Commerce Wiki

Stock Keeping Unit — a unique alphanumeric identifier assigned to a single sellable variant. Every distinct size, color, or configuration gets its own SKU. It is the atomic unit of inventory management and fulfilment.

A specific, purchasable form of a configurable product — for example, 'Blue / XL / Cotton'. Variants share a parent product record but each have independent inventory, pricing, images, and weight. A product with three sizes and four colours yields twelve variants.

A fixed set of two or more products sold as one line item. Bundles often carry a discount relative to buying constituent items separately. Inventory may be tracked at the bundle level or dynamically deducted from component SKUs at order placement.

A product that the shopper customises by selecting one or more attribute axes — size, colour, material — before adding to cart. The selection resolves to a specific variant. Configurable products exist as a UI concept; the actual inventory belongs to the resolved variant.

A product that has no physical form and therefore requires no shipping or inventory tracking — consultations, gift cards, SaaS licences. Payment is captured but no fulfilment workflow is triggered.

A digital asset — PDF, software, audio — sold as a file download. Requires access-controlled, time-limited download links to prevent link sharing. May allow multiple downloads up to a configured limit.

A recurring purchase agreement where the merchant charges the customer on a defined cadence — weekly, monthly, annually. Subscription commerce requires dunning logic, upgrade/downgrade flows, pause/resume, and cohort-level churn analysis.

Average Order Value — total revenue divided by total number of orders over a period. AOV is a primary lever in growth: lifting it 10% on the same traffic compounds across every channel. Tactics include upsells, cross-sells, free-shipping thresholds, and bundle discounts.

Customer Lifetime Value — the projected total revenue a customer generates over their entire relationship with the merchant. LTV drives acquisition spend decisions: a customer with a 3-year LTV of 24,000 justifies a much higher CAC than one with 2,000.

Customer Acquisition Cost — total marketing and sales spend divided by the number of new customers acquired in a period. The LTV:CAC ratio is the canonical unit-economics health check; a ratio below 3:1 typically indicates unsustainable growth.

Gross Merchandise Value — the total face value of all orders placed through the platform, before any deductions. GMV is a marketplace or platform-wide metric; it overstates true revenue because it includes seller payouts, refunds, and discounts.

Net Merchandise Value — GMV after subtracting cancellations, refunds, and fulfilment failures. NMV is the more honest revenue proxy for marketplace operators.

The percentage of GMV that a marketplace operator retains as revenue — typically covering payment processing, platform fees, and fulfilment services. A take rate of 12% on 1 Cr GMV yields 12 L platform revenue.

A seller-specific or category-specific percentage or flat fee charged against each completed sale. Commissions may be stacked — a base platform commission plus a payment gateway fee, for example.

A temporary hold placed on inventory at the moment a customer adds an item to their cart or initiates checkout, preventing another buyer from purchasing the same unit. Reservations must have TTL-based expiry to avoid permanently locking stock that is never purchased.

Accepting more orders than available inventory — a failure mode that results in cancellations, disappointed customers, and operational scramble. Oversell typically occurs when inventory checks and order writes are not atomic.

An order placed against zero or negative inventory, with an explicit expectation that the item will be fulfilled once stock arrives. Backorders require ETA communication, prioritised receiving workflows, and proactive status updates.

An order placed before a product is available for sale — typically for upcoming launches. Preorders often require partial or full payment upfront with a promised fulfilment date. They differ from backorders in that no prior stock existed.

A warehouse fulfilment strategy where orders are grouped into 'waves' — time-based batches — and all picks for that wave are executed simultaneously. Waves are sized to match staff capacity and despatch cut-off times.

A method where a single picker collects items for multiple orders simultaneously, visiting each bin location once per walk. Reduces travel time compared to order-by-order picking — effective for high-SKU, low-volume-per-order operations.

A variant of batch picking where the picker uses a cart with labelled compartments — one per order — and sorts items into the correct compartment at the point of pick. Eliminates a separate consolidation sort step.

First Expired, First Out — a picking rule that mandates items with the earliest expiry date are picked and despatched first. Critical for food, pharmaceuticals, and cosmetics where selling expired goods creates liability.

First In, First Out — inventory received earliest is despatched first. The default strategy for non-expiring goods; FIFO prevents old stock from being permanently buried by newer deliveries.

Last In, First Out — most recently received inventory is picked first. Uncommon in physical commerce (creates old-stock risk) but relevant in certain accounting jurisdictions for cost valuation.

Associating received inventory with a manufacturer lot number, enabling recall traceability. If a lot is recalled, the system can instantly identify all affected units: still in warehouse, in transit, or delivered to customers.

