E-Commerce and Business Terminology

Flashcards covering various e-commerce, finance, and marketing terms.

Tariff

Tax on imported goods, used here in context of China–US trade.

CAC (Customer Acquisition Cost)

Cost to acquire a new customer.

COGS (Cost of Goods Sold)

Direct cost to produce goods sold by a company.

OPEX (Operating Expenses)

Ongoing costs to run a business (e.g. rent, salaries).

3PL (Third-Party Logistics)

Companies that handle shipping and fulfillment.

AOV (Average Order Value)

Average amount spent per transaction.

EBITDA

Earnings before interest, taxes, depreciation, and amortization—used to measure profitability.

Unit Economics

Profit/loss per unit sold.

P&L (Profit and Loss Statement)

Financial statement showing revenues and expenses.

Recap (Recapitalization)

Replacing equity with debt to pay founders/investors without selling the company.

Rollup

Buying multiple smaller companies to combine them into a larger, more valuable entity.

TAM (Total Addressable Market)

Total market demand for a product or service.

Key Man Risk

Risk that a brand’s success depends on a single person (e.g. celebrity founder).

DTC/D2C (Direct to Consumer)

Brands that sell directly to customers, bypassing retailers.

VC (Venture Capital)

Funding from investors for early-stage companies.

Growth Equity

Investment in later-stage companies to help them expand.

Multiple Expansion

Increase in the valuation multiple as a company scales.

Minority Equity

Investors own less than 50% of a company—don’t control it.

AOV

Average revenue per customer transaction.

LTV or CLV

Customer (Lifetime) Value – total revenue expected from a customer over their lifetime.

CAC

Cost to acquire a new customer, typically through marketing.

COGS

Direct cost to produce the items sold.

Contribution Margin

Revenue minus variable costs (COGS, shipping, etc.); tells you how much profit you make per unit.

Gross Margin

(Revenue - COGS) ÷ Revenue – important for understanding profitability.

OPEX

Costs related to running the business (payroll, tools, etc.).

EBITDA

Earnings before interest, taxes, depreciation, and amortization – a measure of cash profitability.

P&L

Shows the business’s income and expenses over time.

3PL

External partners who handle warehousing and fulfillment.

WISMO

“Where Is My Order?” – a common CX issue you can help reduce.

SKU

Unique identifier for each product variation.

Returns Rate

Percentage of orders that are returned – a key metric for Redo.

RTO

When a product is returned to sender without delivery (more common internationally).

DTC/D2C

Brands that sell directly to customers online.

UGC

Social proof content from real customers.

Retention

How well a brand keeps customers coming back.

Churn

The percentage of customers that stop buying or unsubscribing.

CX

How customers feel interacting with the brand.

CSAT

Customer Satisfaction Score – often collected post-interaction.

NPS

“How likely are you to recommend us?” scale.

Shopify/Shopify Plus

Most common e-commerce platform your prospects use.

Klaviyo

Email/SMS marketing platform – useful for CX and retention.

Gorgias

Helpdesk platform – often where returns/warranty requests are managed.

Post-purchase experience

Everything that happens after checkout: tracking, returns, support, etc.

Return portal

The branded experience for customers to initiate a return – where Redo often integrates.