E-Commerce & Order
Management Glossary

A third-party logistics provider that handles warehousing, fulfillment, and shipping on behalf of e-commerce brands, allowing businesses to outsource physical operations.

A supply chain integrator that manages and coordinates an organization’s entire logistics ecosystem—including multiple 3PLs, carriers, and technology platforms—acting as a single point of accountability.

ABC analysis is an inventory categorization technique that divides stock into three classes — A (high value), B (moderate), and C (low value) — based on sales contribution.

An electronic document sent by a supplier or shipper to a receiving party before a shipment arrives, detailing the contents, quantities, and expected delivery date to streamline warehouse receiving.

Average Order Value (AOV) is the mean dollar amount spent each time a customer places an order, calculated by dividing total revenue by the number of orders.

API integration connects software applications through their Application Programming Interfaces so they can share data and trigger actions automatically.

A real-time inventory calculation that determines how much stock can be committed to new customer orders, accounting for current on-hand quantity minus already allocated, reserved, and held inventory.

A backorder is a customer order for a product that is currently out of stock but expected to become available for fulfillment at a later date.

A barcode is a machine-readable data representation, and UPC (Universal Product Code) is a 12-digit barcode standard used to identify individual retail products globally.

The practice of assigning and tracking unique batch or lot numbers to groups of products manufactured or received together, enabling traceability from supplier to customer.

A legal document issued by a carrier to a shipper that serves as a receipt for goods, a contract for transportation, and a document of title for the shipment.

A Bill of Materials (BOM) is a structured list of all raw materials, components, and quantities required to manufacture, assemble, or bundle a finished product.

A long-term purchase agreement with a supplier for repeated delivery of goods at pre-negotiated prices over a specified time period.

BOPIS is a fulfillment model that lets customers purchase products online and collect them at a nearby physical store location.

The process of identifying constraints in your operational workflow that limit overall throughput and cause delays in order processing and fulfillment.

Extra inventory held beyond forecasted demand to absorb supply chain variability and protect against unexpected spikes in orders or supplier delays.

The process of determining the operational resources (staff, space, equipment) needed to meet current and future order volumes.

Carrying cost is the total expense of storing unsold inventory, including warehousing, insurance, depreciation, and the opportunity cost of tied-up capital.

Cart abandonment rate is the percentage of online shopping carts that are created but never completed as purchases, indicating lost revenue opportunities at the checkout stage.

A forced transaction reversal initiated by a cardholder’s bank, typically resulting from a customer dispute over a charge, and carrying financial penalties for the merchant.

Cost of Goods Sold (COGS) is the total direct cost incurred to produce or purchase the products a business sells during a specific period, including materials, labor, and freight.

A method of analyzing customer behavior by grouping customers who share a common characteristic (like signup month) and tracking their activity over time.

Composable commerce is a modular approach to building e-commerce systems by selecting and assembling best-of-breed, independent components rather than relying on a single all-in-one platform.

Inventory owned by the supplier but stored at the retailer’s location, where the retailer only pays for goods once they are sold to end customers.

The percentage of visitors or sessions that complete a desired action, such as making a purchase, calculated as conversions divided by total visitors.

Cross-docking is a logistics practice where incoming shipments are unloaded and immediately reloaded onto outbound trucks with minimal or no warehouse storage time.

The total revenue a business can expect from a single customer account over the entire duration of their relationship.

A cycle count is a perpetual inventory auditing method where a small subset of stock is counted on a rotating schedule rather than doing a full physical inventory.

A business model in which brands sell products directly to end consumers through their own channels, bypassing traditional retailers, wholesalers, and marketplace intermediaries.

A retail-format facility that is closed to the public and used exclusively for fulfilling online orders, combining the layout advantages of a store with the operational focus of a warehouse.

Dead stock refers to inventory that has not sold over an extended period and is unlikely to sell in the future without significant intervention like markdowns.

A carrier notification indicating that a package has encountered an issue during transit that may delay or prevent delivery, such as weather, address problems, or damage.

Demand forecasting uses historical data, market trends, and statistical models to predict future customer demand, enabling better inventory planning and purchasing.

A pricing technique used by carriers that calculates shipping cost based on a package’s volume rather than its actual weight, ensuring large but lightweight packages are priced fairly.

