Account Receivable
In bookkeeping, the account showing any funds due to the store, usually from customer charge accounts.
Accounts Payable
In bookkeeping, the account showing the amounts owed to others, usually for goods and services.
Accrual
In accounting, tracking expenses in advance of the date they are due, as opposed to cash accounting.
Actual Cost
On invoices, the billed cost less any discounts.
Ad Allowance
Reimbursement, in the form of cash or merchandise credit, for a portion of the cost of advertising a vendor's product.
Ad Slicks
Advertisements and illustrations for ads provided to retailers by the vendor, usually on glossy paper and camera ready.
Add-on Sale
Suggested additional items to go with the ones being purchased.
Adjacencies
Placing related merchandise near each other on the sales floor to encourage impulse purchases.
Advance Order
A purchase order placed far in advance of the ship date. Since these orders help vendors forecast their needs, early-buying discounts and other incentives are sometimes offered.
Anchor
A department or discount store large enough to draw a significant number of customers to a shopping center.
As Ready
A term on a purchase order that indicates the merchandise should be shipped when available.
Assets
In accounting, any goods and money owned by an individual or company.
B
Back Order
Merchandise not available when the first part of an order is sent. It is then shipped seperately at a later date. Abbreviated as BO.
Balance Sheet
A financial statement showing the total assets and total liabilities of the business, added together to give the business's net worth.
Bar Code
A universal product code that can be machine read. It shows the distributor's number as assigned by the Uniform Product Code Council and also identifies the individual item so that a price can be assigned to that item in the store's point-of-sale system.
Big-box Stores
Very large, no-frills discount stores.
Big-ticket, Large-ticket Items
Expensive products that mean a large sales.
BOM
Stands for Beginning of Month. The value of inventory at the beginning of the month.
Bottom Line
The profit or loss line on the income statement.
Brick-and-Mortar Store
Term for a physical retail store in a building, as opposed to an on-line site.
Bundling
Pricing two or more items together as a unit. Can be used to offer customers a savings or to add markup without customers noticing.
Business Plan
A written budget and statement of intent outlining a plan for creating and sustaining a new business.
Business to Business (B2B)
A web site or service marketing or selling from one business to another, rather than selling or marketing to consumers.
Buying Group
An association of independent stores that come together to purchase merchandise in quantity in order to get better prices, terms and selection.
C
Call Tag
Authorization to return merchandise with the shipping being paid by the company requesting the return. Often referred to as "sending a call tag."
Camera-Ready Art
Ads or other items to be printed that are already assembled in a form that can be printed without further alteration.
Cancel Date, Cancellation Date
The date after which you no longer want a merchandise order to be shipped. You have the right to refuse any goods sent after that date.
Carrying Charge
Interest on unpaid balances.
Carrying Cost
The expense of having money tied up in inventory items as well as providing storage and display space for them.
Carryover
Merchandise left after most of an order has been sold or after a season has ended.
Case Pack
A full carton of a single item, sometimes specified as the minimum quantity that can be ordered of that item. Vendors allowing less than case pack orders (broken case packs) sometimes give lower prices on full case packs.
Cash and Carry
A trade show or warehouse that allows merchandise to be purchased right then and carried out rather than being ordered and shipped. Also called immediate delivery.
Cash Discount
A discount on an invoice when the bill is paid on receipt of the goods or earlier than the due date.
Cash Flow
The need to generate enough money from sales to pay the bills.
Cash Wrap, Cash Wrap Counter
The checkout area where customers conduct transactions and have their purchases put in bags or boxes or gift wrapped.
Charge-back
Retailer deductions from a vendor's invoice for breakage, freight allowance, advertising, shortages, and so on.
Classification
An assortment of related merchandise grouped together within a store. Also called a category or department.
Closeouts
Discontinued merchandise sold by wholesale vendors at a discount. Closeouts often represent a good opportunity to add greater markup as well as offer the goods to customers at a more attractive price.
Common Area
Shared public areas in a shopping center, such as the hallways, restrooms, and parking lot.
Common Area Maintenance
A term in a lease that refers to paying for the upkeep of sections of a mall or shopping center shared by all the tenants.
Common Carrier
Long-haul trucking company using semi trucks to transport large shipments of goods to various delivery points. Also called a less than truckload (LTL)shipper.