Assigning a unique serial number to every individual unit of a product — used for high-value electronics, medical devices, and warranty-critical items. Serial tracking enables precise unit-level traceability from manufacturer to end customer.

Recording the expiry or best-before date of perishable inventory at the SKU or lot level. Enables FEFO picking, near-expiry alerts, and automatic write-down workflows before stock becomes unsellable.

Third-Party Logistics — outsourcing warehousing, pick-pack, and shipping to a specialist provider. The merchant retains ownership of inventory but delegates physical operations. Integration requires real-time inventory sync, order push, and tracking number pull-back.

A model where the merchant takes the order and payment but forwards fulfilment to the supplier, who ships directly to the customer. The merchant never holds stock. Margin is the difference between retail price and supplier cost.

Fulfilling an online order from a retail store's inventory rather than a dedicated warehouse. Increases inventory utilisation and reduces last-mile delivery distance for nearby customers, often improving delivery speed.

Buy Online, Pick Up In Store — the customer purchases on the web and collects from a physical location. Requires real-time store inventory visibility, a 'ready for pickup' notification workflow, and a check-in handoff process.

A retail strategy where store associates can offer customers the full online catalogue — including items not stocked in-store — by placing orders on a tablet or POS terminal for home delivery or store pickup. Eliminates lost sales from local stockouts.

The sequence of states an order transitions through from placement to completion: PENDING (captured, not yet confirmed) → CONFIRMED (payment authorised, inventory reserved) → FULFILLED (all line items shipped or delivered) → COMPLETE (customer accepted, return window closed) → REFUNDED (partial or full refund issued). Each state triggers downstream events.

Authorisation places a hold on the customer's funds without moving money. Capture is the subsequent step that actually moves the funds to the merchant. Many merchants authorise at order placement and capture only when the order ships, reducing disputes on cancelled orders.

The final transfer of funds from the payment gateway's holding pool to the merchant's bank account. Settlement timing varies by gateway: same-day, T+1, or T+2. Marketplace platforms must split settlements between the platform and multiple sellers.

A payment reversal initiated by the cardholder's bank, typically following a dispute. Chargebacks carry fees and damage merchant health scores with payment networks. Merchants have a limited window to submit evidence contesting fraudulent chargebacks.

Data points used to assess whether an order is likely fraudulent: velocity (too many orders from one IP), address mismatch, device fingerprint, BIN country vs billing country, and behavioural anomalies. High-risk orders may be auto-cancelled or routed for manual review.

Cash on Delivery — payment is collected by the courier at the moment of delivery. Dominant in markets with low credit card penetration (India, MENA, Southeast Asia). COD orders carry higher return rates and operational cost but enable broader market reach.

A payment arrangement common in B2B commerce where the buyer pays within a defined number of days after invoice — NET 30 means payment is due 30 days after the invoice date. Requires credit risk assessment and dunning workflows for late payments.

A checkout flow where the buyer submits a Purchase Order number rather than paying immediately. The seller fulfils against the PO and invoices later. Standard in public sector and large enterprise procurement workflows.

A formal price proposal presented to a buyer before they commit to purchasing. Quotes may include custom pricing, volume discounts, or special terms. A quote-to-order flow converts an accepted quote into a confirmed order without re-entering line items.

Return Merchandise Authorisation — a formal approval allowing a customer to return a product. RMAs include a reference number, return window, condition requirements, and instructions for the courier label. They prevent unauthorised or fraudulent returns.

Synonymous with RMA — the explicit approval that a return is accepted. Distinct from refund, which is the financial step that may follow a return. Returns may be inspected before a refund decision is made.

A unified view of a customer aggregating data from every touchpoint: browsing history, purchase history, support tickets, loyalty status, email engagement, and in-store visits. The 360 view enables personalised experiences and informed agent interactions.

Segmentation of the customer base into groups by Lifetime Value — for example, the top 5% by LTV vs the bottom 50%. LTV bands inform acquisition spend, retention priority, support SLAs, and personalised reward structures.

A group of customers who share a common acquisition attribute — typically the month they made their first purchase. Cohort analysis tracks how different acquisition cohorts retain, spend, and churn over time.

A dynamic or static group of customers matching a defined set of criteria — 'customers in Chennai who purchased in the last 30 days with an AOV above 2,000'. Segments power targeted campaigns, pricing rules, and loyalty experiences.

Customer Data Platform — a system that collects, unifies, and activates customer data across channels. A CDP stitches together anonymous and identified profiles and makes unified data available to downstream tools like email, ads, and personalisation.

Recency-Frequency-Monetary scoring — ranking customers on three axes: how recently they purchased, how often they purchase, and how much they spend. RFM produces a score like '5,5,5' (best customer) that powers segmentation without predictive modelling.

