By: Richard - Last Updated: August 7, 2026

New to dropshipping and keep running into terms like MOQ or ROAS? Maybe you've seen 3PL or COGS too. You're in the right place.

This glossary explains 100 common dropshipping and ecommerce terms in plain English. Use the section links below or your browser's Find on page feature to jump straight to the term you need. On desktop, Ctrl+F or Cmd+F opens it.

You don't need to memorize all of them. If you're new, start with the 12 terms in the box below. Come back whenever something unfamiliar shows up.

1. Dropshipping and business models

AliExpress. A global online marketplace where shoppers buy from third-party sellers. Dropshippers often use it to find products and suppliers, although seller quality and shipping options vary.

Branded dropshipping. A version of dropshipping where your store uses its own branding on elements such as packaging, inserts, or the product itself when the supplier supports it.

Business-to-business (B2B). A transaction where one business sells a product or service to another business.

Business-to-consumer (B2C). A transaction where a business sells directly to an individual customer.

Direct-to-garment (DTG). A printing method that applies ink directly to fabric with a digital printer. It is commonly used for print on demand clothing.

Dropshipper. A retailer or store owner who uses dropshipping to fulfill customer orders.

Dropshipping. A retail fulfillment method where you sell products without keeping them in stock yourself. After a customer orders, a third-party supplier fulfills and ships the order.

Ecommerce. The buying and selling of products or services online.

General store. An online store that sells products across several categories instead of focusing on one narrow niche.

High-ticket dropshipping. Dropshipping higher-priced products, usually with larger order values and a longer customer decision process than low-cost impulse products.

Merchant. A person or business that sells goods or services to customers. In ecommerce, the merchant is usually the business accepting the customer's payment.

Niche store. An online store focused on a specific audience or market. It might center on one product type, hobby, or problem.

One-product store. A store built mainly around one product or one closely related product line.

Print on demand (POD). A fulfillment model where a product is printed or produced after a customer places an order. It is commonly used for custom clothing and products such as mugs or posters.

Private label. A product manufactured for one retailer to sell under its own brand. The retailer often has more control over product specs and packaging than with a white-label product.

White label. A ready-made product a manufacturer offers to multiple sellers who can add their own branding. Product changes are usually limited compared with private label.

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2. Products, suppliers, and sourcing

Backorder. An order for a product that is temporarily out of stock but is expected to become available again.

Bulk. Buying or ordering a large quantity of products at once, often in exchange for a lower unit price.

Cost of goods sold (COGS). The direct cost of the products you sold during a period. For a dropshipping store, this commonly includes the amount paid to the supplier for fulfilled orders.

Landed cost. The total cost of getting a product to its destination. It can include the product cost and shipping. It may also include duties and insurance plus customs fees or other import costs.

Manufacturer's suggested retail price (MSRP). The retail price a manufacturer recommends for a product. Retailers are not always required to sell at that price.

Minimum order quantity (MOQ). The smallest quantity a supplier or manufacturer is willing to sell in one order.

Product research. The process of evaluating products before deciding what to sell. You might look at demand and competition as well as margins and shipping. Supplier availability and the problem the product solves can matter too.

Sourcing. The process of finding and evaluating products, manufacturers, or suppliers for your store.

Sourcing agent. A person or company that helps find suppliers or products. An agent may also help with negotiation and quality checks plus consolidation or fulfillment.

Supplier. A business that provides the products you sell. In dropshipping, the supplier may also store and pack the products before shipping them to your customers.

Wholesale price. The price charged when products are sold to another business for resale, often at a lower unit price than the retail price.

Wholesaler. A business that sells products in larger quantities to retailers or other businesses rather than mainly selling to end customers.

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3. Orders, fulfillment, and shipping

Fulfillment center. A facility where products are stored before orders are picked and packed. The orders are then shipped to customers.

Inventory management. The process of tracking stock levels and product availability. It also covers reordering and the movement of inventory.

Lead time. The time between starting a process and completing it. In sourcing, it often means the time from placing an order with a supplier until the goods are ready or received.

Logistics. The planning and movement of products through storage and transportation. It also covers fulfillment and delivery.

Order fulfillment. Everything that happens after an order is placed to get it to the customer. It can include processing and picking plus packing, shipping, and delivery.

Order management system (OMS). Software that helps manage orders across sales channels. It can track inventory and payment status plus fulfillment, returns, or cancellations.