Consignment
Merchandise displayed in a store, by a third party, that is not paid for by the store owner until the items are sold. Typically, a store owner will take items on consignment and when the item is sold, the artist or manufacturer will receive a percentage of the sale and the store owner will receive the rest.
Cooperative Advertising
Advertising costs shared by a vendor and retailer, or sometimes by several retailers in an area.
Cost
The wholesale cost of merchandise.
Cost Averaging
Basing the retail price of an item on the median of two different wholesale prices, usually the standard price and a discounted price.
Cost of Goods Sold (COGS)
A calculation of the total wholesale cost of merchandise that has been sold, taking into account shipping costs and markdowns.
Cost Per Thousand (CPM)
A term often used in advertising for measuring costs against number of readers/viewers.
Counter Cards
Freestanding in-store signs, often with easel backs, that promote a certain line of merchandise or announce a promotion.
Credit References
Data provided by a store owner to a new vendor in order to apply for net-30 or other favorable payment terms.
Cross Merchandising
Displaying complementary items together in one grouping, such as mixing a coastal-themed table runner with ocean blue candles or shell candleholders.
Customer Relationship Management (CRM)
Maintaining detailed information on customers, such as contact information, purchase history, preferences, etc., in order to improve customer service.
Cyber Monday
The Monday after Thanksgiving, one of the busiest online shopping days of the year.
D
D & B
Abbreviation for Dunn & Bradstreet, a credit reporting firm that provides ratings based on statistics provided by the business and its vendors.
Dated Order
A purchase order with a specific ship date.
Dating
Delayed payment terms, usually a special arrangement in which seasonal merchandise is not paid for until close to the time the merchandise is sold.
DBA
A term used to identify the business name an individual is using. Abbreviation of "do/does business as."
Deep and Narrow
A way of ordering merchandise in which you order a small variety of items but in large quantities. Opposite is shallow and broad.
Delivery Date
The date merchandise ordered should arrive in the store.
Destination Store
A shop that customers will make a special trip to visit, usually spending several hours at the store.
Discount
Selling merchandise at a price less than the normal markup.
Display Ad
A print advertisement that uses graphics or pictures.
DOI
Abbreviation for Date of Invoice
Double-entry Bookkeeping
A system of accounting that uses checks and balances to ensure accuracy. Every entry is listed both as a credit and a debit.
Drop Ship
To have merchandise sent directly from a vendor to the customer without going to the store first. Often used for personalized items.
Dump Bin
A freestanding disposable display unit, generally provided by the vendor, in which one large bin is used for a single type of merchandise.
E
E-commerce
Selling merchandise through a web site or via the Internet
Electronic Data Interchange (EDI)
A way of sharing data electronically rather than on paper. For instance, a link between a store's POS system and a vendor's computerized ordering system in which reorders can be placed automatically.
Electronic Funds Transfer System (EFTS)
A financial transaction in which funds can be immediately transferred from one account into another.
End Cap
Ends of long shelving units or freestanding gondola displays on which merchandise is highlighted. End caps are often at the end of aisles and are meant to attract customers' attention to certain products or promotions.
End of Month (EOM)
Inventory value at the end of the month, or an invoice payment term that means the bill is due at the end of the month in which the shipment was made
Exclusive
A merchandise line or item that is promised not to be sold to a nearby competitor or to other stores within a certain amount of time, or an item that is only availabole through one supplier as opposed to trade goods.
Expense
The cost of certain items, such as rent and utilities, that are needed to run a business, as opposed to the items sold through the business.
F
FICA
Abbreviation for Federal Insurance Contributions; social security taxes
Fixed Costs
Costs that are consistent from month to month, such as rent. Variable costs, such as utilities, can change.
Fixture
A piece of furniture or unit used to display merchandise.
Foot Traffic
The amount of pedestrians that pass by your door.
Free on Board (FOB)
The point at which shipping costs begin to the responsibility of the store rather than the vendor, usually written with the city or town that the shipment originates from.
Freight Allowance
Credit from a vendor toward shipping costs. Full freight allowance means that the supplier will pay the entire shipping cost. A percentage freight allowance is figured on the value of the goods.
Freight Claim
Request for reimbursement from a shipping company for goods lost or damaged during transit.
Frontage
The length of the store that faces a public street.
