Ecommerce glossary

Clear definitions of the terms online sellers, importers and wholesalers use every day, each with a formula, an example and a tool to try it.

ACoS (Advertising Cost of Sales)

ACoS is ad spend divided by the sales those ads generated, used mainly for Amazon advertising.

AOV is the average amount a customer spends per order.

The break-even point is the number of units or amount of sales at which total revenue equals total costs, so profit is zero.

CAC is the average cost of winning one new customer, including marketing and sales costs.

CBM is a cubic meter, the standard unit for measuring shipment volume in sea freight.

COGS is the direct cost of the products a business sold in a period, including purchase or production cost and inbound freight.

Contribution margin is what each sale leaves after all variable costs, available to cover fixed costs and profit.

Conversion rate is the percentage of visitors who complete a goal, such as placing an order.

CPC is the average amount paid for each click on an online ad.

CPM is the cost of 1,000 ad impressions.

Gross margin is the share of revenue left after paying the direct cost of the goods you sold.

An HS code is an international product classification number used by customs to set duty rates and track trade.

Incoterms are international trade terms that define who pays for and is responsible for goods at each stage of shipping.

Inventory turnover shows how many times a business sells and replaces its stock in a period.

Landed cost is the total cost of getting a product to your door, including the supplier price, freight, insurance, duty and fees.

LTV is the total revenue or profit a business can expect from a customer over the whole relationship.

Markup is the amount added to a product's cost to set its selling price, usually shown as a percentage of cost.

MOQ is the smallest number of units a supplier will accept in a single order.

ROAS measures how much revenue you earn for every unit of currency spent on advertising.

Volumetric weight is a weight calculated from a parcel's size, used by couriers to price light but bulky shipments.