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Your Trusty Bank of Terminologies

It’s always nice to be in the know about the right lingo to use when doing business. We’ve rounded up the most common terms used daily in the world of wholesale, right here. You’re welcome!


ACCOUNT: Your “accounts” are your customers; in other words, an account is a store that buys your product at wholesale to then resell it at retail to their own customers.


This is a fund that vendors (you) can set aside for your customers for promotion purposes. These dollars, derived from a percentage of your customer’s order, serve to further showcase your product in a particular retail store. For example, let’s say your customer places an order for $50K and you’ve set up a 2% co-op policy. Your end of the bargain is that you will spend $1K to help that particular customer sell your product. This type of agreement is great because, typically, these dollars are spent on advertisements simultaneously promoting the product, the retailer, as well as the vendor. Yes!

ASSORTMENT: This means a variety of products available for sale.


BACK-ORDER: Products on back-order have been ordered, but have yet been shipped.

BACKSTOCK: Backstock is the assortment of products a retailer has on hand to replenish their sales floor.

BILL-TO & SHIP-TO: Fairly straightforward, the bill-to is your customer’s billing address and the ship-to is the address where you will be shipping their order to.

BUY-BACKS: Your customers may want to negotiate for you to accept to “buy back” any unsold stock. Should you agree, they’ll send you back what they could not sell, while you’ll provide a refund.

BUYER: The buyer is responsible for purchasing products to then resell them at retail; this is the person you will work with to sell your product at wholesale.


CASE PACKS: These are bundled quantities of the same product that you can offer to retailers to simplify the ordering process.

CATALOGUE OR BRANDBOOK: This is a printed or digital visual representation of your line (products) and your policies.

CHARGEBACKS: This is a form of consumer protection. Chargebacks occur when a credit card company or a financial institution requests that a charge from a merchant (you) be reversed. You should know that a customer can dispute charges when goods or services are not delivered within the agreed-upon timeframe, are received damaged, etc.

C.O.D. (CASH ON DELIVERY): In a wholesale context, a cash-on-delivery arrangement means that your customer can pay for their order upon receiving it, rather than up front when they first place their order.

CONSIGNMENT: A consignment agreement between you and your customers is an alternative to a wholesale deal. You, as the vendor, agree to put your product in a retail store without receiving any payment up front; in a case like this, you will only get paid when your product actually sells at retail. Any unsold product should be returned to you.

CROSS-MERCHANDISING: A retail merchandising technique in which products from different brands are strategically displayed together in order to trigger increased consumer spending and help product exposure.


DELIVERY WINDOW: The timeframe within which your goods MUST be delivered.

DISCOUNT: In the wholesale context, the term discount refers to a discount you offer off of the SRP (suggested retail price).

DISTRIBUTION CENTER (or D.C.): Most major multi-door retailers have a D.C. where they receive their goods and redistribute them to each of their doors on their own.

DOORS: The doors are the different stores owned by one retailer. For example, Saks Fifth Avenue has multiple doors.

DISTRIBUTOR: This is the intermediary, or middleman, that buys goods from producers at steep discounts (even steeper than wholesale discounts) to then sell these goods to retailers.

DROP SHIPPING: A manufacturer or designer has the option to drop ship their product directly to a retailer’s customer. Talk about service!


EXCLUSIVITY: Certain retailers will request that you hold back from working with other retailers within a specific geographic area or that you refrain from offering a product in particular to any other retailer but them.


KEYSTONE: This is a pricing method by which products are priced for resale at double the wholesale price or double the production cost.


LEAD TIME or TURN AROUND TIME: The timeframe you will require to produce and deliver goods to a retailer.

LINE PRICING: As simple as the same price for all of your products across the board. Or across the line, rather.

LINESHEET: A visual aid that displays all of your products available within a particular season.


MARKDOWN: This means to reduce the selling price of a product.

MARGIN: The difference between your selling price and what it cost for you to produce an item.

MARK-UP: This is the dollar amount or percentage increase between the wholesale price and the retail price.

MARKDOWN DOLLARS: This refers to the difference between the original price of a product and the price at which it was actually sold.

MARKET: When a sales representative (sales rep for short) or buyer says something like “I’m going on market!”, they mean that they’re going into buying season.

M.O.Q.: The acronym for minimum order quantity that you can require in order to accept an order from a wholesale customer.

