shipping cost will be based on the actual weight or dim weight — whichever is greater. This means that using boxes that are too large can seriously impact your bottom line.
As part of our commitment to sustainability, we’ve invested in special packaging equipment that customizes box sizes to ensure a better fit and less waste. The machine also determines the precise amount of filler paper needed to fill the box and make it safe for delivery. And, since our packaging is right-sized, we can optimize the number of packages on our truck for more efficient shipping and distribution.
Usage: Anger temporarily flared between Fred and Dan until Sally explained that Fred hadn’t called Dan a “dim wit.” Instead, he was asking Fred about the package’s dim weight.
transitive verb, ˈdräp-ˈshi-piŋ
Drop-shipping allows you to sell products without having inventory. Instead, you buy the product from any company (usually the manufacturer or a wholesaler), and they fulfill your orders. The drop-shipping model can help you quickly start an e-commerce business without a huge cash outlay since you don’t need to buy inventory or establish processes to stock and ship your products. However, there can be challenges, such as low-profit margins and backorder issues.
Usage: To earn money for her Caribou coffee habit, Marsha filled her online store with all sorts of kawaii products that were at the manufacturer, ready for drop-shipping.
noun, ˈē-ˌkä-(ˌ)mərs ˈpləg-ˌin
A plugin is a piece of software that’s added to another software program to enhance its functionality. There are many plugins you can use to create a digital store. For example, if you have a WordPress site, you can use plugins for WooCommerce, Big Commerce or Shopify.
A plugin is different from an API because it modifies an existing computer program, whereas an API defines how components and systems will communicate.
Usage: I needed to figure out which e-commerce plugin would provide the best functionality for my digital store, so I asked the advice of a technology expert.
With flat-rate shipping, the cost is not connected to the shipped item’s weight, shape, or size. Instead, the price is determined by the size of the outer box or envelope. That means the shipping costs will be the same, no matter how much you fit in the container. People also use the term flat-rate shipping to describe USPS Flat Rate shipping with Priority Mail boxes.
Usage: Molly cheered because flat-rate shipping was both a simple and a logical choice for her pompom business since all her products basically weigh the same.
On the one hand, fulfillment means that you’ve found complete happiness or satisfaction. On the other hand, fulfillment is the term used to describe the process that customer orders go through — beginning when your company receives the order and ending when the customer gets the product. But we think both types of fulfillment go together. After all, doesn’t everyone feel happy when their e-commerce orders are perfectly processed?
Usage: The client felt a sense of fulfillment after learning that last month’s order fulfillment was 100% accurate and on time.
noun or verb, in-vən-ˌtȯr-ē
As a noun, inventory is a complete list of items such as property, goods in stock, or the building’s contents. Different types of inventory include raw materials, work in progress, finished goods and maintenance supplies to support operations. As a verb, inventory means to take stock of something.
Usage: When inventorying the reasons to work with Point B, the company’s impeccable inventory control is high on the list.
Kitting is simply the act of making a kit. There are many reasons to use a kitting process for e-commerce and retail. For example, you may create a product bundle (see above) to boost sales or create a wellness kit to send to preferred customers.
Usage: We’re not kidding about the benefits of kitting — kits really are a great way to boost sales and streamline operations.
You’ve finally got used to e-commerce — and now the internet is throwing a new term at you? Don’t worry; this one is easy. M-commerce stands for mobile commerce. So, what’s the difference between m-commerce and e-commerce? Well, m-commerce is e-commerce without a desktop computer. Instead, m-commerce happens through wireless handheld devices such as smartphones and tablets.
Usage: Mobile app statistics show that almost 70% of internet users shop using m-commerce on their phones or tablets.
noun, ˈpär-shəl ˈship-mənt
A partial shipment is a package that only contains part of an order. Partial shipments can improve customer experience if all items aren’t available at once. There can be some logistical challenges with partial shipments. For example, you’ll need to be able to independently track all shipments associated with a single order and let the customer know when they can expect to receive the other items. But your logistics company can help iron out the details.
Usage: When the customer ordered soap and water, the seller sent a partial shipment with the sudsy solution since the H2O was on backorder.
Pick and Pack
noun, ˈpik ən(d) ˈpak
If you’re wondering what pick and pack is, the answer is right in the name. The picking part of the process involves finding each item and pulling the correct quantity from the shelves. During the packing part, all the items are assembled in a shipping container in a way that will ensure product safety.
Usage: Peter Piper promised to pick and pack a pack of pickled peppers.
What’s a SKU? While it’s tempting to make jokes about sneezing, we’ll tell you that SKU stands for stock-keeping unit. It’s the scannable barcode that you can see on retail product labels. The value of SKUs is that they help track inventory both in the warehouse and on retail shelves.
Usage: When Dan asked about a SKU, Fred said, “Bless you.” In response, Fred gave Dan the name of a good ear doctor. (Oh wait, we did make a joke about sneezing).
SLA stands for service level agreement. This document lists expectations for the type and quality of services you can expect from a vendor — and also outlines solutions if requirements aren’t met. SLAs should be aligned with business objections.
Usage: Your SLA with a logistics company should include details about turnaround time, receipt of goods, quality checks, return material authorization process, inventory accuracy, and technology.
noun, ˈtir-ˈbāst ˈshi-piŋ
Tier-based shipping means shipping costs increase or decrease based on the tiers you define. For example, you might set one shipping cost for orders under one pound and another price for orders that weigh between one and five pounds. Or you could change shipping costs to decrease as they buy more — or maybe even offer free shipping.
Usage: Tier-based shipping allows the ACME company to charge reasonable shipping costs, whether shipping very heavy bricks or very light feathers.
Turnkey is a word used to describe a product or service ready for immediate use. The idea is that getting started is as easy as turning a key in the ignition. Turnkey products and services usually offer a quicker start with lower costs. The disadvantage is that the product may not ideally suit your business practices. The good news is that many turnkey products can be customized based on your needs.
Usage: The right logistics provider can help determine the optimal systems for your business — whether it’s turnkey, custom or a combination of both.
transitive verb, ˈwer-ˌhau̇-siŋ
Warehousing is storing physical items in a warehouse. Both finished products and raw materials can be stored in a warehouse. Warehousing companies can manage product inventory for your business — ordering, checking, and receiving goods. Some warehousing companies also offer logistic services or product fulfillment.
Usage: After receiving his latest inventory order, Bobby realized that warehousing all his adult onesies in the kitchen wasn’t a long-term strategy for his growing business.
The Definition of Success
Success is a favorable or desired outcome, something that’s easy to achieve when working with Point B Solutions. We’ll help you define your e-commerce objectives — and all the terms used in e-commerce, printing, fulfillment, logistics, promotions, technology and more.