A named loyalty level that a customer achieves by meeting a spend or points threshold — Bronze, Silver, Gold, Platinum. Tiers typically carry escalating benefits: higher earn rates, free shipping, priority support.

A loyalty currency earned on purchases and redeemable for discounts or rewards. Points are a proven retention mechanism but require careful design of earn rate, redemption rate, and expiry policy to avoid liability runaway.

A loyalty variant where a percentage of spend is returned to the customer as real monetary credit applicable to future purchases. Cashback feels more tangible than points and has higher perceived value, but creates a direct P&L liability.

An action that grants loyalty points or cashback — a purchase, a product review, a referral, a birthday, a social share. Earn events are defined per tenant with configurable multipliers.

The redemption of loyalty currency — applying points or cashback against an order total. Burn events reduce the loyalty liability and must be consistent even if the order is subsequently cancelled or refunded.

The process of communicating with customers about failed or overdue payments — subscription renewals, invoice settlements, instalment plans. Effective dunning sequences retry payments on a smart schedule and graduate from soft to firm messaging.

Using historical purchase patterns to forecast which customers are likely to stop buying. A customer who previously ordered monthly but has not ordered in 60 days is a churn candidate. Early identification allows intervention before the customer is lost.

A campaign targeting lapsed customers who have not purchased in a defined window. Win-back messaging typically includes an incentive — discount, free shipping, or a personalised offer — to re-engage.

The sequential stages a prospective customer moves through from first awareness to purchase — Awareness, Interest, Consideration, Intent, Purchase, Retention. Each stage has an associated conversion rate; the product of all stage rates is the end-to-end funnel conversion.

The percentage of visitors who complete a desired action — adding to cart, initiating checkout, placing an order. Measured at each funnel stage. Lifting checkout conversion from 60% to 65% adds 8.3% revenue on the same traffic.

When a customer adds items to their cart but leaves without completing checkout. Industry average abandonment is 70-80%. Recovery emails sent within one hour can recapture 5-15% of abandoned revenue.

A series of timed, conditional marketing touchpoints triggered by customer behaviour or lifecycle events. Journeys replace one-size-fits-all blasts with personalised sequences: new customer onboarding, post-purchase follow-up, re-engagement.

A message or sequence that fires automatically in response to a specific customer action or event — browse abandonment, low loyalty balance, a birthday, or a product review. Triggered campaigns have far higher open and conversion rates than batch sends.

A controlled experiment where two or more variants of a page, message, or price are shown to randomly assigned user groups. Statistical significance is reached when the observed difference is unlikely to be due to chance.

A control group deliberately excluded from a campaign or experiment to provide a clean baseline. Holdouts measure the true incremental lift of a campaign — what would have happened without any intervention.

The process of assigning credit to marketing touchpoints that preceded a conversion. Models include last-click (simple), first-click (awareness-focused), linear (equal credit), time-decay (recency-weighted), and data-driven (ML-based).

Return on Ad Spend — revenue generated per unit of ad spend. A ROAS of 4x means every rupee spent returns 4 in revenue. ROAS is the primary efficiency metric for performance marketing teams.

Cost per Mille — the cost to serve 1,000 ad impressions. A CPM pricing model is used for awareness campaigns where brand exposure is the goal rather than immediate conversion.

Cost per Click — the cost of each click generated by an ad. CPC is used in search and social advertising where the advertiser pays only when a user clicks through.

Cost per Acquisition — the total ad spend divided by the number of conversions (orders, sign-ups, etc.). CPA is a direct measure of performance-channel efficiency and is the natural complement to CAC.

Incremental Static Regeneration — a Next.js rendering strategy that pre-renders pages at build time and re-generates them in the background on demand without taking the page offline. ISR combines the performance of static HTML with the freshness of server rendering.

A serverless function deployed to a CDN edge network and executed close to the end user — often 10-50ms from the browser. Edge functions are ideal for personalisation, A/B routing, authentication checks, and geo-based redirects.

Content Delivery Network — a globally distributed network of servers that cache and serve static assets (images, CSS, JS) from locations close to the user, drastically reducing time-to-first-byte.

An HTTP callback that one system sends to another when an event occurs — an order is placed, a shipment is despatched, a payment fails. Webhooks enable real-time integrations without polling.

The property of an operation that can be applied multiple times without changing the result beyond the first application. Critical in payments and order APIs — a network retry should not result in a duplicate charge.

An architectural pattern where state changes are stored as an immutable, append-only sequence of events rather than as mutable row updates. The current state is derived by replaying events. Provides a full audit trail and enables temporal queries.

Command Query Responsibility Segregation — separating the write model (commands that change state) from the read model (queries that return data). Allows each side to be optimised independently: writes for consistency, reads for speed.

