If you are new to e-commerce and international trade, or maybe you want to start your e-commerce business/site, this glossary will help you to understand the key terms related to this field.
1. Average Order Value (AOV) - is an e-commerce term used to describe the average dollar amount spent for each online customer order.
2. Address verification service (AVS) - A tool provided by credit card processors and issuing banks to merchants in order to detect suspicious credit card transactions. The Address Verification Service (AVS) checks the billing address submitted by the card user with the cardholder's billing address on record at the issuing bank. This is done as part of the merchant's request for authorization of the credit card transaction.
3. Cart abandonment rate - an e-commerce term which refers to visitors who add items to their online shopping cart, but exit without completing the purchase.
4. Cross-selling - encouraging a customer who buys a product (gasoline, for example) to buy a related or complementary product (engine oil, for example). Cross-selling is generally illegal if there is a tie-in between the two products; where the customer must buy one in order to buy the other.
5. Drop shipping - delivery of goods from a manufacturer or original supplier direct to a buyer, without passing through the warehouse of a distributor or retailer.
6. Partial shipment - providing delivery of a shipment in more than one consignment. Permission must be given by the customer in a letter of credit before partial shipment can be considered acceptable.
7. Point of sale - point at which a sale is made, the ownership (and usually the possession) is transferred from the seller to the buyer, and indirect taxes (such as VAT) become payable. Commonly, a retail outlet.
8. Product relationship - refers to products that are viewed frequently by the same user.
9. Stock keeping unit - is a product and service identification code for a store or product, often portrayed as a machine-readable bar code that helps track the item for inventory. A stock keeping unit (SKU) does not need to be assigned to physical products in inventory.
10. Target market - the group of people a business chooses to communicate with, ideally the people
most likely to buy the products being sold. This market should be narrowly defined by demographic
and psychographic factors.