52 Terms Everyone in Wholesale Should Know
Here are all the key words, abbreviations, and phrases used in the world of offline and online B2B commerce.
The types of products a wholesaler offers to retailers. The term highlights the importance of giving buyers a wide range and variety of product types, sizes, colors, price lists, and more.
Products that have been ordered but have not shipped yet. Usually this happens due to the manufacture’s lack of stock, or receiving orders for items before production starts.
The address where a bill or an invoice is sent. Usually, this address is the same as your customer’s company headquarters and can be different than the shipping address.
The name of a specific product or product line created by a particular company.
The situation in which a retailer negotiates with a wholesale seller to accept back or re-purchase any unsold inventory.
Bundled quantities of the same product. Case packs are offered as an option to retailers to make their ordering experience easier and faster.
Collect on Delivery/ Cash on Delivery (COD)
In the wholesale context, a COD arrangement is when a retailer pays for their order upon delivery rather than in advance.
A visual representation (print and/or digital) of your wholesale product line, including photos of the items for sale. This term is used interchangeably with linesheet – yet a catalog tends to be more stylized in terms of design. On B2B Wave, you can also easily create mini-catalogs for each product category.
Chargebacks are a form of consumer protection where a card company or bank requests a charge from a merchant to be reversed. A customer can dispute charges when goods or services are not delivered within the specified time frame, goods received are damaged, etc.
Cost of Goods Sold (COGS)
The calculation all the costs involved in selling a product. Cost of Goods Sold depends on a lot on the complexity of each product’s manufacturing process.
The grouping of products that fit together thematically or are sold as a set.
An arrangement between a retailer and seller that can be used as an alternative to a wholesale deal. Selling your products on consignment means that you agree to place your goods in a store, but won’t receive any money until the product sells. Also, under the consignment statues, unsold products are usually returned to the seller.
The timeframe within which you can produce and ship your goods to your retailers. This is a rather standard practice of businesses working in the food supply industry as their buyers want to ensure that the goods will be on their shelves before they expire.
Major retailers with multiple locations often have a distribution center. Rather than shipping directly to each retail store, the seller will ship to one of these facilities and from then delivers specific quantities to each designated retailer.
The practice under which a site or store sells your product to customers and haves you ship the order directly to the customer once it has been placed and confirmed. This method works best with handmade items or online boutiques
Certain retailers request from wholesale sellers to refrain from working with any other retailers within a specific geographic area or to refrain from offering a particular product, product line or product category to other retailers.
An exporter ships products outside of the country they are based to international wholesale customers.
An account through which a wholesale seller reserves for selling directly to specific customers, rather than allowing a rep, broker or distributor to service the account. This means that sales reps do not receive commission for on house accounts.
An importer brings products from other countries into the country they are based and do business in, and then sells those products to wholesale buyers.
In and Out
When a distributor or warehouse put ins a special order for a product and does not maintain stock in the warehouse.
The document a seller sends to a retailer once the latter has confirmed an submitted order. It includes information about the amount of goods sold and what they are, the cost of the products, additional charges to the retailer (including shipping fees) and contact information for both parties. An invoice typically includes a date and unique identifying number or code for recordkeeping.
A pricing method that involves doubling a wholesale price to get a suggested retail price.
The time a seller requires before being able to produce and deliver goods to a retailer.
The full list of products a seller is offering. A line can also be referred to as “product line” or “range”.
A document that displays all of the products in a seller’s line. By looking at a linesheet, a buy can put together a purchase order by listing the quantity of each item they want to acquire.
An individual person or company that makes goods and sells them to wholesale buyers at wholesale prices.
Manufacturer’s Suggested Retail Price (MSRP)
The price that you recommend your retailer to charge for your items. The term is used interchangeably with “Recommended Retail Price” (RRP).
The difference between your wholesale price and the actual cost of producing an item.
The amount or percentage difference between a wholesale and retail price.
Minimum Order Quantity (MOQ)
The minimum order size accepted by a wholesale seller. Generally, this is based on the minimum order you need in order for the transaction to be profitable for you. Eventually, it’s up to you, the seller, to determine what size an order must be to get a wholesale price break.
Net Payment Terms
A type of payment plan that involves a retailer paying for items, after they have had time to sell your items in her store. For instance, a retailer may request to pay you 30, 60 or 90 days after the invoice date. Note that this is usually referred to as net 30, net 60 or net 90 etc.
The budget a retailer has to place orders. Most retailers are trying to get the right balance between having enough products for their shelves to be fully stocked and avoiding to have so much inventory that they’ll need to offer discounts.
A pick list is a document that indicates which items should be taken from your inventory to fulfill orders. The pick list includes the quantity of each SKU that needs to be taken from inventory to ship your packages.Pick lists are particularly useful for shippers with a large amount of inventory, volume of orders, or customers ordering many SKUs.
Point of Sale (POS)
This is the point at which a retailer receives payment from the shopper. It’s often synchronized with software or some system for tracking inventory, returns, etc.
Private Label/ White label
Private label (also referred to as “white label”) refers to the practice of another company hiring a manufacturer to develop a product under its brand name. Note that the seller’s branding is not included in the final product or packaging.
Price lists contain the products that you offer and their respective prices. You can assign your buyers to different price lists according to their order volume, their wholesale deal, etc.
Purchase Order (PO)
A document submitted to your detailing which products a specific retailer wants to buy, along with their quantities. Once an order is submitted, the PO is usually the basis upon which an invoice is generated.
The term interchangeably with the term “line” and refers to the full list of products that you offer.
Recommended Retail Price (RRP)
The price at which you recommend your buyers to charge for your products.
Sales Representative (Sales Rep or Sales Agent)
An independent person working with your wholesale company under a contractual agreement with the purpose to increase your company’s sales. The sales rep is responsible for pitching a seller’s line to potential new clients. In exchange, the seller pays the sales rep an agreed upon percentage (commission) of the closed sales.
Some retailers require that you mail samples of your pieces to them before they place an order. This is a common practice among wholesalers in the process of closing a new sales deal.
How fast a product sells in a specific store or location.
The address is where the packaged is mailed or shipped to. Note that it can the same as the billing address.
A list of retailers that offer your items.
Stock-keeping unit (SKU)
A unique code (or series of numbers) assigned to each style of product in your line. SKUs are most often used when a seller has a large inventory to manage. The code is usually shown on purchase orders and pick lists.
Labels with relevant product information affixed to merchandise, also known as hang-tags.
Universal Product Code (UPC) Labeling
A unique barcode with a string of digits assigned to each of your products to make inventory and sales tracking easier and faster.
A party (typically a seller or manufacturer) that supplies goods to a retailer.
The rules you set to your buyers in order to do business with them. Typically, vendor compliance covers liability insurance, shipping to distribution centers, product testing, ticketing, labeling, payment setup, invoicing, etc.
Year To Date
A way to track the sales achieved from the beginning of the fiscal year up until a specific date. Similarly, the concept can be used for weeks, months and seasons.
The sale of goods in large quantities, as for resale by a reseller. As such, a wholesaler acts as an intermediate party that sells goods in bulk to individual retailers who are buying them to resell them to consumers.