Retail Business Terms - dummies

By Rick Segel

If you run a retail business or even work in a store or for an online marketer, knowing retail-business terms is key. The following list contains key terms you need to know so that you can stay on top of the retail market:

add-on sale: Additional items a customer buys due to
suggestive selling.
e-mail marketing: Sending customers friendly reminders,
newsletters, and special event announcements via e-mail.
pay-per-click advertising: Sponsored links on the top or
right side of a Web page. You pay only when someone clicks through
to your site.
allowance: Any price reduction given for a multitude of
reasons ranging from slightly defective merchandise to a late
factor: A bank or finance company that buys the
receivables from a manufacturer. The retailer then pays the factor
for the merchandise rather than paying the vendor.
profit and loss statement (P&L): An accounting
report that highlights revenues, cost of goods sold, and net
A.T.S.: Your average transaction size. free on board (FOB): The point when the shipping costs
become the responsibility of the retailer rather than the
purchase order: The actual form used for placing an
beginning of the month inventory (BOM): Physical
inventory in the store at the beginning of the month.
guaranteed sale: A vendor’s promise to take back
unsold merchandise and issue either a refund or a merchandise
credit toward other goods.
rate card: The price list used primarily in the world of
blog: A free interactive Web site that allows a business
to get closer to its customers and position itself as an
jobber: A distributor who buys merchandise to be resold
to the retailer.
resale number: A state-issued identification number
allowing a retailer to buy merchandise without having to pay sales
tax. This number and certificate are also used for admission into
most trade shows.
bottom feeders: Customers who buy only clearance
keystone: A price for merchandise that is double the
wholesale price.
run of paper (ROP): A newspaper advertising term used
when placing an ad indicating that the ad can be placed anywhere
within the newspaper.
call tag: A specific freight carrier’s written
authorization for customers to return merchandise to the retailer
at no cost.
layaway: Storing merchandise for a customer for a later
purchase, usually requiring a deposit and a time limit for the
show special: A price incentive offered by manufacturers
to induce buyers to place orders at a trade show.
charge back: Deductions on an invoice taken by the
retailer for damages, freight allowances, shortages, and so
logo: A symbol of the written name of a business; used
to represent the business.
stock keeping unit (SKU): A number assigned by a store
to identify the manufacturer, style number, size, color, and unit
price of a piece of merchandise.
consignment merchandise: Merchandise the retailer does
not own or pay for until it is sold.
markdown: The difference between the original retail
price and the reduced price.
store front: Any place where a customer can buy from
you, whether a brick-and-mortar store, your own Web site, or an
account on eBay or
deep and narrow: Large quantities of a small selection
of merchandise.
markup: The amount of money added to the wholesale price
to obtain the retail price.
substitution: Occurs when a vendor substitutes one style
for another on an open order.
dog: Slang term for merchandise that is not
off price: Merchandise that is purchased for less than
regular price.
U.P.T.: Units per transaction. A measurement that takes
an average of the amount of items sold during each sales
end of month (EOM): A term referring to either the
payment of invoices due at the end of the month in which the
merchandise was shipped or the amount of physical inventory in the
store at the end of a month.
open to buy: Budgeted amount of merchandise still open
to be purchased for a specific time period.
Web site optimization: Preparing your Web site so that
search engines are able to find it easily.