A Quick Guide to Industry Jargon for Ecommerce

Ecommerce is on the rise, and with it comes opportunities for entrepreneurs to enter the marketplace without investing in brick-and-mortar retail space. According to the Pew Research Center, 79 percent of Americans have bought something online. With numbers like these playing a siren song, many entrepreneurs are eager to make their mark in ecommerce.

But first, it helps to have a working understanding of the industry as a whole.

If you brush up on the ABCs of ecommerce with this quick guide to industry jargon, you’ll get more out of the educational blogs and tutorials moving forward. Then you’ll be ready to launch your own store.

Average Order Value (AOV): AOV is a key performance indicator showing the dollar figure for a typical order from your web store: (Revenue) / (# of Orders). Increasing the AOV with incentives, bundles and more can bolster your bottom line.

Call to Action (CTA): CTAs are short marketing messages persuading shoppers to perform a desired act, whether it’s signing up for your email list or adding an item to their shopping cart. Making CTAs look clickable can boost conversions, as can writing compelling copy.

Chargeback: If a customer disputes a charge on their card from an online store and it ends up being fraudulent, the retailer must pay the amount of the transaction plus a fee. This is called a chargeback.

Conversion: Conversions occur when site visitors make a purchase, and in the process, convert from shopper to buyer.

Dropshipping: Dropshipping involves fulfilling customer orders without actually having the items on hand. The customer places an order with your store, but the product ships from a third-party manufacturer or distributor. Pros: Online stores can avoid stocking every single SKU themselves, saving space. Cons: It lessens the seller’s control over the entire process.

Landing Page: A landing page serves as a visitor’s arrival point on your website. Creating specific landing pages helps boost conversions when the content matches the user’s intent. Utilizing premium web templates ensures consistent, branded landing pages across your store.

Long-tail Keyword: In search engine optimization, long-tail keywords are highly specific phrases relating to products or services. Users searching for long-tail keywords are often closer to being ready to buy, so these specific phrases drive valuable site traffic.

M-Commerce: M-commerce means e-commerce via mobile phone. In 2015, people spent 59 percent of their shopping time on mobile, but 85 percent of their dollars on desktop. This shows the importance of offering a mobile-friendly user experience.

Margin: Simply put, the profit margin is the amount your store makes after subtracting the cost of an item from its selling price.

Remarketing: Remarketing involves serving targeted ads to website visitors who viewed a product or added items to their shopping cart without completing the transaction. This method often involves using cookies.

Return on Investment (ROI): ROI is a profitability ratio measuring spend versus return.

Search Engine Results Page (SERP): When a user types a query into a search engine, the resulting display is the SERP. Ranking organically here is a major goal of ecommerce SEO efforts.

Secure Socket Layer (SSL): SSL software encrypts customers’ credit card numbers in transit for an added layer of cybersecurity. Websites using SSL encryption begin with “https:” to show buyers you take their financial privacy seriously.

This is just the tip of the iceberg on the ABCs of ecommerce. But with this quick guide to industry jargon as a reference, you’ll have a better idea of the scope of what it means to operate an ecommerce store online and some of the options available to you. To make your journey easier, consider using full service ecommerce solutions that can handle every aspect of your online business, from branding to web design.