M.S.R.P. or S.R.P.: The acronym for the “manufacturer’s suggested retail price” or “suggested retail price” established for retailers by the vendor.


N.W.T.: New with tags. Fresh!


O.O.S.: Out of stock. That’s all!

ORDER FORM: This is a form that you can (and should) create in order for your customers to use when placing their orders with you.

O.T.B.: “Open to buy” is a term that retailers use to refer to the merchandise that they’ve calculated into their purchasing budget, but have yet to order. It can also be used to refer to the process of planning your future orders.


PICK-LIST: This list indicates which items should be taken from your inventory to fulfill orders.

P.K.: A product knowledge (or P.K.) session is a presentation of your product that you or your team put on for your customers’ buyers and sales floor staff. Most brands will offer these P.K. sessions in order to encourage the sale of their products and to increase the retail staff’s confidence when selling it. You should try it!

P.O.: A purchase order (or P.O.) is a document submitted to you (the seller) by a retailer’s buyer, which indicates the descriptions and quantities of each product they wish to purchase.

P.O.P. or POINT OF PURCHASE/POINT OF PURCHASE DISPLAY: This is a standalone display unit that you provide to your retailers in order for them to use on their sales floor to enhance your product’s appeal and visibility.

P.O.S. or POINT OF SALE: This is the point at which the retailer receives payment from consumers for a product.

PRIVATE LABEL or WHITE LABEL: Selling a private label starts by hiring a designer to develop a product with another company’s brand name attached to it.


R.A.: This acronym stands for “return authorization”.

R.T.V.: This acronym stands for “return to vendor”.


SALES AGENT: A sales agent is responsible for the sale of wholesale goods to retailers. However, they are not responsible for the collection of payments or for the distribution of the goods.

SELL THROUGH RATE: This indicates how fast your product sells within a particular store.

SHIP DATES: The dates on which your goods are scheduled to ship to your customers.

SHOWROOM: A showroom is an outsourced facility where your product is shown by your sales reps to the buyers of potential retail accounts and other industry professionals. Fees for displaying your product in these showrooms often include monthly rent and other expenses which cover trade shows or related events, in addition to owing back a percentage of your total sales. You can always create your own showroom, if you have the space of course!

SHRINKAGE: Shrinkage is basically the loss of inventory in a retail environment. Such losses can be attributed to theft (internal or external), administrative or cashier errors, in-store or in-transit damages or losses, vendor fraud, etc.

STOCK KEEPING UNIT or S.K.U.: A S.K.U. is a unique code assigned to each style of each product available in your line.

STOCKIST or RETAILER: These are the entities that carry and sell your product to consumers.

SWAP REQUEST: Retailers may request to swap a product for another when one isn’t performing as well as anticipated (as long as it is still N.W.T (new with tags), of course).


TERMS AND CONDITIONS: Your set of rules that your customers must agree to in order to do business with you.

TERMS or NET TERMS (including pre-paid credit card terms): These are payment plan options for your customers; for instance, a retailer may ask to pay you either 30, 60 or 90 days after the invoice date. Within the wholesale industry, these terms are typically referred to as “NET 30”, “NET 60” or “NET 90”.

TRADESHOW: This is an event that brings together members of a particular industry in order for professionals to display, demonstrate and discuss the latest products and services hitting on the market.

TRUNK SHOW: This is an event where vendors present merchandise directly to sales staff or consumers at a retail location or other venue (hotel conference room, for example). In many cases, these types of events allow for store personnel to preview and/or purchase merchandise before it becomes available to the public. Quite the V.I.P. experience!

TURN RATE, TURN or TURNOVER: This is a measure used by retailers to analyse the movement of a particular product over the course of a year. A process like this one provides insight into whether too much or too little inventory is kept. Important side note: the turn rate directly influences one’s O.T.B (open to buy).


VENDOR: A seller, a manufacturer or a designer selling a product to a retailer.

VENDOR COMPLIANCE: These are the rules set by retailers; vendors must agree to them in order to be able to do business. Typically, a vendor compliance agreement covers the topics of liability insurance, shipping to distribution centres, logistics, ticketing, labelling, payment terms, invoicing, etc.


WHOLESALE COST: This is the cost at which you are selling your product to retailers.


Y.T.D.: The acronym for “year-to-date”; this is the period starting from the beginning of the year to the present date.


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Feel free to reach out to us if you have any questions. We’d love to see how our company can help you start, launch, and grow your business. Email us today!

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