Ecommerce Ontology & Glossary

Ecommerce Platform Terminology

Ecommerce Platform

Software that enables businesses to build and manage online stores. Handles product catalog management, shopping cart functionality, payment processing, order management, and customer account operations. Examples include Shopify, BigCommerce, Magento, and WooCommerce.

Headless Commerce

Architecture that decouples the frontend presentation layer from the backend commerce engine. The commerce backend exposes functionality through APIs while the frontend is built independently using modern frameworks. Enables multiple frontends (web, mobile, IoT) to share the same commerce backend.

SaaS (Software-as-a-Service)

Cloud computing model where software is hosted by the vendor/provider and made available to customers over the internet. SaaS ecommerce platforms like Shopify and BigCommerce handle infrastructure, security, and maintenance, allowing merchants to focus on their business.

Open Source

Software with source code that anyone can inspect, modify, and enhance. Open-source ecommerce platforms like Magento and WooCommerce provide maximum customization at the cost of greater technical responsibility for hosting, security, and updates.

MACH Architecture

Acronym for Microservices-based, API-first, Cloud-native, and Headless. An architectural approach emphasizing flexibility and interoperability. MACH-certified solutions work together through standardized APIs, enabling merchants to assemble best-of-breed technology stacks.

Microservices

Architectural approach structuring applications as collections of loosely coupled services, each responsible for specific business capabilities. Enables independent scaling, technology diversity, and fault isolation compared to monolithic architectures.

Composable Commerce

Approach treating commerce functionality as modular, interchangeable components. Merchants compose solutions from specialized vendors rather than selecting a single platform, providing maximum flexibility for complex requirements.

CMS (Content Management System)

Software enabling creation, management, and modification of digital content without specialized technical knowledge. In ecommerce, manages product descriptions, blog content, landing pages, and marketing materials.

PIM (Product Information Management)

System for managing product data, attributes, descriptions, and digital assets across multiple channels. Centralizes product information to ensure consistency across ecommerce site, marketplaces, and physical stores.

OMS (Order Management System)

Platform orchestrating the end-to-end order lifecycle from capture through fulfillment. Provides inventory visibility across locations, intelligent order routing, split shipment management, and return processing.

Marketing Metrics Glossary

CAC (Customer Acquisition Cost)

Total cost of acquiring a new customer, including marketing spend, sales efforts, and associated overhead. Calculated by dividing total acquisition spend by number of new customers. Fundamental to understanding marketing efficiency and business unit economics.

LTV / CLV (Lifetime Value / Customer Lifetime Value)

Predicts total revenue a customer will generate over their relationship with the business. The ratio of LTV to CAC indicates customer acquisition sustainability—ratios below 3:1 often signal unsustainable unit economics, while ratios above 5:1 may indicate underinvestment in growth.

CPC (Cost Per Click)

Fee paid per ad click in PPC (Pay Per Click) campaigns. Indicates advertising efficiency for click-focused campaigns. Varies significantly by industry, competition, and ad quality.

CPM (Cost Per Mille)

Cost per thousand impressions. Used for brand awareness campaigns where visibility rather than clicks is the primary goal.

ROAS (Return on Ad Spend)

Revenue generated per dollar of advertising investment. Calculated as revenue divided by ad spend. A ROAS of 4:1 means $4 in revenue for every $1 spent on advertising.

Conversion Rate

Percentage of visitors who complete a desired action, typically a purchase. Ecommerce averages typically range from 1-4%, varying significantly by industry, traffic source, and device type.

Cart Abandonment Rate

Percentage of shopping carts created that do not result in purchases, typically 60-80% across ecommerce. Understanding abandonment points enables targeted recovery strategies.

AOV (Average Order Value)

Average revenue per transaction. Increasing AOV through bundling, cross-selling, upselling, and free shipping thresholds improves profitability without requiring additional customer acquisition.

NPS (Net Promoter Score)

Metric measuring customer loyalty on a 0-10 scale. Customers rating 9-10 are promoters, 7-8 are passives, 0-6 are detractors. NPS is percentage of promoters minus percentage of detractors.

SEO (Search Engine Optimization)

Practice of optimizing sites for better organic search rankings. Ecommerce SEO includes product page optimization, category structure, technical performance, and content marketing.

SEM (Search Engine Marketing)

Paid advertising on search engines, typically through platforms like Google Ads. Includes text ads, shopping ads, and display remarketing.

Fulfillment & Operations

FBA (Fulfillment by Amazon)

Service enabling merchants to leverage Amazon's logistics network, with Amazon handling storage, picking, packing, shipping, and customer service. Provides Prime eligibility but reduces merchant control over branding.

3PL (Third-Party Logistics)

Providers offering outsourced warehousing and shipping services. Enable merchants to scale operations without capital investment in logistics infrastructure.

SKU (Stock Keeping Unit)

Unique identifier for each distinct product and variant (size, color, style) in inventory. Essential for inventory tracking, demand forecasting, and operational efficiency.

Dropshipping

Fulfillment model where suppliers ship directly to customers. Minimizes inventory risk but typically offers lower margins and less control over fulfillment quality.

Print on Demand

Production model creating items only after orders are placed. Eliminates inventory risk for custom products like apparel, accessories, and home goods.

Inventory Turnover

Measure of how quickly inventory is sold and replaced, calculated as cost of goods sold divided by average inventory. Higher turnover generally indicates efficient inventory management.

BOPIS

Buy Online, Pickup In-Store. Omnichannel fulfillment option combining digital convenience with immediate product availability.

Product Management Glossary

Variant

Specific version of a product defined by attributes like size, color, or material. A t-shirt might have variants for small/red, medium/red, small/blue, etc.

Attribute

Characteristic defining a product property such as color, size, weight, or material. Used for filtering, comparison, and variant generation.

Category Taxonomy

Hierarchical organization of products into categories and subcategories. Critical for navigation, SEO, and merchandising.

Cross-sell

Recommending complementary products to items in cart or recently purchased. Example: suggesting a phone case with phone purchase.

Upsell

Encouraging customers to purchase a higher-end or upgraded version of a product. Example: suggesting premium model with enhanced features.

Bundling

Offering multiple products together as a package, typically at a discount compared to individual purchases. Increases AOV while providing customer value.

Abandoned Cart Recovery

Tactics to re-engage users who added items to cart but did not complete purchase. Includes email sequences, retargeting ads, and push notifications.

Recommendation Engine

System suggesting products based on behavior, purchase history, and similar customer patterns. Drives significant revenue through personalized discovery.

Merchandising

Strategic presentation and promotion of products to maximize sales. Includes product placement, visual merchandising, and promotional planning.

GMV (Gross Merchandise Value)

Total value of merchandise sold through a platform over a time period. Common metric for platform scale and growth.