Key Terms

Drop-ship / Drop-shipping: A fulfillment method where a store does not carry any product inventory. Instead, when a store sells a product, it purchases the item from a third party (i.e. a wholesaler) and has it shipped directly to the customer. The way this business model makes money is through the profit margin of the product, minus the cost of goods and the cost of advertising. 

Joint Ventures eCommerce: Reselling physical products owned by a 3rd party manufacturer similar to drop-shipping but more exclusive and custom-tailored.

Keystone: A traditional pricing technique in retail in which retailers mark up double the wholesale price or cost of the product.

Sales Funnel: A buying process which leads customers go through when purchasing products.

Upsell: A sales technique where a seller offers a customer who has just made a purchase with another related product(s) such as an upgrade or add-ons to increase the value of a sale.

Downsell: A sales technique where a seller offers a customer who wants to back down from a purchase with a cheaper alternative, which increases the chances of getting the sale.

Conversion: The desired action you want people to take as a result of your ad. This could be a sale, email sign up, download etc.

Affiliate Marketing: Allow others to sell your product by paying them a commission for each sale they refer.

Earnings-Per-Click (EPC): The amount of revenue you generate per click on your ad. EPC equals to the total revenue divided by the total number of clicks that your ad received.

Cost-Per-Acquisition (CPA): The amount you pay to acquire a sale. CPA equals to total cost of advertising divided by the total number of sales as a result of the advertising. 

Lead Generation Business: A business that primary focuses on generating contacts.