A system that intelligently routes customer orders across a distributed network of fulfillment locations—including warehouses, stores, and 3PLs—to optimize for speed, cost, and inventory availability.

A fulfillment model where the retailer does not hold inventory; instead, customer orders are forwarded to a supplier or manufacturer who ships directly to the end customer.

A formula that calculates the optimal order quantity to minimize the total cost of ordering and holding inventory, balancing purchase costs against carrying costs.

A standardized method for exchanging business documents—such as purchase orders, invoices, and shipping notices—electronically between trading partners in a structured, machine-readable format.

An integrated software suite that manages core business processes including finance, procurement, manufacturing, inventory, and human resources in a unified system.

The connection between an order management system and Enterprise Resource Planning software (like NetSuite, SAP, or QuickBooks) to synchronize financial, inventory, and operational data across business systems.

The process of identifying, triaging, and resolving operational anomalies that deviate from standard workflows, such as stockouts, address errors, or payment failures.

A service where sellers send inventory to Amazon’s fulfillment centers, and Amazon handles storage, picking, packing, shipping, and customer service for those orders.

A fulfillment model where the seller handles storage, packing, shipping, and customer service for orders placed on Amazon, rather than using Amazon’s FBA service.

An inventory rotation method that prioritizes shipping products with the earliest expiration dates first, minimizing waste from expired or near-expired goods.

An inventory valuation and rotation method where the oldest stock is sold or used first, ensuring products move through the supply chain in the order they were received.

Fill rate is the percentage of customer orders or order lines that are fulfilled completely from available stock on the first shipment, without backorders or delays.

Products that have completed the manufacturing or assembly process and are ready for sale to customers.

A shipping and trade term that specifies the point at which ownership and liability for goods transfer from seller to buyer, most commonly used as FOB Origin or FOB Destination.

A standardized classification system (NMFC) that categorizes shipments by density, handling, stowability, and liability to determine LTL freight rates.

Gross margin is the percentage of revenue remaining after subtracting the cost of goods sold, representing how much profit a business retains from each dollar of sales before operating expenses.

An internationally standardized numerical code used to classify traded products for customs, duties, and international shipping documentation.

Headless commerce is an e-commerce architecture that decouples the front-end presentation layer from the back-end commerce engine, allowing businesses to deliver shopping experiences through any channel or device using APIs.

A set of internationally recognized trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers for the delivery of goods in international transactions.

The process of assigning available inventory to specific sales channels, warehouses, or customer orders to ensure stock is distributed where it’s needed most.

A metric measuring how many days your current inventory will last based on average daily sales or usage rate.

The practice of maintaining the right amount of stock at the right locations to maximize service levels while minimizing carrying costs and capital investment.

The process of determining what products to stock, in what quantities, and at which locations to meet anticipated demand while controlling costs.

The loss of inventory due to theft, damage, administrative errors, or supplier fraud, resulting in fewer physical units than what the system records show.

The real-time synchronization of stock levels across all sales channels, warehouses, and fulfillment locations, ensuring that inventory counts are accurate everywhere products are sold.

Inventory turnover measures how many times a company sells and replaces its stock during a period, indicating how efficiently inventory is managed.

A ratio that measures how many times a business sells and replaces its inventory over a specific period, indicating how efficiently stock is being managed.

The accounting method used to assign a monetary value to unsold inventory, which directly affects cost of goods sold, gross profit, and tax liability on financial statements.

The ability to see accurate, real-time stock levels across all locations, warehouses, and sales channels from a single view, enabling better decision-making and preventing overselling.

An inventory strategy where materials and products are ordered and received only as they are needed for production or sale, minimizing stock on hand and reducing carrying costs.

A measurable value that indicates how effectively an operation is achieving its critical business objectives.

The process of assembling multiple individual components or products into a single ready-to-ship kit or package before an order is placed, streamlining fulfillment.

Landed cost is the total price of a product once delivered to the buyer, including the original price, transportation, customs, taxes, insurance, and handling fees.

The final leg of the delivery process where a package travels from a distribution hub or local facility to the customer’s doorstep.

Lead time is the total elapsed time from placing an order with a supplier to receiving the goods, including production, processing, and transit time.

The total time between placing an order with a supplier and receiving the goods in your warehouse, including production time, processing time, and transit time.

The practice of assigning unique identifiers to groups of products manufactured or received together, enabling traceability from supplier through to end customer for quality control and recall management.