Fulfillment
The process of a vendor receiving and shipping an order received by a retailer.
G
Gift With Purchase (GWP)
A free item, generally inexpensive, given to a customer with the purchase of a specific item. Used as a buying incentive.
Gondola
A type of display unit that is a freestanding rectangular shape with shelves or hooks on the long sides.
Gross
Gross profit or gross margin, which is the net sales less the cost of goods sold (COGS; profit before operating expenses.
Guaranteed Sale
A term used by vendors indicating that they will take back any merchandise that is not sold by a specific time.
H
Hard Goods
A type of merchandise that has hard sides, such as major appliances.
Header or Header Card
A sign at the top of a display or fixture showcasing the merchandise in the display, often interchangeable.
I
Impulse Items
Inexpensive merchandise, often kept near the register, that customers buy on impulse; helps increase total sale.
In the Black / In the Red
Terms used to refer to a business being profitable (in the black) or not (in the red.
Inventory
The merchandise a store has to sell; as a verb, refers to conducting inventory, tallying every item in the store.
Inventory Turn
A mathematical equation that determines how many times a store's merchandise is sold and replaced within a certain period; inventory turn is calculated by taking the cost of inventory at a beginning point, adding cost of purchases, subtracting cost of inventory at the ending point, and dividing by the cost of sales.
Invoice
A bill for merchandise or services
K
Keystone
A standard markup of 100 percent of the wholesale price. For instance, an item bought for $10 wholesale would be marked up to $20 retail using keystone.
Kiosk
A small stand-alone structure that can be used as a point-of-purchase or information booth in a store or as a full-service retail location.
Knocked Down (KD)
Merchandise sold unassembled, especially display pieces or furniture
L
Layaway
Holding merchandise for a customer to purchase at a later date; usually the store owner takes a down payment and allows the customer to make payments over time.
Layout
The allocation of merchandise and display fixtures on a store's floor plan.
Lead Time
The time between when an order is placed and when it arrives.
Liabilities
An accounting term meaning anything that is owed by a company.
Licensed Product
Merchandise with a design or image that is created by another person or company and which a licensing fee has been paid to the owner of the rights.
Lien
A claim made on a property or business as security for debt.
Lifestyle Center
A shopping center designed to look like an open street or neighborhood with the stores and restaurants opening to the outside rather than to a central building; often enhanced with landscaping, benches, etc.
Limited Liability Company (LLC)
A form of business in which the responsibility of the owners/shareholders is limited to the amount each has invested in the company.
Limited Partnership
A business form in which the partners are investors only and do not participate in the operation or management of the business; partners' liability is limited to the amount of their investment.
Line of Credit
A preapproved loan amount that can be drawn on as needed.
Liquidity
How easily assets can be converted into cash.
List Price
Manufacturer's suggested retail price.
Loss Leaders
Merchandise advertised at a low markup in order to attract customers; store owners may lose money on these items but gain by the other merchandise the customer buys when they come in the store.
M
Margin
The difference between an items' total cost and its retail price. For example, an item that is $5.50 at cost and sells for $12 retail would have a margin of $6.50.
Markdown
The difference between the original retail price and a reduced price. If a store owner marks a $10 product at 20% off, the markdown would be $2.
Markup
The amount added to the wholesale price of an item to reach the retail price, usually expressed in percentage. For instance, an item that costs $10 at wholesale and sells for $20 retail would have a 100 percent markup.
Merchandising
The act of buying and displaying goods to sell.
Minimum Order
The lowest dollar amount or quantity of merchandise that a vendor will accept for a wholesale order; an opening minimum order is the minimum required on the first order with that company.
Mystery Shopper
A person who anonymously evaluates a store; storeowners will often hire mystery shoppers to review their customer service, displays, etc.
N
Net
On financial statements, net refers to net profit, which is the gross profit less all operating expenses. On invoices, net is used to express when the entire amount is due in terms of number of days; for instance, net 30 means the money is due 30 days after the invoice date.
Net Lease
A lease in which the store owner pays for some costs in addition to the basic rent.
Niche Store
A small specialty store that focuses on a specific category.
NSF
An abbreviation for nonsufficient funds; what banks will stamp on checks that don't clear, meaning not enough money was in the account.
