The Ultimate Retail Terms Glossary: 88 Wholesale Definitions for Consumer Brands
Thriving in retail means getting fluent in the language of distributors, retailers and brokers, so understanding key retail terminology is non-negotiable. Here’s your ultimate retail terms glossary to navigate retail like a pro.
Bookmark it, share it and drop it in your onboarding decks—your future self will thank you.
Logistics & Fulfillment
ASN (Advanced Shipping Notice)
An electronic doc typically sent via electronic data interchange (EDI) that notifies a retailer or warehouse that a shipment is on its way to the fulfillment center or distribution center. It includes details like contents, carrier and arrival time to help with warehouse management systems and plan physical inventory.
Inventory Turnover
How often you sell through your stock within a given period. Higher turnover means products aren't sitting on shelves gathering dust.
Just-in-Time (JIT) Inventory
An inventory management strategy that minimizes storage costs by receiving goods only as they’re needed. Great for small or niche retailers looking to control cash flow.
Lead Time
The total time from placing an order to when it's fulfilled. Critical for planning in both big box stores and pop up shops.
Safety Stock
Backup inventory that prevents out-of-stock (OOS) situations. It's part of any solid inventory management system.
Shrinkage
Shrinkage refers to the loss of inventory that isn’t accounted for through sales. It’s typically caused by theft (both internal and external), damage, miscounts or administrative errors. Over time, shrinkage eats into your gross profit and can seriously impact net sales. Comparing actual inventory to what's recorded in your system is crucial for identifying issues early, tightening controls and protecting your bottom line.
Universal Product Code (UPC)
A barcode used for product identification and POS systems. It's essential for tracking stock keeping units (SKUs) across channels.
Back order
A back order occurs when demand exceeds supply and items are temporarily unavailable for fulfillment.
Bill of lading (BOL)
A BOL is a legal document detailing what’s being shipped, where it’s going and who’s responsible.
DC (Distribution Center)
A distribution center is a warehouse where products are stored and shipped to customers, playing a vital role in supply chain management.
Distributors
Distributors buy in bulk from manufacturers and resell to retailers, handling logistics and local delivery. Small businesses typically onboard with distributors once they have an anchor store.
Third-party logistics (3PL)
A 3PL is an outsourced logistics provider that handles inventory storage, fulfillment and shipping. Many retail businesses partner with 3PLs to streamline supply chain and reduce retail operating expenses.
Delivered Pricing
Delivered pricing means the retail price includes transportation costs, offering simplicity at the point of sale (POS) but less transparency on wholesale price vs retail price.
Fill Rate
Fill rate is the percentage of customer orders fulfilled without delay, reflecting supply chain efficiency and supporting a positive customer experience.
FOB (Free on Board)
FOB defines when ownership and liability for goods sold shift from seller to buyer during shipment.
Fulfillment center
A fulfillment center stores actual inventory and handles order processing, picking, packing and shipping for eCommerce businesses or electronic retailing.
Proof of delivery (POD)
POD confirms that goods have reached their destination and have been accepted by the recipient, closing the loop on physical goods movement.
Shipper
A shipper is the party that sends goods from one location to another, either directly or via third-party logistics.
Stock keeping unit (SKU)
A SKU is a unique identifier for each product variant, essential for inventory management systems and tracking sales transactions.
UCC128 Labels
UCC128 labels are barcodes used on cartons and pallets for shipping, improving tracking and receiving accuracy in high speed retail environments.
Lot number( also known as Lot code or Batch number)
A lot number is a unique code used to trace a batch of products, often for recalls or quality control.
Packing List
A packing list is a document that itemizes the contents of a shipment, helping ensure accuracy during receiving and physical inventory checks.
Less-than-truckload (LTL)
LTL shipping refers to transporting smaller freight loads that do not require a full truck. It helps optimize shipping costs for retailers handling moderate volumes of goods.
Full Truckload (FTL)
FTL shipping is used when a retailer's shipment fills an entire truck. It is faster and reduces handling, making it ideal for high-volume or time-sensitive shipments.
Case Pack
A case pack refers to the number of product units packed together in a single case.
Inner Pack
An inner pack is a smaller unit of packaging within a case pack, used for organizing and protecting smaller quantities of goods sold.
Master Case
A master case is the outermost packaging containing multiple inner packs or case packs, designed for bulk handling and shipping.
Pallet
A pallet is a flat platform used to stack and transport goods in bulk, improving warehouse efficiency and facilitating supply chain management.
Retail & Merchandising
Brick and Click
Retailers that operate both an online store and a physical location. It’s the backbone of omnichannel retailing. For example, Steve Madden, Allbirds and Rothy’s are well-known omnichannel brands. Other brick-and-mortar stores like Sephora and Zara are known to create an omnichannel presence.
Endcap
A high-traffic display located at the end of an aisle, designed to grab attention and drive impulse purchases. It's prime retail space for promos, new launches and flash sales that need to move fast.
Facing
The number of identical product units displayed side-by-side on a shelf, facing the customer. More facings increase visibility, signal popularity and often lead to stronger sales by dominating shelf space.
Minimum Advertised Price (MAP)
The lowest price retailers can publicly advertise a product, protecting brand value and prestige pricing strategies.
Keystone Pricing
A simple pricing model where retail price is double the wholesale price. Often used by boutique and niche retailers.
Retail Price
The final price customers pay at checkout. It’s influenced by MSRP, MAP and whatever in store deals you’re running.
Loss leader
A loss leader is a product sold at a loss to attract shoppers and drive sales of higher-margin items.
Visual Merchandising
How you display products in store to entice customers and enhance the customer’s shopping experience.
Retail Space
Every square foot counts. Whether you’re leasing in a shopping center or negotiating a triple net lease, space impacts sales.