The technical connection between an order management system and online marketplaces like Amazon, eBay, and Walmart that enables automated syncing of products, inventory, orders, and fulfillment data.

The smallest number of units a supplier requires a buyer to purchase in a single order, set by the manufacturer or wholesaler to ensure production and fulfillment remain economically viable.

The smallest number of units a supplier or manufacturer will accept in a single purchase order, directly affecting inventory costs and purchasing strategy.

Multichannel selling is the practice of listing and selling products across multiple sales channels simultaneously, such as your website, marketplaces, and retail stores.

A unified commerce strategy that provides customers with a seamless, consistent experience across all sales and interaction channels, whether online, in-store, or on mobile.

A centralized platform that captures, tracks, and orchestrates customer orders from multiple sales channels through fulfillment and delivery.

The percentage of orders shipped without errors, measuring how often the right products in the right quantities reach the right customers.

The total value or quantity of customer orders that have been received but not yet fulfilled, representing committed future revenue awaiting processing.

The practice of grouping multiple orders together for simultaneous processing to improve warehouse efficiency and reduce pick time per order.

The total elapsed time from when a customer places an order to when they receive it, encompassing processing, picking, packing, shipping, and delivery.

The end-to-end process of receiving, processing, picking, packing, and shipping customer orders, encompassing everything from order capture to doorstep delivery.

The complete sequence of stages an order passes through from initial placement to final delivery and potential return, including capture, processing, fulfillment, shipping, and post-delivery.

The automated, rules-driven process of coordinating every step of an order—from capture and inventory allocation through routing, fulfillment, and delivery—across multiple locations and channels.

A system for ranking orders by urgency and importance to determine processing sequence, ensuring critical orders are fulfilled first.

The total time elapsed from when a customer places an order to when it is shipped, encompassing order receipt, verification, picking, packing, and carrier handoff.

Order routing is the process of automatically directing incoming orders to the optimal fulfillment location based on rules like proximity, stock availability, and shipping cost.

The practice of dividing a single customer order into multiple shipments, typically because items are stocked at different fulfillment locations or have different availability timelines.

The end-to-end business process that covers every step from receiving a customer order through to collecting payment, encompassing order management, fulfillment, invoicing, and revenue recognition.

The situation where a business accepts more orders for a product than it has available inventory to fulfill, resulting in cancellations, backorders, or customer dissatisfaction.

The process of reviewing carrier invoices against actual shipment data to identify billing errors, overcharges, and service failures eligible for refunds.

The practice of shipping the available portion of an order immediately while the remaining items are backordered, sourced separately, or fulfilled at a later date.

The process of matching incoming payments from sales channels, payment gateways, and marketplaces against orders and invoices to ensure every transaction is accurately accounted for.

The percentage of orders delivered complete, on time, undamaged, and with correct documentation—measuring end-to-end fulfillment quality.

An inventory tracking method that continuously updates stock quantities in real time as purchases, sales, returns, and adjustments occur.

Inventory that appears available in the system but does not physically exist in the warehouse, leading to overselling, fulfillment failures, and inaccurate stock records.

Pick, pack, ship is the three-step warehouse fulfillment process of selecting ordered items, packaging them securely, and dispatching them to the customer.

The system—hardware and software—where retail transactions are completed, processing payments and recording sales data at the moment a customer makes a purchase.

An order placed for a product before it is available for immediate shipment, allowing customers to reserve items that are upcoming, in production, or temporarily out of stock.

A sales strategy where multiple products are offered together as a single combined package at a price that is typically lower than purchasing each item individually.

Product feed management is the process of creating, optimizing, and distributing structured product data files to sales channels, marketplaces, comparison shopping engines, and advertising platforms.

Documentation confirming that a shipment was successfully delivered to the intended recipient, including signature, photo, or electronic confirmation.

A formal document issued by a buyer to a supplier authorizing the purchase of specific products at agreed quantities, prices, and delivery terms.

The process of comparing shipping rates across multiple carriers and service levels in real time to select the most cost-effective option for each shipment.

A reorder point is the inventory level at which a new purchase order should be placed to replenish stock before it runs out.

The average revenue generated from each customer order, calculated by dividing total revenue by the number of orders over a given period.

