A version of this post was originally posted on Small and Mighty Co.
Every industry use lots of jargon and acronyms it can feel alienating and really confusing, this is a more comprehensive (than my previous one) business glossary of popular retail and wholesale terms that you can print and keep handy by your desk, pin for later or bookmark for reference.
Using the right vocab and understanding what buyers are saying will increase your confidence and support the building of a trusted relationship with your customers.
Pricing, Shipping and Terms
Recommended Retail Price (RRP) – the price the seller recommends that your product will be sold at.
Cost Price (CP) – the cost to the retailer.
Ideal Selling Price (ISP) – often used by companies that constantly sell at a discount to mass-markets resellers such as supermarkets. Sometimes a product can have an RRP, an ISP, and an CP.
Sell Price (SP) – the cost the retailer decides to sell the product for.
Lead Time (LT) – the time it will take to send and deliver an order.
Terms and Conditions (T&C’s) – usually this refers to the payment terms, (T&C in the clothing industry can also refer to Testing and Certification).
End Of Month (EOM) – also a payment term, for example, 30 days EOM would mean that payment will be due at the end of the month after 30 days. If the invoice date is 15th of November the invoice would fall due on the 31st December.
Settlement Discount – some larger retailers demand that they get a 5-10% (or even higher for some fashion chains) settlement discount when they pay their invoice on time. This discount is usually credited to the accounts team rather than the buying team so the buyers might still want to show they managed to negotiate a discount too. Get around it by asking for the retailers T&C’s, delivery and labelling requirements before quoting them anything as it’s difficult to change the price further into the negotiations. Small independent stores do not usually do this so no need to mention it.
Supplier Manual – a document that almost all large retailers have that will help you when preparing and delivering their orders.
Proforma – payment to be received before the goods are shipped.
Credit Note – a receipt given that can be offset against future payment. For example, if one of the items delivered was faulty or damaged a retailer might ask for a credit note or it might be easier and cheaper to issue one than sending a replacement.
Debit Note – a note to request a credit note, usually used if a retailer has received a faulty or damaged item.
Remittance Advice – some retailers will reference the invoice number when making a payment. Larger retailers will send a remittance advice which shows what invoices they paid and the amount paid and if they have taken any money off for a credit note or any settlement discount.
Carriage Paid – a set amount where if reached the supplier offer free carriage, this is often higher than the minimum order amount.
Minimum Order – the minimum amount a buyer would have to spend per order.
Pack Size – the minimum a buyer needs to buy of one particular product.
Store-Packs – Packs of a set amount of units that larger retailers can send out to their stores without breaking down. This saves time as they don’t have to count out how many of something to send to each store.
Inner Carton – can also be a polybag. Often a smaller box within the outer carton. For example, mugs might be packed in smaller cartons of 6 and then placed into an outer/shipping carton of 6 inners. This will keep the items more protected and secure.
Outer Carton/Master Carton – typically only includes one SKU.
Mixed Carton – a carton of with several SKU’s.
Shipping Carton – often this will be a mixed carton of different products and would be sent to smaller retailers.
Minimum Order Quantity (MOQ) – The minimum buy quantity of one product/SKU
Freight On Board (FOB) – also referred to as Free on board, the supplier delivers to the nearest port, usually to the customers’ freight forwarder (carrier) free of charge. Used for larger shipments coming from abroad. The customer is responsible for the cost and the liability of the stock once delivered to the port.
Cost, Insurance and Freight (CIF) – the supplier organises the shipment and the insurance to a specified port, the liability is transferred once the goods reach the selected port. The buyer is responsible for all the customs costs, docking etc.
Landed UK – the manufacturer/supplier pays for the delivery to the UK, all the customs charges and delivers to the customers UK warehouse.
Sale or Return (SOR) – the buyer has the right to return the goods if not sold against a credit.
Sale or Exchange (SOE) – the buyer can exchange unsold products for other items at the same value.
Buyer’s Pack – includes a catalogue/line sheet, order form and/or price list and the terms and conditions.
Line Sheet – no-frills version of the wholesale catalogue, prices, terms and conditions, pack sizes etc. Can also be called order form or price list.
Point of Sale (POS) – something that will help sell the brand, often it’s a sign with the story of the brand or a display unit for the range with some branding.
Counter Display Unit (CDU) – A display stand for the products, usually holds a number of products and sits on a counter.
Floor Standing Display Unit (FSDU) – A taller display stand for the products that sit on the shop floor.
Stock Keeping Unit (SKU) – A way to identify a product.
ISBN/EAN – The most commonly used barcode system.
Quantity (QTY) – the number of products
Out of stock (OOS) – Sold out but usually used if the item will be coming back into stock.
Backorder (BO) – If a product is sold out it might be put on backorder and sent at a later stage.
Discontinued – Used if a product is not going to be re-stocked.
Sales Agent – a commission based sales representative for a certain geographical area.
Sales Rep - a salary-based sales representative for a certain geographical area.
Quarter 4 (Q4) – the last quarter of the year October to December (January to March = Q1, April – June = Q2, July – Sep = Q3).
Golden Quarter – Refers to the last quarter of the year, this is usually when the shops are the busiest and take the most amount of revenue.
Week on Week (WOW)
Year to date (YTD)
Year on Year (YOY)
This week (TW)
Last week (LW)
This year (TY)
Last year (LY)
Forecast – an indication of how much stock will be bought/sold in a particular time period.
Quality control (QC) – often larger retailers will check a % of the stock coming in.
Quality Assurance (QA) – large retailers have a whole team that will ensure that all their suppliers’ factories are up to date with their audits and that all their products have the relevant testing done to meet all legal requirements.
Product Testing – testing is done to make sure a product meets all legal requirements and is labelled with all the relevant warning labels.
Factory Audits – large retailers often require this to be carried out by an independent third party if the manufacturing is done abroad. If the factory pass they will be issued a certificate. Some factories will already have up-to-date audits so it’s always worth checking before ordering one. It’s always worth checking before starting to work with a factory as it will give an idea of their standards of operation.
Rate of Sale (ROS) – the amount sold vs. amount bought.
Open to Buy (OTB) – the amount a buyer has to spend during a certain period.
Business to Business (B2B)
Business to Consumer (B2C)
Point of Sale System (POS system) – (not the same as the POS above), usually the till and stock management system all in one.
If this all feels a bit foreign and confusing, don’t worry, you will get a hang of it as soon as you start using these terms. It’s easy to get overwhelmed but remember that you won’t need to use all these right away, it’s much more likely to be gradual so no need to learn it all at once, why not bookmark the article or Pin it for later for easy referral.
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