Authorization
Authorization is a retailer’s approval to carry a product, often following negotiations or category reviews.
Barcode
A barcode is a machine-readable label that tracks products for inventory, pricing and checkout. It ties directly to the universal product code (UPC).
Brick-and-mortar
Brick-and-mortar refers to physical stores where customers shop in person. These stores rely heavily on foot traffic, visual merchandising and impulse purchases.
Catalog
A catalog is a curated collection of products used in print or digital form to drive sales or support buyers.
Category review
A category review is when a retailer evaluates product performance using metrics like average monthly sales and decides what stays, goes or gets added.
Dead stock
Dead stock refers to unsold inventory that no longer has demand, tying up capital and shelf space.
Discontinuation (disco)
Disco means a product has been phased out and is no longer actively sold or replenished in the retail store.
Free Fill
Free fill is when manufacturers provide products at no cost to retailers to encourage trials or fill shelves during launches.
Manufacturer suggested retail price (MSRP)
MSRP is the price a manufacturer recommends for retail, serving as a benchmark for consistency.
Markdown
A markdown is a price reduction used to clear dead stock or drive sales during flash sales or holiday seasons.
Merchandising
Merchandising covers how products are displayed and promoted in-store or online to maximize sales.
Minimum order quantity (MOQ)
MOQ is the smallest number of units a retailer must purchase per order, impacting inventory management and retail operating expenses.
Promos / Discounts
Promos and discounts are temporary price cuts or incentives used to boost sales or clear inventory.
Reset
A reset is when a retailer reconfigures a shelf or planogram to introduce new products or improve category flow, impacting the customer's shopping experience.
Slotting Fees
Slotting fees are payments made to retailers to secure shelf space, especially in big box stores.
Temporary price reduction (TPR)
TPR is a short-term price drop, often funded by the manufacturer, used to spike sales.
Cut-in date
The cut-in date is when a new product officially hits the shelf or store planogram, launching its retail lifecycle.
Wholesale & Distribution
Direct Store Distribution (DSD)
A model where suppliers deliver goods directly to retail stores instead of warehouses. Great for produce or if you are an early stage brand with lower margins.
Purchase Order (PO)
The official order sent from buyer to supplier. It kicks off the sales transaction and helps streamline supply chain management.
Net Terms
Net terms refer to the agreed-upon number of days a buyer has to pay the invoice after receiving goods. This practice is common in B2B sales to help manage cash flow and support retail operations.
Rebate
A rebate is a retroactive discount given to retailers or buyers based on volume purchases or specific sales targets.
Billbacks
Billbacks are payments suppliers give retailers after the fact to fund discounts, promos or marketing efforts.
Broker
A broker connects manufacturers with retailers, managing relationships and helping get products placed in retail stores, cafes and corporate offices.
Buyer
A buyer is the person at a retailer responsible for selecting which products to carry.
Deduction
A deduction is an amount retailers subtract from payment due to chargebacks, shortages or promotional allowances tied to the goods sold.
Chargeback
Chargebacks are fees retailers charge suppliers for compliance violations, damaged goods or late shipments. Businesses have to be aware of these charges as it impact net sales and vendor relationships.
EDI (Electronic Data Interchange)
EDI automates the exchange of business documents like invoices and POs between companies.
Off-Invoice (OI)
Off-invoice discounts are temporary price reductions (TPR) taken directly off the invoice, not requiring later reimbursement.
Redistributor
A redistributor buys from manufacturers, holds inventory and resells to other distributors or retailers. (eg. Dot Foods)
Scan Backs
Scan backs reimburse retailers based on actual sales scanned at the register during a promotional period.
Sell sheet
A sell sheet is a one-pager that showcases your product to potential buyers, highlighting features, pricing and benefits.
SPIFF
A SPIFF is a sales incentive paid directly to reps or retailers to drive product movement.
Trade show
A trade show is an event where brands showcase products to retailers, distributors and industry professionals.
Trade Spend
Trade spend includes all costs related to promoting products through the retail channel, from discounts to endcaps.
Open-to-buy (OTB)
OTB is a budgeting method retailers use to plan future inventory purchases based on current sales, inventory levels and forecasted revenue.
Stay on top of retail terms
This isn’t just a retail dictionary; it’s your cheat sheet for surviving and thriving in today’s cutthroat retail world. Bookmark this page and keep it handy for quick reference.
To learn more about retail and wholesale, we recommend explore our library. You can also access free spreadsheet templates here to operate your business.
FAQ
1. What are the most important retail metrics to track for growing your CPG brand?
Key retail metrics include sell-through rate, gross margin, velocity, unit per store per week (UPSPW) and ACV (All Commodity Volume). These help you understand product performance, profitability, and where to focus for growth.
2. What’s the difference between AOV, ATV and basket size in retail analytics?
AOV (Average Order Value) is primarily used in eCommerce, ATV (Average Transaction Value) applies to physical stores and basket size refers to the number of items or total spend per transaction. All three measure customer buying behavior differently. It is more common to use basket size and ATV in retail.
3. How do DSD, 3PL and redistributors differ in retail logistics?
DSD (Direct Store Distribution) delivers directly to stores, 3PLs handle outsourced warehousing and shipping, while redistributors buy in bulk and resell to smaller distributors or retailers. Each supports a different retail strategy.
4. What’s the difference between gross margin, net profit and ROI in retail?
Gross margin shows product-level profitability before expenses, net profit is your true bottom line after all costs and ROI (Return on Investment) measures how efficiently spend drives revenue across promotions or operations.
5. What are the most common causes of chargebacks and deductions in wholesale?
Chargebacks and deductions often stem from compliance issues, late shipments, damaged goods or unauthorized promos. Understanding how to reduce these fees is key to protecting net sales and maintaining good relationships with retailers.