A distributed transaction pattern where a multi-step operation — place order, reserve inventory, charge payment, create shipment — is managed as a sequence of local transactions, each with a compensating action on failure. Avoids distributed locks across services.

Conflict-free Replicated Data Type — a data structure that can be updated concurrently on multiple nodes and merged without conflicts. CRDTs are foundational for offline-first applications where local state must sync after reconnecting.

Row-Level Security — a Postgres feature that enforces data access policies at the database layer by filtering rows based on the executing user's context. RLS provides a structural guarantee of tenant isolation even if application-layer bugs bypass normal query scoping.

Fine-grained permissions declared during an OAuth flow that limit what an authorised application can access. A 'read:orders' scope grants order read access without write access or customer data access.

A TypeScript-first RPC framework that generates end-to-end type-safe API contracts without a schema file or code generation step. The client infers types directly from server procedure definitions, making breaking changes a compile-time error.

A Postgres extension that adds vector similarity search — cosine, L2, and inner product — to standard Postgres tables. Enables semantic search, product recommendations, and embedding-based retrieval without a separate vector database.

A configured selling destination defined by a combination of country, currency, language, tax region, and shipping rules. A merchant selling to India, UAE, and UK is operating three markets, each with distinct pricing, tax, and content requirements.

A combination of language and region code — en-IN, ta-IN, ar-AE — that drives storefront language, date formatting, number formatting, and right-to-left text rendering.

The monetary unit in which prices are displayed and charged. Multi-currency storefronts must handle display currency (for the shopper) vs settlement currency (for the merchant's bank) and FX conversion between them.

The exchange rate between two currencies at a given time. FX rates fluctuate continuously; merchants must decide whether to lock in rates (predictable margins, FX risk for merchant) or float them (accurate pricing, potential shopper confusion from price changes).

Common Locale Data Repository — the Unicode consortium's authoritative data set for locale-specific formatting rules: number separators, date patterns, plural forms, measurement units, and calendar systems.

An HTML attribute that tells search engines which version of a page is intended for which language and region. Proper hreflang implementation prevents duplicate content penalties and ensures the correct locale ranks in each market's search results.

A geographic jurisdiction with its own tax rules — rates, exemptions, and filing requirements. Tax regions may be country-level (India GST), state-level (US sales tax), or category-level (UK zero-rated food).

Value Added Tax — a consumption tax applied at each stage of the supply chain, with businesses reclaiming VAT on their purchases. The end consumer bears the full VAT cost. Dominant in Europe, India (as GST), and the Middle East.

Goods and Services Tax — India's unified indirect tax replacing the prior VAT/service tax patchwork. GST has four rates (5%, 12%, 18%, 28%), product-level HSN code classification, and requires monthly GSTR filings.

Harmonised System of Nomenclature code — an internationally standardised product classification code used in India's GST system to determine the applicable tax rate. 6-digit codes cover broad categories; 8-digit codes are more specific.

The Harmonised System code used in international trade customs declarations. Required on commercial invoices for cross-border shipments to determine import duties and eligibility for trade agreement preferences.

Delivered Duty Paid (DDP) means the seller pays all import duties and taxes — the buyer receives the package with no surprise charges. Delivered Duty Unpaid (DDU) means the buyer is responsible for clearing customs and paying import duties.

A named classification applied to B2B buyer accounts that controls which catalogues, price lists, and payment terms they can access. A hospital buyer group might see medical supply pricing; a retail buyer group sees standard wholesale pricing.

A defined set of prices applied to a specific customer segment, buyer group, or geographic market — potentially overriding the base catalogue price. A single product may have dozens of active price lists simultaneously.

Purchase Order — a formal document issued by a buyer authorising a supplier to deliver goods or services at a specified price. POs define quantity, unit price, delivery terms, and payment terms. They create a binding commercial obligation.

The workflow converting a sales quote into a confirmed purchase order. Once a buyer accepts a quote, the agreed pricing, quantities, and terms are locked in and a binding order is created without re-entering data.

The maximum outstanding balance a buyer can carry before further orders require prepayment. Credit limits are typically set by the seller's finance team based on payment history and creditworthiness.

A structured review process where orders above a threshold — by value, by product type, or by customer — require explicit sign-off from a designated approver before proceeding. Common in enterprise procurement to enforce spend controls.

A B2B entity representing an organisation rather than an individual — with a business name, tax ID, credit terms, and multiple authorised buyer contacts underneath it. Company accounts separate personal and business identity.

An individual user who belongs to a B2B company account and can place orders on behalf of that company. Buyer contacts may have role-based permissions — some can place orders, others can only view invoices.