O
Occupancy Cost
The total amount paid to lease space; includes such items as rent, utilities, percentage of sales.
Off-Price
An inventory term that refers to merchandise, often closeouts, that is bought at lower than normal wholesale prices; off-price merchandise can usually generate good profit margins.
Offset
Term meaning compensation, usually in free merchandise, for the cost of an item such as a display unit.
OH
Abbreviation for On Hand, an inventory term meaning product currently in stock.
Open Order
A purchase order that is still waiting to be shipped.
Open Stock
Merchandise sold individually rather than in a set.
Open to Buy (OTB)
A way of budgeting merchandise orders for a specific time period. Your open-to-buy dollar amount tells you how much you can spend during that time period based on your starting inventory and projected sales.
Opt-In, Opt-Out
Term used in electronic marketing, such as e-mails or e-newsletters; customers can opt-in, which means they specifically ask to receive the information, or opt-out, in which case they request not to receive the information.
OS
Abbreviation for Out of Stock, an inventory term meaning that particular merchandise is not available or not in the store.
Outsourcing
Paying an outside company to handle something that could be done in-house, such as payroll.
Overhead
The expenses needed to operate a business, such as utilities, insurance, rent.
P
Packing Slip
A printed sheet included with a shipment showing the merchandise shipped; may also show any items that are back ordered or canceled; usually doesn't include prices.
Partnership
A legal form of business in which two or more people are responsible for the assets and liabilities of the business.
Perceived Value
The price of an item based on what the customer would perceive is a fair price.
Percentage of Sales
In leases, the rent based in part on the store's total sales.
Plan-o-Gram
A floor layout for merchandise; sometimes a suggested layout received from a vendor for a certain line of goods.
PLU
Abbreviation for price look up, a computerized method of checking prices that are programmed into a POS system.
PO
Abbreviation for purchase order.
Point of Purchase (POP)
Displays, signs or other materials that are often provided by a vendor to help sell a certain product.
POS System
Abbreviation for point-of-sale system, a computerized cash-register system that collects data on inventory, sales, customer information, etc.
Prepaid
Merchandise paid for before being shipped.
Pre-ticketing
Putting a store's retail price and codes on merchandise before it is shipped by the vendor.
Price Point
A specific price or price range. Stores might carry merchandise in the $10 price point, or state that a specific product line is a good price point.
Private Label
Merchandise that carries a label with the store's name on it; the products are manufactured by a vendor for any store, but each store's items have the custom label
Pro Forma Invoice
An invoice to be paid before the merchandise is shipped; same as prepaid.
Profit and Loss Statement (P&L)
A financial statement that shows the store's income and expenses.
Proprietary Credit Card Program
An in-house charge account for customers with credit cards created with the store's name.
Purchase Order
A listing of products being ordered stating the product numbers, quantities, payment terms, delivery information and wholesale prices.
R
Ready to Assemble (RTA)
Merchandise sold unassembled; often furniture.
Receipt of Goods (ROG)
An invoice term that is used to determine the date the bill must be paid. For instance, net 30 ROG means the bill must be paid 30 days from the date the goods are received.
Receivables
Money owed the business, such as payments from customers paying on credit; considered assets in financial terms.
Receiving
An area in a store where shipments arrive and are processed.
Reconcilliation
At the end of the day, making sure the total cash, checks and charges match the register's totals, or when reviewing bank statements, making sure the statements are correct.
References
Companies from which you have purchased items on credit that are willing to share their history with other suppliers to establish your credit.
Resale Number
A state-issued identification number that allows a business to buy merchandise to resell without paying sales tax on it.
Restocking Charge
A fee charged for taking back merchandise.
Retail Price
The price a store owner places on an item when they offer it for sale to the consumer; it is determined by taking the wholesale price and adding a markup.
Return Authorization (RA) Number
A code number that shows that the vendor will take back the merchandise.
Return on Investment (ROI)
The financial gain from a business move or advertisement taking into account the amount invested into it.
RFID
Abbreviation for Radio Frequency Identification; an electronic method of collecting data in which an electronic tag or chip is attached to an item and a transponder records the data as the chip is based by. RFID technology can be used to track orders, control inventory, check prices, etc.
S
Sales Floor
The area in a store in which products are displayed for sale.