Processing time. The time between receiving an order and having it ready to ship. It is separate from the time the package spends in transit.

Return. When a customer sends a purchased product back to the seller or designated return location.

Refund. Money returned to a customer after a purchase is canceled, returned, or otherwise approved for reimbursement.

Reverse logistics. The process of moving products from the customer back through the supply chain. This can cover returns and repairs as well as recycling or disposal.

Shipping. The process of transporting a product from the sender to the destination.

Shipping time. The time a package spends in transit after it has been shipped. Do not confuse it with processing time.

Stock keeping unit (SKU). An internal code used to identify a specific product or product variant in your inventory or catalog.

Third-party logistics (3PL). A company that handles logistics services for another business. Services can include warehousing and inventory management plus packing, shipping, or returns.

Tracking number. A unique shipment reference that lets you and the customer follow a package through the carrier's tracking system.

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4. Store, checkout, and customer experience

Abandoned cart. A shopping cart where a customer adds one or more products but leaves before completing checkout.

Accessibility. Designing a website or digital experience so people with disabilities can use it. This includes people who rely on keyboards, screen readers, or other assistive technology.

Average order value (AOV). The average amount customers spend per completed order. A common formula is total revenue divided by the number of orders.

Bundling. Selling two or more products together as one offer, sometimes at a lower combined price than buying each product separately.

Cash on delivery (COD). A payment method where the customer pays when the order is delivered instead of paying in advance online.

Checkout. The part of the buying process where the customer confirms the order and enters delivery details. They then choose a payment method and complete the purchase.

Cross-selling. Recommending a related or complementary product in addition to what the customer is already considering or buying.

Payment gateway. Technology that securely captures and sends payment information from the checkout to the payment-processing system. Many ecommerce payment providers bundle gateway and processing functions together.

Payment processor. A service that handles the transaction between the merchant, payment networks, and financial institutions so a customer payment can be authorized and settled.

Pop-up. A message, form, or offer that appears over or within a webpage. Ecommerce stores often use pop-ups for email signup, discounts, or announcements.

Upselling. Encouraging a customer to choose a higher-priced version, upgrade, or larger option than the one they were originally considering.

User interface (UI). The visible controls and elements a person interacts with on a website or app. Examples include buttons and menus as well as forms or navigation.

User experience (UX). The overall experience someone has while using a website, app, or product. It includes how easy the experience is to understand and use.

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5. Marketing and content

A/B test. A test that compares two versions of something, such as a headline or landing page, to see which performs better for a chosen metric.

Affiliate marketing. A marketing arrangement where a person or publisher earns a commission for referring a customer or generating another agreed action for a business.

Call to action (CTA). A prompt that tells the reader or shopper what to do next. Examples include "Add to cart," "View products," and "Subscribe."

Conversion. A completed action you want a visitor to take. A purchase is a common ecommerce conversion, but a signup or other tracked action can also count.

Conversion rate. The percentage of visitors or sessions that complete a chosen conversion. The exact denominator depends on how your analytics setup defines the metric.

Conversion rate optimization (CRO). The process of improving a website or funnel to increase the percentage of visitors who complete a desired action.

Google Trends. A free Google tool that shows relative search interest for terms over time and across locations. It does not show exact search volume.

Keyword. A word or phrase people search for online. In SEO and advertising, keywords can help connect content or ads with those searches.

Landing page. A page designed around a specific campaign or offer. It can also focus on a product or action. Visitors often reach it from an ad or email as well as a social post or search result.

Meta description. An HTML description that summarizes a webpage. Search engines may use it as the text snippet under a result, but they can also generate a different snippet.

Organic traffic. Visits you earn without paying directly for the click, such as traffic from unpaid search results or unpaid social posts.

Paid traffic. Visits generated through paid advertising or other paid distribution.

Retargeting. Advertising to people who previously interacted with your website or store. It can also use previous app or content interactions. Some platforms call this remarketing.

Search engine optimization (SEO). Improving a website and its content so it can be discovered and understood more easily by search engines and earn relevant unpaid search traffic.

Search engine results page (SERP). The page a search engine shows after someone enters a query. It can contain webpages and ads plus images or videos. Shopping results and other features can appear too.

Unique selling proposition (USP). The clearest reason a customer should choose your product or offer instead of the alternatives.

