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Glossary for sellers new to eCommerce

So your dream of being an e-commerce tycoon is finally coming true. Congratulations on taking the first steps. It may seem like a simple endeavor now but many of our customers report that the complexities of the e-tail marketplace can surprise and overwhelm the newcomer.  Knowing some key terms early on can be the difference between being buried in the rush or climbing to the top o f the heap. 

A. Products and Inventory

The single most important idea for any new e-tailer to know is to keep your inventory system simple.  Use consistent SKU/name designations to help you stay organized.  As your business grows your inventory will become more complex. Creating a foundation of simple item designations will help you scale your business efficiently. 

  • SKU: A Stock Keeping Unit is the alphanumeric designation for a product or item.
  • ALU: Alternative Lookup Number  is used as an additional descriptive item identifier.
  • MPN: Manufacturer Part Number which denotes how your manufacturer organizes their inventory.
  • Inventory Part: items that hold quantity. There is a definite and finite number of these items at any given time.  Any physical object would be classified as an inventory part.  
  • Non-inventory Part: items that hold no quantity, and that you do not want to track inventory of. You might use this for something like a downloadable item.  
  • Discount item: Specific" item" used for discounts.  A discount code can manifest as an item within an order (in certain shopping carts). 
  • Other Charge: Used for miscellaneous charges, such as shipping charges 
  • Parent (base) item: The product that has variants, attributes or options (child items) attached to it. An example of this would be the base item "T-Shirt". You cannot purchase a base item; you can only purchase the child items expressed by a combination of traits, such as size and color. 
  • Child item/variants/option/attributes: a quality that changes the initial product, most commonly a size and/or color.  Click here to learn more about these special types of items. 


B. Accounting Basics

  • Inventory Asset: An income account that reflects the total value of  inventory purchased and held within a company.
  • Tax code: The percentage at which tax is assessed for goods and services within a state or municipality.
  • Sales tax: Tax that applied to the sale of goods within a particular geographic area.  This is only changed if the buyer and seller are located in the same city or state. 
  • Local tax: Municipality/county tax that is charged at a separate percentage from the state tax, almost always charged in addition to the state tax.  For example, if you are in San Francisco and selling to someone else in San Francisco, you charge both the state sales tax of 8% and then the San Francisco county sales tax of 1.5% for a total of 9.5%. 
  • Out of state tax: Tax charged to buyers of a different state/municipality other than the one in which the business is located. Usually 0%.  
  • Value-added tax (VAT): Tax that is added to the market value of an item which is used in Canada, the European Union, Australia, and New Zealand. Essentially a sales tax for those areas. 
  • Sales receipt: A receipt for sale which include taxes, discounts and adjustments for sale that has been paid. 
  • Sales Order: An order for items or services from a business that is to be paid for by an arrangement between the business and the customer.  Similar to an estimate. 
  • Purchase Order: An offer issued by a merchant to a vendor which indicates quantities and prices for items the merchant wishes to purchase. 
  • Invoice: A bill (paid or unpaid) issued by a seller (merchant) to buyer.


C. In eCC Desktop

  • Matching criteria: Data eCC uses to recognize a product in the online store and its corresponding twin in the accounting system.  For example, you might set the online store SKU to be matched to the accounting system item name/number.  That way, when eCC sees a SKU that matches an item name/number it will know they are the same product. 


D. Online Channel (Shopping Cart/Marketplace)

  • Order status: The various "tags" a shopping cart assigns an order in response to the various events. Setting up these tags is a part of the setup process. An example of this is making an order "Pending" when it is first ordered and then "Shipped" when a shipping label is generated.  


E. Shipping

Generally shipping charges should be enough to cover all the shipping expenses- that is what the shipper (FedEx/UPS/, etc) changes you (merchant) and the price of all necessary shipping supplies (boxes, postage, etc). 

  • Shipping charges: How much your customer pays for shipping when placing the order. 
  • Shipping cost: The charge the merchant pays to ship the order.  This usually means that you are paying to the shipper like FedEx, UPS, etc. 


F. Things to avoid

  • Overselling: When you sell more product than you have.  Usually occurs when there are multiple selling channels, such as a brick-and-mortar store as well as an online channel or multiple online stores. 
  • Backorder: An order that has both in stock and out-of-stock items.  The out-of-stock items are to be purchased and shipped to the client.    
  • Sub-items in QuickBooks: The sub-item is always associated and combined with the parent designation and separated by a ":".  Therefore making your child products more complex.  If possible, keep to a single SKU/name. 


Pro tip: Don't wait until eCC is fully implemented to launch your website.  It is important to understand where/how eCC Desktop can improve your order fulfillment operations.  

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