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Ecommerce & Inventory Glossary

Quick reference for the metrics, inventory concepts, and operations terms sellers use every day. Jump to a section or browse A–Z by topic.

Financial & profitability metrics

COGS (Cost of Goods Sold)
Direct costs of producing or purchasing sold products, including manufacturing, supplier pricing, and inbound shipping to warehouse. COGS is a core component of profit calculation and directly impacts margins.
Landed cost
Total product cost including purchase price, shipping, duties, taxes, and additional fees. Landed cost is used together with COGS to calculate accurate product margins and pricing.
Profit and Loss (P&L)
Financial report summarizing revenue, expenses, and net profit over a specific period. It provides a clear view of business performance and profitability drivers.
Cash flow
Movement of money in and out of a business. Strong cash flow management is critical for maintaining liquidity, paying suppliers, and avoiding stock shortages.
Unit economics
Profitability of a single product unit after all variable costs, including COGS, fees, and fulfillment expenses. It helps evaluate whether a product is scalable.
Margin analysis
Evaluation of profit after all costs, used to identify high- and low-performing products, sales channels, or pricing strategies.
SKU profitability
Profit generated by a specific SKU after accounting for COGS, marketplace fees, fulfillment, and other direct costs. Helps identify which products drive or reduce profit.
Profitability analysis
Assessment of profit across products, channels, or time periods to uncover growth opportunities and eliminate inefficiencies.
Contribution margin
Revenue remaining after variable costs are deducted. This margin contributes to covering fixed costs and generating net profit.
Break-even point
The level of sales at which total revenue equals total costs, meaning the business operates without profit or loss.

Inventory management

Inventory management
Process of tracking, controlling, and optimizing stock levels, including replenishment and demand balancing to reduce costs and avoid stock issues.
Inventory tracking
Monitoring the movement of products across purchasing, storage, sales, and returns using real-time data or system updates.
Inventory valuation
Calculating the total value of inventory using accounting methods such as FIFO or weighted average, which impacts financial reporting and taxes.
Stockout
Situation when a product is unavailable for sale, leading to lost revenue, reduced customer satisfaction, and potential ranking drops on marketplaces.
Overstock
Excess inventory beyond demand, tying up cash, increasing storage costs, and often requiring discounts to clear.
FIFO (First In, First Out)
Inventory method where the oldest stock is sold first, commonly used to reflect actual inventory flow and ensure accurate cost tracking.
Inventory turnover
Ratio showing how frequently inventory is sold and replaced over a given period, used to measure efficiency and demand alignment.
Safety stock
Extra inventory kept to prevent stockouts caused by demand fluctuations or supply chain delays.

Forecasting & planning

Forecasting
Predicting future sales based on historical data, trends, and seasonality to support better inventory and financial planning.
Demand planning
Estimating future demand to maintain optimal inventory levels and avoid both stockouts and overstock.
Inventory forecasting
SKU-level prediction of future inventory needs using data models, improving replenishment accuracy and reducing risk.
Replenishment planning
Process of determining when and how much inventory to reorder based on forecasts, lead times, and current stock levels.

Data, integrations & automation

Single source of truth
Centralized system that provides consistent, accurate, and up-to-date business data across all tools, eliminating discrepancies and manual errors.
Inventory & accounting integration
Automatic synchronization between inventory movements and financial records, ensuring accurate COGS, stock valuation, and reporting.
Marketplace integration
Connection between software and ecommerce platforms such as Amazon or Shopify, enabling automatic syncing of orders, inventory, and financial data.
Multi-channel sales
Selling products across multiple platforms simultaneously while managing inventory, pricing, and orders from a single system.
Data synchronization
Real-time updating of data across systems to maintain consistency and reduce manual reconciliation.
Financial reconciliation
Process of matching internal financial records with actual transactions from marketplaces and payment providers to ensure accuracy.

Analytics & performance tracking

KPI dashboard
Interface displaying key business metrics such as revenue, profit, inventory performance, and cash flow in real time.
Business performance tracking
Continuous monitoring of financial and operational metrics to evaluate overall business health and support decision-making.
Revenue tracking
Monitoring income from all sales channels, including adjustments for marketplace fees, discounts, and returns.
Expense tracking
Recording and categorizing business expenses to control costs and improve overall profitability.

Operations & ecommerce processes

Order management
Process of receiving, processing, and tracking customer orders across multiple sales channels.
Fulfillment
Storage, packing, and delivery of products, either in-house or through third-party logistics providers (3PL).
Returns & refunds
Handling returned products and issuing refunds, including updating inventory and adjusting financial records.