70 Wholesale Terms Everyone Should Know

Whether you’re a brand or retailer considering the leap to wholesale or a weathered B2B salesperson, the fact is that the realm of wholesale has many B2B-specific terms that may leave you wondering if you know what they mean.

If you have caught yourself wondering why all these terms sound like Greek to you, read on to speak wholesale fluently. Below, we present the essential words, abbreviations, and phrases commonly used in online and offline B2B commerce.

Assortment

The types of products a wholesaler offers retailers and highlights the importance of giving buyers a wide range and variety of product types, sizes, colors, price lists, and more.

Backorder

Products that have been ordered but have yet to ship. Backordering typically happens when a B2B business lacks stock or receives product orders before production starts.

Big-Box Stores

Big-box stores (also known as chain stores or superstores) are brick-and-mortar retail locations occupying ample space. Big-box stores offer a large merchandise variety, have multiple locations, and usually carry the same type of inventory. Examples of big-box stores are Target, Walmart, Ikea, and J.Crew.

Billing Address

The address where a business sends customers a bill or invoice. Usually, this address is the same as the customer’s company headquarters and can differ from the shipping address.

Brand

The name of an easily distinguishable product, product line, or service with specific identity, attributes, and features. A company usually creates brands to facilitate communication, marketing, and sales efforts. Examples of brands include Apple, Coca-Cola, Louis Vuitton, and Advil.

Brick and Mortar

A physical retail location with a traditional storefront, where businesses sell their products in person.

Buy Now, Pay Later (BNPL)

BNPL schemes allow customers at the point of sale to purchase products on credit without a credit card and pay later in full or in small installments. BNPL solutions include PayPal, Klarna, and Sezzle.

Buybacks

Buybacks (a.k.a. guaranteed orders) occur when a retailer negotiates with a wholesaler to return or repurchase unsold inventory. For example, this is a usual practice when retailers want to try out a new product without taking the risk of being left with unsold stock if they don’t manage to sell it.

Case Packs

Bundled quantities of the same product. Wholesale businesses typically offer case packs as an option to retailers to make their ordering experience faster and easier.

Catalog

A visual representation (in print or digital format) of a business’s product list, including photos of items for sale. This term is used interchangeably with line sheet. However, a catalog tends to be more stylized in terms of design. On B2B Wave, you can also easily create mini-catalogs for each product category.

Chargebacks

A form of consumer protection where a card company or bank requests a charge reversal from a merchant. A customer can dispute charges, such as when a seller has not delivered goods or services within the specified time frame or goods received are damaged.

Collect on Delivery / Cash on Delivery (COD)

In wholesale terms, a COD arrangement occurs when a retailer pays for their order upon delivery rather than in advance (e.g., when they place an order or before the order is shipped).

Collection

A group of products that fit together thematically (e.g., Halloween) or are sold as a set.

Consignment

A type of agreement between a B2B business and a retailer under which the former agrees to place their goods in a store and only receive money once the retailer actually sells them. Also, under consignment statutes, retailers return unsold products to the seller.

Cost of Goods Sold (COGS)

The calculation of all the costs involved in selling a product, including all of the costs and expenses directly related to its production. The cost of goods sold (a.k.a. cost of sales) depends on the complexity of each product’s manufacturing process. A typical method of calculating COGS is: Beginning Inventory+Purchased during the period−Ending Inventory.

Delivery Window

The time frame within which wholesalers ship goods to customers. Both sellers and buyers can set a delivery window upon the submission of an order. This is standard practice for businesses in the food and beverage industry as their buyers want to ensure that ordered goods will be on their shelves before they expire.

Direct-to-Consumer (D2C)

When a wholesale business sells its products directly to end consumers through its digital store without any middle distribution channels. B2B differs from D2C in that you sell bulk to retailers or resellers rather than consumers.

Distribution Center

Big retailers with multiple store locations often have distribution centers and ship products in specific quantities to each store from there. In this respect, sellers may deliver products to one of these facilities instead of directly to each retail store.

