What an incredible time to be alive! The economy is thriving and ever-changing. The ecommerce business continues to expand in terms of demand, competitiveness, and customer expectations, necessitating increasingly efficient fulfilment systems and infrastructure to better meet your brand’s promises.
If you’re an ecommerce business owner, especially one at the beginning of his or her entrepreneurial career, it’s imperative that you understand all the shipping, fulfilment, inventory, and other words in order to run your company effectively. And if you’re an ecommerce veteran, it doesn’t hurt to receive a refresher AND possibly learn new applications for familiar phrases.
ShipMonk provides a comprehensive A-to-Z vocabulary of ecommerce words that savvy merchants should be familiar with. Consult PART 1 below; if desired, print it down and create flashcards using the terms. The Ecommerce Express will provide a concise and interesting journey!
Purchasing and storing inventory in anticipation of a seasonal transition or a large event, such as Black Friday or Cyber Monday sales.
Not every 3PL provides assembly services. Assembly services entail changing merchandise or its packaging after it has arrived at a warehouse; this is a type of finishing touch that manufacturers do not perform. Some examples include: • Placing poly-bagged jewellery into branded jewellery boxes • Removing protective packaging placed by the manufacturer for bulk shipping • Unboxing, replacing a faulty or incorrect part, and re-boxing • Pre-packing fragile items to prevent breakage • Adding a promotional insert, catalogue, or handwritten note to an order • Adding custom packaging materials such as ribbons or stickers
Average Order Value (AOV)
The average amount spent per order during a specific time frame. To calculate, divide total revenue for a specific time period (for example, one month) by the number of orders for the same time period. For instance, if your e-commerce business received 5,000 orders totaling $300,000 last month, the average order value was $60.
Scan Delivery Waiting
This shipping term indicates that the parcel has been dispatched for delivery but has not yet been scanned at the door. Sometimes the mail carrier forgets to scan the item, or the system has not yet updated the parcel’s status. Unfortunately, “Awaiting Delivery Scan” may also indicate that the carrier missed the box, ran out of time, or ran out of space on the truck, resulting in a failed delivery. This state is typically resolved after a couple of days.
A backordered item is one that is currently out of stock but will become available once a previously ordered supply replenishment arrives. Customers can often order backordered items with the understanding (based on vendor notes) that the item will not ship immediately. Occasionally, the vendor will provide estimates of when the item will be restocked and dispatched, such as “Won’t Ship Until July” or “Won’t Ship for 10 Business Days,” etc.
If a 3PL is fulfilling incomplete orders (orders with a backorder purchase), warehouse pickers and packers must be aware of what is and is not included in the shipment. Refunding and cancelling purchases, as well as fulfilling backorders as soon as replenishment arrives, can be facilitated by sophisticated automation.
Beginning inventory is precisely what it sounds like: the value of the inventory in stock at the start of a certain accounting quarter. Let’s dissect that.
By inventory, we refer to finished commodities that are readily available for sale. Not raw materials, items in the process of being manufactured, goods ordered but not yet paid for, or sold goods that have not yet been transported. By value, we refer to the cost to produce or acquire the inventory, plus the cost to store it. It is the amount of cash you have invested in that inventory. A specific accounting period may begin at the beginning of the year, the quarter, or the month, depending on how frequently inventory is counted. Most businesses conduct a physical inventory count at least once a year, but if your ecommerce fulfilment warehouse has a perpetual inventory system, you track inventory around-the-clock.
A carrier facility is a big warehouse that serves as a regional centre for a shipping company, such as FedEx, UPS, DHL, USPS, custom crating and logistics etc. Similar to distribution centres, these carrier facilities accept large shipments of parcels from other regions of the country and sort them into smaller vehicles for delivery to specific addresses in their respective regions. For instance, items destined for Manhattan may be sent to a UPS facility in New Jersey, where they are sorted and loaded into smaller vehicles for delivery.
Packages flying overseas or within the United States may spend time at multiple carrier facilities, each of which is a step closer to the final delivery destination. In this situation, the consumer and seller may receive an alert each time the order arrives at a new delivery carrier facility.
Price of Products Sold (COGS)
COGS refers to the direct costs of a company’s product production. This total removes indirect expenses like as distribution and sales force costs, but includes the direct cost of materials and labour utilised to make each product.
Cost of Goods Oversight (COGM)
COGM is a phrase used more frequently by accounts than in ecommerce’s day-to-day operations. The amount refers to a statement that displays a company’s total production expenses over a specific time period (one week, one month, one quarter, one year, etc.).
This method of periodic inventory accounting counts only a percentage of inventory at a time, eventually cycling through all SKUs within a specified cycle. Stock-keeping units (SKUs) that move quickly may be counted weekly, whereas slower-moving commodities may be counted monthly, quarterly, or annually. A business that employs cycle counting does not have to close for an extended length of time in order to do a complete inventory count; rather, they only need to account for one shelf, bay, or department at a time. Your inventory management system manages the scheduling and process of when and how to perform this task.
Also known as working stock, this refers to the amount of inventory an e-commerce company maintains in order to fulfil a typical number of orders within a given time period. As soon as an item is sold, it gets replaced.
Demand forecasting utilises a multitude of data points to anticipate customer demand and inform significant business decisions, such as the launch of new products and the selection of the ideal 3PL partner. While demand forecasting is a difficult task that is never 100 percent correct, knowing what to stock and when is essentially a must for operating a successful online business. Demand forecasting allows you to: • Optimize inventories • Align with your operational strategy • Analyze demographic and product trends • Surprise and delight customers • Protect against financial risks • Prepare for peak season