eCommerce Glossary for Shopify Storeowners

We throw around a lot of words and phrases in the Shopify community. Here's the definition of each.

3rd Party Logistics (3PL)
Instead of picking, packing, and shipping your own orders, you can hire a 3rd party service like Fulfilled by Amazon to handle it for you.
A/B Testing
In marketing, A/B testing is a type of experimentation in which you present people with two variations of a marketing material and see which performs better. This can be done in PPC ads, email, pop-ups, and web pages.
Cart abandonment rate
The percentage of visitors who proceed to checkout but don't purchase.
Abandoned Cart Emails
For shoppers who make it through step 1 of the checkout process but don't complete checkout, we can send them automated emails with a link to their shopping cart.
Affiliate Marketing
The practice of letting other people market your products for a percentage of the sale. (Also called referral marketing if they affiliate and customer personally know each other.) Suggested app: Refersion
Assisted Conversions
These are interactions visitors have with your store leading up to a purchase. A sales funnel may involve multiple touchpoints before the final purchase decisions. These are assists.
Average Order Value (AoV)
Your total revenue divided by the total number of orders.
B2B (Business to Business)
Does your business sell directly to other businesses? If so, you're a B2B. Wholesale businesses are typically B2B.
B2C (Business to Consumer)
Most ecommerce sites are B2C because they sell directly to consumers.
Black Friday
The day after Thanksgiving in which retailers turn a profit, moving their books from red to black.
Tthe practice of not seeking or accepting outside investors.
Bounce rate
The percentage of visitors who navigate away from the site after viewing only one page.
An instruction to the visitor to provoke an immediate response, such as "learn more", "add to cart," or "proceed to checkout".
Carrier Calculated Shipping
Since Shopify knows the zip code of your shipping location, the buyer's shipping address, and the weight of your products if you entered them, it can get a real-time shipping quote from FedEx, UPS, or USPS and present those services to the customer at checkout.
A forced reversal of funds when a transaction is disputed by a customer through their credit card company.
Click Through Rate (CTR)
The percentage of people who view an ad, email, or landing page and click the call to action.
Content Management System (CMS)
Software which lets you (or your team) easily manage information on a website. Shopify has features of a CMS.
When an anonymous visitor converts into a customer by placing an order.
Conversion Funnel
The series of interactions that take someone from visitor to customer. This can involve PPC ads, remarketing, email, and more.
Conversion Rate
The percentage of visitors who make a purchase.
Conversion Rate Optimization
The practice of making a site more conducive to purchasing.
Offering related items to a customer to increase Customer Lifetime Value. For example, if customer bought a camera, send an email with a sales on a related accessory like a tripod.
Cascading Style Sheets (CSS) is a language used for describing the appearance of a webpage.
Customer Lifetime Value
The net profit of a customer's purchases with your store, or the predicted value of a customer's future purchases.
Cyber Monday
The first Monday after Thanksgiving is considered one of the biggest shopping days in the US.
The process of writing code. Someone who creates a webpage is a developer.
Discount code
In Shopify, coupons are called discount codes and can be configured in lots of ways.
A website's name is it's domain name. For example, this site's domain name is
A fulfillment process in which the manufacturer or distributor sends the goods directly to the customer. The storeowner never sees or stores them.
Enterprise Resource Planning (ERP)
A suite of software tools used by larger businesses to track resources. For ecommerce, ERP is typically focused on inventory.
Free Plus Shipping
An effective marketing strategy in which a product is given away for free but the customer pays shipping & handling.
Hyper Text Markup Language is used to describe the content of webpage or email. Effective HTML separates style from content.
A scripting language used in conjunction with HTML and CSS to add functionality to a webpage.
Landing page
Typically a page designed for a new visitor to "land" on. An effective landing page has a single call-to-action or objective.
Lead Magnet
An email list building tactic that involves giving away something of value in exchange for the visitor's email address. In ecommerce, this is usually a discount code, but could also be a free guide or report related to the niche.
Lifecycle Emails
Automated email sequences triggered by a customer's behavior. This improves the relevancy of your marketing message.
An open-source template language created by Shopify. It is the backbone of Shopify themes and is used to load dynamic content on storefronts.
Long Tail
A theory that our culture and economy is increasingly shifting away from a focus on a relatively small number of mainstream products and markets and instead toward a huge number of niches.
The net profit of a product is called the margin.
A specialized but profitable corner of the market. Specialists earn more than generalists because they're known within a niche.
Open rate
The percentage of recipients who open an email.
Payment Gateway
The service used to process credit cards. We suggest Shopify Payments.
PPC – Pay per click
A type of advertising in which you only pay when someone clicks on an ad. Google and Facebook are popular PPC networks.
Product Bundles
The practice of encouraging customers to buy related items together, sometimes at a discount.
Product Ladder
A strategy to determine what products to carry. It's easier to sell consumers on a low cost item, then subsequently more expensive items, than it is to sell an expensive item to a new visitor. This can increase both average order value and customer lifetime value.
A technology to market to people who have visited your website. For example, a visitor may see an ad on Facebook for a product they browsed on a Shopify store but didn't purchase.
Responsive Design
An approach to web design in which the website's design responds to the limitations of the device its on. Primarily this refers to the layout of a page, but it can also respond to other factors such as display density, orientation, and media.
A marketing strategy which involves dividing a broad target market into subsets of customers that have common interests, and then designing more relevant strategies to target them.
The practice of visiting a store in order to examine a product before buying it online at a lower price.
Site Map
A machine-readable index of all the pages on a website used by search engines.
Software as a Service (SaaS)
The subscription business model used by Shopify.
The process of moving a customer "up" your product ladder.
URL Redirect
To prevent broken links, a URL redirect sends visitors and search engines to updated link. This process is semi-automated in Shopify.
The perceived measure of how easy to use a website is. Removing distractions and following conventions improves usability.
Wholesalers sell directly to retailers at a discount. Wholesale pricing is often based on order quantity, with a minimum.
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