Reverse logistics encompasses all processes involved in moving products from the customer back to the seller or manufacturer, including returns, repairs, recycling, and disposal.

The process of moving goods from the customer back to the seller or manufacturer for returns, repairs, recycling, or disposal—the opposite direction of the traditional supply chain.

A formalized process and unique identifier issued to authorize and track the return of a product from customer to seller, governing eligibility, logistics, and resolution.

An order requiring expedited processing and shipping to meet an urgent delivery deadline, typically involving priority handling and premium carrier services.

Safety stock is extra inventory held as a buffer against demand variability and supply chain disruptions to prevent stockouts.

A document generated by the seller confirming the sale of products to a customer, detailing items, quantities, prices, and delivery terms.

The percentage of inventory received that is sold within a specific time period, measuring how quickly products move from the warehouse to the customer.

The practice of assigning and recording unique identifiers to individual units for precise tracking through the supply chain from receipt to delivery.

A contractual commitment defining specific performance standards for order processing, shipping speed, or service quality that a business agrees to meet.

A fulfillment strategy where online orders are picked, packed, and shipped directly from retail store locations rather than a centralized warehouse or distribution center.

The average shipping expense incurred to fulfill each customer order, including carrier fees, packaging materials, and handling labor.

A printed or digital label affixed to a package that contains all the information a carrier needs to transport and deliver the shipment, including addresses, tracking barcode, and service level.

A document listing all packages in a carrier shipment or pickup, including tracking numbers, weights, destinations, and service levels for carrier processing.

Geographic regions defined by carriers that determine shipping rates and transit times based on the distance between the origin and destination of a package.

A unique alphanumeric code assigned to each product or variant in your inventory, used to track stock levels, sales, and fulfillment across all channels.

The process of analyzing a product catalog to identify underperforming SKUs and deciding which to keep, discontinue, or consolidate to improve profitability and operational efficiency.

The strategic assignment of products to specific storage locations within a warehouse, optimized to minimize travel time, improve picking efficiency, and maximize space utilization.

Social commerce is the practice of selling products directly through social media platforms, enabling customers to discover, browse, and purchase without leaving the social app.

A documented set of step-by-step instructions for completing routine operational tasks consistently and correctly across all team members.

A stockout occurs when a product is completely unavailable for sale because inventory has been depleted, resulting in lost sales and potential brand damage.

A situation where a product is completely out of stock and unavailable for sale, resulting in lost revenue, disappointed customers, and potential long-term damage to brand loyalty and marketplace rankings.

The frequency or percentage of time that a product is unavailable for sale due to zero inventory, directly measuring lost sales opportunities.

The rate at which a system processes and completes work, typically measured as the number of orders, units, or shipments handled per unit of time.

The complete cost of a system or solution over its entire lifecycle, including purchase price, implementation, training, maintenance, and operational expenses.

Unified commerce is a retail strategy that consolidates all sales channels, inventory, customer data, and fulfillment operations onto a single platform, providing a seamless experience for both customers and operators.

The revenue and costs associated with a single unit of product or a single customer transaction, revealing whether each sale is profitable.

A supply chain arrangement where the supplier monitors the buyer’s inventory levels and takes responsibility for replenishment decisions, reducing stockouts and ordering overhead for the buyer.

A warehouse picking method that groups multiple orders into scheduled waves based on shared attributes like carrier cutoff times, shipping priority, or destination region to optimize batch processing.

A webhook is an automated HTTP callback that sends real-time data from one application to another when a specific event occurs, enabling instant system communication.

A time-based inventory metric showing how many weeks your current stock will last based on average weekly sales velocity.

Software that controls and optimizes day-to-day warehouse operations, including receiving, putaway, picking, packing, and shipping inventory.

Workflow automation is the use of rule-based logic and software to execute repetitive business processes automatically, reducing manual effort, human error, and operational delays across order and inventory management.

The difference between current assets and current liabilities, representing the liquid funds available to finance day-to-day operations including inventory purchases.

A comparison of a metric’s value in the current period versus the same period one year ago, used to measure business growth while normalizing for seasonal variations.

A warehouse picking strategy that divides the facility into distinct zones, with each picker assigned to retrieve items only from their designated zone to improve efficiency and reduce congestion.

A shipping strategy where sellers consolidate packages and transport them closer to destination zones before injecting into the carrier network, reducing per-package shipping costs.