Dropshipping

The practice of using suppliers or manufacturers to directly deliver products sold to customers upon confirming an order. This method works best with handmade items or online boutiques.

Estimated Time of Arrival (ETA)

The estimated date and time a product will arrive at its destination.

Exclusivity

Some customers request that B2B sellers refrain from working with other retailers within a specific geographic area or offering a particular product or product line to other retailers altogether.

Exporter

Exporters ship products outside of their country to international wholesale customers.

House Accounts

Significant or long-term customers that wholesale businesses’ home-office executives handle directly rather than assigning them a sales rep. Practically, this means that sales reps don’t receive a commission for house accounts.

Importer

Importers bring products from other countries into the country they are based and do business in. Then, importers usually sell those products to B2B businesses.

In and Out

When a distributor or warehouse inputs a special order for a product and doesn’t maintain stock in the warehouse.

Inventory

The amount of raw materials or produced goods available for sale.

Invoice

The document a seller sends to a retailer once the retailer submits and confirms an order. Typically, an invoice includes information about the items sold, their quantity, individual cost, additional charges (such as shipping fees or taxes), and the contact information of the seller and the buyer. An invoice also typically includes a date and unique identifying number or code for recordkeeping.

Keystone

A pricing method that involves doubling a wholesale price to get a suggested retail price. For example, if a product’s wholesale price is $100, its keystone pricing will be $200.

Lead Time

The amount of time a B2B seller requires to produce and/or deliver goods to a retailer.

Less-than-Truckload (LTL)

A shipping option for ground freight loads that are not large enough to take up the capacity of an entire truck.

Line

The complete list of products a wholesale business offers. A line can also be called a “product line” or “range.”

Line Sheet

A document that provides an overview of a wholesale business’s product line. Customers can use the line sheet to create a purchase order by listing the quantity of each item they want.

Manufacturer

An individual person or company that produces goods and sells them to B2B buyers at wholesale prices.

Manufacturer’s Suggested Retail Price (MSRP)

The price wholesale businesses recommend retailers charge for their goods. The term is used  interchangeably with “Recommended Retail Price (RRP).”

Margin

The difference between the wholesale price and the actual cost of producing an item.

Markup

The amount or percentage difference between a product’s wholesale and retail price.

Minimum Order Quantity (MOQ)

The minimum order size a wholesale seller accepts for it to be profitable for them. Eventually, it’s up to the seller to decide the minimum order quantity to get a price break.

Net Payment Terms

A type of payment plan involving retailers paying for items after a specific time frame since the delivery of ordered goods. For instance, a retailer may request invoice payment terms of thirty (30), sixty (60), or ninety (90) days. This is usually referred to as Net-30, Net-60, or Net-90.

Open-to-Buy

The budget a retailer has available to spend and place orders within. Most retailers try to balance having enough products in stock at their stores and avoiding having too much inventory that they’ll need to offer discounts on.

Order Minimum

The lowest amount customers are required to spend on an order.

Pick List

A document that indicates which items should be taken from a B2B business’s inventory to fulfill orders. The pick list usually includes each item’s quantity and product code (SKU). Pick lists are handy for companies with large inventory and order volumes.

Point of Sale (POS)

The point at which a seller receives a payment from the buyer. It’s often synchronized with a software that processes transactions or a system for tracking inventory and returns.

Pre-Order

The practice of allowing customers to order products before their official release. Wholesale businesses will ship pre-ordered goods to buyers when the product is available.

Price Lists

Price lists contain the prices of each of your products. Wholesale businesses may assign buyers to different price lists according to order volume, commercial deals, or currency.

Private Label

Private label (also referred to as white label or private brand) refers to the practice of a business hiring a manufacturer to develop a product under its brand name.