User-generated content (UGC). Content created by customers or other users rather than by the brand itself. Examples include photos and videos as well as reviews or social posts.

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6. Advertising and analytics

Attribution. The method used to assign credit for a conversion to marketing touchpoints. Those touchpoints can include ads and emails as well as searches or referrals.

Bounce rate. A measure of sessions with little or no engagement. In Google Analytics 4, bounce rate is the percentage of sessions that were not engaged sessions.

Click-through rate (CTR). The percentage of impressions that result in a click. It is commonly calculated as clicks divided by impressions multiplied by 100.

Cost per acquisition (CPA). The average amount spent to generate a defined acquisition or conversion. What counts as an acquisition depends on the campaign setup.

Cost per click (CPC). The average amount paid for a click on an advertisement.

Cost per thousand impressions (CPM). The cost of 1,000 ad impressions. CPM measures exposure, not the number of clicks an ad receives.

Customer acquisition cost (CAC). The average cost of acquiring a new paying customer. A business may include marketing and sales costs in the calculation.

Customer lifetime value (CLV or LTV). An estimate of the value a customer generates over the full relationship with a business. The exact calculation can use revenue, gross profit, or another value measure.

Gross margin. The percentage of revenue left after subtracting cost of goods sold. It shows how much remains before other operating expenses are taken into account.

Key performance indicator (KPI). A metric chosen because it helps measure progress toward an important business or campaign goal.

Pay per click (PPC). An advertising model where the advertiser pays when someone clicks the ad.

Profit margin. The percentage of revenue that remains as profit after the costs included in that particular margin calculation are deducted.

Return on ad spend (ROAS). Revenue attributed to advertising divided by ad spend. For example, $500 in attributed revenue from $100 in ads equals a 5x ROAS.

Return on investment (ROI). A measure of profit or loss relative to the amount invested. Unlike ROAS, ROI is not limited to advertising revenue.

UTM parameter. A tag added to a URL so analytics tools can identify information such as the traffic source, campaign, or medium.

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7. Ecommerce technology and data

Application programming interface (API). A defined way for software systems to communicate and exchange data with each other.

Content delivery network (CDN). A distributed network of servers that delivers website files from locations closer to visitors to improve speed and reliability.

Content management system (CMS). Software used to create and organize website content. It also helps you edit and publish content without building every page directly in code.

Comma-separated values (CSV). A plain-text file format used to store rows and columns of data. Ecommerce platforms often use CSV files for product, order, or customer imports and exports.

Domain name. The human-readable address used to reach a website, such as dodropshipping.com.

Secure Sockets Layer / Transport Layer Security (SSL/TLS). Technology used to encrypt data sent between a browser and a website. People still commonly say "SSL," but modern secure web connections use TLS.

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8. Payments, tax, privacy, and compliance

Tax, privacy, and payment rules can vary by country and business setup. Treat these as general definitions rather than legal or tax advice.

Chargeback. A payment reversal initiated through the cardholder's bank or card issuer after a transaction is disputed. The merchant can usually respond with evidence before the case is decided.

Dispute. A formal challenge to a card transaction. A dispute can lead to a chargeback if it is not resolved in the merchant's favor.

General Data Protection Regulation (GDPR). The EU data-protection regulation that sets rules for processing personal data and gives individuals rights over that data. It can apply to businesses outside the EU in certain situations.

Payment Card Industry Data Security Standard (PCI DSS). A security standard with technical and operational requirements for protecting payment account data. It applies to organizations that store or process cardholder data. It can also apply to organizations that transmit the data or affect its security.

Sales tax. A consumption tax commonly added to eligible sales in jurisdictions that use a sales-tax system. The rules for when an ecommerce seller must collect it depend on the location and applicable tax laws.

Value-added tax (VAT). A consumption tax used in many countries and applied at stages of the supply chain. Ecommerce VAT obligations depend on where goods are sold, where customers are located, and the rules that apply to the transaction.

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Final thoughts

Dropshipping has a lot of jargon, but most of it gets easier once you see how the terms connect.

For example, your supplier affects your processing time and shipping time. Those costs feed into your landed cost and profit margin. Your ads then add metrics like CPC, CPA, and ROAS on top.

So use this page as a reference, not a study guide. Come back when you run into a term you don't recognize.

Notice something missing or think one of the explanations could be clearer? Let us know here.

If you're still deciding whether dropshipping makes sense for you, the dropshipping checklist is a good next step.