How to Talk Like a Drop Shipper

By Kate Loyola | Last Updated: July 10, 2018

The world of drop shipping can be confusing, packed with terms that can seem opaque to a newcomer. Even the industry’s name can require some explanation! (If you think drop shipping involves boxes strapped to parachutes, that’s okay. We can help you find out what drop shipping is.)

Fulfillment? Conversion? Profit margins? As much as we might chafe against business-speak and jargon, knowing what these terms mean will make your life easier as a drop shipper. From negotiating with suppliers to researching the next big bestseller, this drop shipper’s glossary helps you talk the talk—and brings you one step closer to walking the walk!

Affiliate: When it comes to online business, affiliates point prospective customers to a partner (usually an online store or service) in exchange for a commission or payment.

Affiliate Link: The links that affiliates use to send prospective customers to partners. Usually, affiliates get a unique identifier code or URL; this allows partners to track which affiliate has sent the incoming visitors.

Call-to-action: Any element on a website that asks visitors to perform an action, such as signing up for a newsletter, registering for a trial, etc. A call-to-action can take many forms, from a simple link to a button or pop-up pane.

Chargeback: A reversed payment/transaction, usually a refund triggered by a customer complaint.

Conversion: When a prospective customer carries out a target action, usually a purchase.

Cookie: A small file sent to a site visitor’s device that allows the tracking of the user’s actions and behavior on that site.

CSV: Comma Separated Values, a type of data file often used for store inventories and other logs.

Directory: A website that aggregates information about, and links to, other websites or products.

Distributor: A business entity that serves as the bridge between manufacturers and retailers. Distributors might serve as the main conduit for manufacturers that don’t sell directly to the public; distributors can also sell in smaller batches, serving as an alternative for retailers that don’t want to purchase large quantities of stock.

Expedited Shipping: An optional service that involves reduced shipping times, often for an additional fee.

Exporting: Selling products outside of your country of operation.

Fulfillment: Also called order fulfillment, this refers to the process of successfully taking and delivering a customer’s order.

Google Keyword Tool: Part of the Google Ads platform, this tool parses Google’s search data to recommend keywords related to your chosen category or website.

Google Trends: Another tool from Google, Trends displays search frequencies for your chosen keywords or topics. Many online entrepreneurs use Google Trends to gauge interest in a prospective niche or compare interest in specific keywords across different areas or over a certain period of time.

Inventory: A seller’s current total product stock.

Landing Page: A separate webpage that often appears to site visitors as a result of their completing a certain target action. Calls-to-action typically send respondents to a custom landing page.

Listing Fee: The fee that sellers might occasionally be asked to pay in exchange for having their products listed in an online directory or marketplace.

Logistics: The domain concerned with the transport and delivery of products or services. When you’re mulling over how to get your latest stock from your suppliers or how to deliver an order to a customer, you’re dealing with logistics.

Manufacturer: A company or person who produces goods for sale.

MAP (Minimum Advertised Price): The minimum price for selling a product. Not all manufacturers set a MAP or require retailers to observe minimum advertised pricing; check with your specific suppliers to be sure.

Margin: Also known as profit margin, this describes the gap between the price you pay for your product stock and the price you sell the product for.

Minimum Order Size: The minimum product quantity you need for a supplier to accept your order. Not all suppliers set a minimum order size; check with your specific suppliers to be sure.

Net Terms: When a supplier gives you a certain number of days to pay for orders after these have been shipped. You’ll typically see these given as “net x”, where x is the number of days you have to pay for your purchase after it has been shipped.

Niche: A specific market segment. Online entrepreneurs often seek out and target niches as a way to ensure profitability and manage competition.

Outsource: The practice of taking on third-party services to carry out certain aspects of your business.

Overhead: The expenses you incur as part of your business’ day-to-day operations.

PayPal: One of the most popular and longstanding payment processing systems for online businesses.

Reseller: A business or entrepreneur who markets a rebranded product or service, or stocks goods for resale.

Retailer: A business or merchant that sells directly to a consumer.

SEO: Search engine optimization, the field concerned with improving a website’s visibility and performance on search engines such as Google.

SERP: Search engine results page, the web page that lists a search engine’s responses to a user’s search prompt.

Shipping: In the world of online business, this refers to the transportation of goods from the seller to the customer.

Supplier: A manufacturer or distributor who provides stock to a retailer.

Tracking Number: A unique code that identifies a package, allowing couriers and shippers to track a delivery’s progress and confirm its success.

Wholesale Price: The price offered by suppliers for products bought in bulk, often for adding to a retailer’s stock. This price is typically lower than market price.