Pro Forma Invoice

A preliminary or “draft” invoice sent to buyers before the shipment or delivery of ordered goods. Typically, a pro forma invoice includes a description of the goods and the total payable amount, but buyers are not legally required to pay the amount on it.

Purchase Order (PO)

A document detailing the products and quantities a retailer wants to buy. Once a buyer submits an order, the PO is usually the basis upon which wholesalers generate the order’s invoice.

Range

The complete list of a seller’s product offering. The term is used interchangeably with “line.”

Recommended Retail Price (RRP)

The price wholesalers recommend buyers charge for their products. The term is used interchangeably with “Manufacturer’s suggested retail price (MSRP).”

Resale Tax ID Number

A valid resale Tax ID Number in the US exempts retailers from paying sales taxes for purchased items. In this respect, wholesalers request buyers to share their Resale Tax ID Numbers, if applicable, and keep them on file.

Return and Exchange Policy

A set of rules outlining the terms based on which buyers can return or exchange unsold purchased stock or defective products.

Return Merchandise Authorization (RMA)

The process a retailer has to follow to return a product to the seller to receive an exchange, refund, or repair.

Sales Representative (Sales Rep or Sales Agent)

An individual working with a wholesale company under a contractual agreement to increase the company’s sales. The sales rep is responsible for pitching a seller’s line to potential new clients. In exchange, the seller pays the sales rep an agreed commission for a successful sale (closed deal).

Sales Tax

A sales tax is a consumption tax applied to the retail cost of purchased goods or services. Sales taxes are common in the US and less common in countries outside the US (e.g., the EU), where many countries use a value-added tax instead.

Samples

Wholesale businesses may mail samples to buyers before they place an order. This practice is common among sellers when closing a new sales deal.

Sell-through

The speed with which a product sells in a specific store or location or through a particular channel (e.g., B2B portal).

Shipping Address

The address where sellers ship or deliver an order. It can be the same as the billing address.

Shipping Policy

A document that covers the rules concerning the delivery of purchased goods to customers and their return, if applicable. The document usually includes information regarding the costs, delivery times, shipping options (e.g., express, standard delivery), and areas or locations covered (e.g., if a business has international shipping or ships only to specific countries or locations).

Shipping Window

The timeframe between which an order can be shipped or canceled. Two weeks is the typical shipping window. Wholesale businesses can send an order anytime within this period.

Showroom

The place where wholesalers display their products to sellers.

Stock-Keeping Unit (SKU)

A unique code (or series of numbers) assigned to each product in your line. SKUs are most often used when a seller has a large inventory to manage. The code usually appears on purchase orders and pick lists.

Stocklist

A list or inventory of all items that a business has in stock.

Ticketing

Labels with relevant product information affixed to merchandise.

Trade Show

An event where companies in the same industry meet with retail buyers, showcase products, and learn about business trends.  

Universal Product Code (UPC) Labeling

A unique barcode with a string of digits assigned to each product to make inventory and sales tracking easier and faster.

VAT (Value-Added Tax)

A tax on goods and services applied at each stage of the supply chain, from its material sourcing to its production and point of sale. Every business along the value chain receives a tax credit for the VAT already paid. However, the end consumer does not, making it a tax on final consumption.

Vendor

A party (typically a seller or manufacturer) that supplies goods to a retailer.

Vendor Compliance

A set of rules that allows retailers to know exactly how a wholesale business complies with its industry’s laws and regulations. Typically, vendor compliance covers liability insurance, shipping to distribution centers, product testing, ticketing, labeling, payment setup, and invoicing and is part of a business’s Terms and Conditions documents.

Wholesale

The sale of goods in large quantities to retail shops and businesses. A wholesaler may act as an intermediate party that sells goods from manufacturers in bulk to individual retailers who are buying them to resell to consumers or may produce their own products and sell them directly to retailers.

Year-to-date (YTD)

A way to track sales from the beginning of the fiscal year until a specific date. Similarly, the concept can be used for weeks (WTD), months (MTD), and seasons (STD).