Sales Per Square Foot
A figure that can be used to analyze sales and profitability. It is derived by dividing the annual retail sales by the number of square feet of selling space in the store.
Sales Rep
A person that presents wholesale lines to store owners and takes orders for merchandise. A sales rep can represent one or more lines.
Same-Store Sales
A way of analyzing sales data when you have more than once location. Same-store sales compare sales of one location with the past results of that same location, rather than comparing sales of one location with sales from another location.
Secondary Market
Merchandise that is sold again after it has already been purchased once at the retail level. Collectibles are often sold on the secondary market.
Sell-Through
How well an item or line sells in a store. If a product takes a long time to sell through, it might not be a good option for your store.
Shelf Life
The length of time an item can sit on display without going bad. Specialty foods, especially, will have certain shelf lives.
Ship Date
The date on which merchandise ordered is to be shipped; vendors may indicate a ship date on seasonal merchandise.
Shopping Cart
In e-commerce, software used on a web site that allows shoppers to store items they want to purchase and then buy them at one time via the web.
Short, Shortage
Items missing from an order that are listed on the invoice or packing slip as having been included.
Show Special
A reduced price, special promotion, special merchandise or discount offered by vendors for merchandise ordered at a trade show.
Showroom
An area in a building that has a permanent display of wholesale products. Vendors can have showrooms in permanent display centers or showrooms on their own property.
Shrinkage
A decrease in inventory levels because of theft, breakage, etc.
SKU
Abbreviation for Stock-Keeping Unit, a term referring to products that are the same style, color and size. For instance, a store might have 100 candles on sale, but only 10 different fragrances. So it would have 10 SKUs of those candles.
Slatwall
A wall surface used in stores that has horizontal grooves in which hooks and shelves can be inserted at any position to hold merchandise.
Soft Goods
Products with soft surfaces, usually made of fabric, such as pillows, linens, etc.
Sole Proprietorship
A business form in which the business is owned by one individual and that person assumes all liability.
Spot
An advertising term used in radio or television advertising. A 30-second spot would be a 30-second-long commercial.
Stock Rotation
The act of moving older stock to a forefront position to sell it before the newer stock.
Stockroom
An area of a store for unpacking and storing merchandise; some retailers have an off-site stockroom.
Strip Mall
A shopping center in which all the stores are in a row and each one has an outside entrance.
Suggested Retail Price (SRP)
The price the manufacturer recommends that the item should be sold at.
T
Tag Line
A short slogan that defines a store's identity, or a few short words used in conjunction with a print ad or on the last few seconds of a radio or television ad.
Target Market
The main group of customers to which you are aiming to sell; a target can be defined in demographics (20-30 year olds), income (households with more than $70,000 in annual income), etc.
Tender
The method of payment used by a customer or accepted by a business; cash, checks, and charge are all legal tender.
Terms
The specifics of how and when a vendor is paid for merchandise, such as COD, net 30, etc.
Till
The money in the cash register.
Trade
Term referring to someone in the business. For the Trade Only means that only people involved in the wholesale or retail end of the business can participate.
Trade Goods
Merchandise that is generally made in China and other countries that is available from several different importers so it is not exclusive to one company.
Trade Show
An event in which vendors display their wholesale merchandise and only qualified buyers are allowed to attend.
Tradeout
Swapping goods or services for advertising; for instance, a store might provide merchandise for a charity auction as a tradeout for a free advertising spot.
Triple Net
A type of lease in which the tenant pays rent plus operating expenses, maintenance, repairs, and taxes; also called net-net-net lease.
Trunk Show
A special display of merchandise from a designer or sales rep, usually clothing or jewelry, that is shown for just a short time.
U
UPC
Abbreviation for Universal Product Code, the machine-read bar code identifying the item.
Upselling
Suggesting additional items or a better-quality item to a customer in order to increase the amount of the sale ticket.
V
Value Added
A term used to identify enhancing a shopping experience or increasing the worth of a transaction. A store that offers a free service, such as gift wrapping or delivery, with the purchase of an item would consider to have value-added service.
Vendor
A company that sells merchandise at a wholesale level, such as a manufacturer or importer.
Visual Merchandising
The art of displaying products to attract attention and encourage customers to purchase the items.
W
Wholesale Price
The price paid by a store for supplies or merchandise; the wholesale price is lower than the retail price.