60+ Essential Terms and Acronyms You Need to Know

Want to get a handle on the essential dropshipping terms? Ever wondered what “Abandoned Cart” really means or what “MOQ” stands for? Don’t worry! In this article, we’ve put together a complete dropshipping glossary, covering 60+ key terms and acronyms from A to Z, so you can dive in with confidence and stay in the know. Ready to unlock these useful insights? Let’s get started!

Don’t forget to bookmark this page for quick access anytime you need to check a dropshipping term. Keep it handy for easy reference!



Here are all the acronyms and terms included in this article:

A

• A/B Testing: A method of testing by running two versions simultaneously to compare their effectiveness.
• Abandoned Cart: When a user adds items to their shopping cart but does not complete the checkout process.
• AliExpress: A globally recognized e-commerce platform where many dropshippers source products.
• API (Application Programming Interface): A software interface for integrating with other software and platforms.
• ARPU (Average Revenue Per User): The average revenue per user, used to assess customer value.

B

• Backorder: An order accepted when stock is insufficient, typically resulting in delayed shipment.
• B2B (Business to Business): A business model focused on transactions between companies.
• B2C (Business to Consumer): A business model focused on transactions between businesses and consumers.
• Branding: The process of building a brand image to attract a specific customer base.
• Bundle Pricing: A pricing strategy that combines products to increase sales.

C

• CAC (Customer Acquisition Cost): The cost of acquiring a new customer.
• Cart Abandonment: Same as Abandoned Cart.
• COD (Cash on Delivery): A payment method where payment is made upon delivery.
• Conversion Rate: The percentage of visitors who complete a desired action, such as making a purchase.
• CRM (Customer Relationship Management): Systems and processes used to manage customer relationships.

D

• Dropshipping: A retail method that requires no inventory, with suppliers shipping directly to customers.
• DSA (Dynamic Search Ads): Ads automatically generated based on website content.
• DTC (Direct to Consumer): A business model selling directly to consumers.

E

• ePacket: An economical international shipping method, commonly used for fast shipping of small packages.
• ERP (Enterprise Resource Planning): A system that helps integrate business processes.
• ETA (Estimated Time of Arrival): The projected arrival time of an order.

F

• Fulfillment: The process of completing customer orders, including logistics and shipping.
• FBM (Fulfilled by Merchant): Orders fulfilled by the seller rather than the platform.
• FBA(Fulfillment by Amazon): A service where Amazon stores, packs, and ships products on behalf of sellers, while also handling customer service and returns.

G

• Gateway: A payment gateway, an interface that processes online payments.
• Google Ad: Google’s advertising platform used for placing online ads.
• GMS : Gross Merchandise Sales
• GMV : Gross Merchandising Value

H

• Handling Time: The time taken to process an order from purchase to shipment.
• HTML (HyperText Markup Language): The markup language used to build web pages.

I

• Inventory: Stock or the actual quantity of products available.
• Impression: The number of times an ad or content is viewed.
• IP (Intellectual Property): Intellectual property, covering brand, trademarks, patents, and more.

J

• Just-In-Time Inventory: A strategy of producing or purchasing inventory only as needed, reducing storage costs.

K

• KPI (Key Performance Indicator): A metric used to measure the success of a business.
• Keyword: Important terms used in SEO and advertising.

L

• Landing Page: The page a user lands on after clicking an ad.
• LTV (Lifetime Value): A metric predicting the long-term value of a customer.

M

• MOQ (Minimum Order Quantity): The smallest quantity required to be ordered from a supplier.
• MSRP (Manufacturer’s Suggested Retail Price): The price suggested by the manufacturer for retail.
• Merchant Account: An account used for receiving online payments.

N

• Niche: A specific, targeted customer segment or market.
• Net Profit: Profit remaining after all expenses are subtracted from revenue.

O

• Order Tracking: A system for monitoring the shipping and delivery status of an order.
• Outsource: Delegating business tasks or services to a third party.

P

• POD (Print on Demand): A model where items, like apparel or books, are printed only when ordered.
• PPC (Pay Per Click): An advertising model where payment is based on the number of clicks.
• Payment Gateway: An interface for processing payment transactions.

Q

• Q1-Q4 (Quarter1-4): The four quarters of a fiscal year, typically used to track business performance, with Q1 being January to March, Q2 April to June, Q3 July to September, and Q4 October to December.
• Quality Control: Processes ensuring products meet specified quality standards.

R

• ROI (Return on Investment): A measure of the profitability of an investment.
• Reseller: A seller who profits by reselling products from other suppliers.
• Return Policy: Rules outlining the terms for returns and refunds.

S

• SKU (Stock Keeping Unit): A unique identifier for a specific product.
• Shopify: A popular e-commerce platform supporting dropshipping.
• Shipping Time: The time it takes for a product to be shipped and delivered.

T

• TAT (Turnaround Time): The time required to complete a task.
• Traffic: The number of users visiting a website.
• Third-Party Logistics (3PL): Companies that assist with warehousing and shipping.

U

• UPC (Universal Product Code): A code used for the unique identification of products.
• Upselling: A sales technique to encourage customers to purchase higher-value products.

V

• VAT (Value-Added Tax): A tax added to the value of goods and services.
• Vendor: A supplier or seller providing goods or services.

W

• Wholesale: A model of purchasing products in bulk at discounted rates.
• Warehouse: A storage facility for holding inventory.

X

• XML (Extensible Markup Language): A markup language used for data transmission and exchange.

Y

• Yield: The return rate or profit ratio from an investment.

Z

• Zero Inventory: A strategy of holding no stock and relying on suppliers for direct shipment to customers.
  

With this glossary, you now have a solid foundation in the essential dropshipping terms from A to Z. Whether you’re new to the field or looking to refresh your knowledge, keep this guide bookmarked for whenever you need a quick reference. Mastering these concepts can help you navigate the world of dropshipping more confidently and make smarter business decisions. Ready to put your knowledge into action? Start exploring, and watch your dropshipping expertise grow!