Ecommerce Growth

Understanding E-Commerce: Key Terms Explained

Ecommerce Growth

Understanding E-Commerce: Key Terms Explained

Are you overwhelmed by the complex jargon of e-commerce? Do you find the ever-changing online sales landscape confusing? Unraveling the web of e-commerce terms can be a challenging task, especially for business owners and marketing executives stepping into the digital realm for the first time. But fret not, you are not alone in this journey, and we at First Pier are here to guide you.

E-commerce, the process of buying and selling online, has exploded in popularity and become a necessity for businesses worldwide. This massive surge has not only brought on numerous advances but a host of new industry buzzwords and terminologies. Understanding these e-commerce terms is fundamental to successfully navigating, and ultimately mastering, the online marketplace.

We believe it is essential to comprehend these terms not merely as definitions but within their operational context. Grasping terms like 'Conversion Rate', 'Affiliate Marketing', and 'B2C' in terms of their practical application can help leverage their potential to its fullest. Furthermore, keeping updated with emerging trends such as 'mobile commerce' and 'omni-channel retailing' will place your business at the forefront of innovation.

Top E-commerce Terms: A Quick Run-through:

  • E-commerce: The process of buying and selling online.
  • Affiliate Marketing: A marketing process where a publisher and an advertiser jointly market to consumers.
  • Brick and Mortar: A business that has a physical store in addition to an online presence.
  • B2B: (Business to Business) Selling services or products to another business.
  • B2C: (Business to Consumer) Selling services or products directly from the business to the consumer.
  • Call-to-Action: A phrase encouraging users to take a particular action.
  • Conversion: The process of turning a user into a customer.

Detailed infographic of e-commerce terms - e commerce terms infographic comparison-2-items-casual

With a solid understanding of these key e-commerce terms, you are more equipped to handle the complexities of the online marketplace. So dive in with us, as we demystify the digital jargon and simplify the complex world of e-commerce!

Understanding the 5 C's of E-Commerce

As we delve deeper into e-commerce, understand the 5 C's of e-commerce marketing. These five factors act as a compass, guiding your business towards online success. They are: Company, Collaborators, Customers, Competitors, and Context/Climate.


Firstly, understanding your company is crucial. This involves knowing your unique selling proposition, your strengths, weaknesses, opportunities, and threats. You should be able to answer questions like: What makes your products or services stand out in the market? How does your brand resonate with your target audience? Having a clear comprehension of your company allows you to craft a compelling e-commerce marketing strategy.


Next are your collaborators. These could be your suppliers, distributors, or any third-party entities that contribute to your online business operations. Understanding their roles and how they impact your business is critical. Effective collaboration can lead to improved efficiency, cost savings, and a stronger supply chain.


The third C stands for customers. Knowing your audience—their needs, preferences, and behaviors—allows you to create a personalized marketing approach that resonates with them, thereby increasing the likelihood of conversion. To engage effectively with your customers, consider implementing targeted email campaigns, SMS marketing, and personalized content strategies. As our expert Steve at First Pier highlights, understanding your customers is a crucial component of a successful e-commerce strategy.


In the e-commerce landscape, understanding your competitors' strategies is critical. By analyzing your competitors' websites, you can gain valuable insights into their strategies and discover areas they may need to improve. Tools like Semrush's Market Explorer can help you track your main competitors and compare organic keywords to theirs.

Context/ Climate

Lastly, the context or climate of your market is just as important as knowing your customers and competitors. This involves staying abreast of industry trends, understanding the external factors that may affect your business, and positioning your content effectively within the market context.

To sum it up, the 5 C's of e-commerce marketing—Company, Collaborators, Customers, Competitors, and Context—are crucial components of a successful e-commerce marketing strategy. As we delve further into e-commerce marketing, we’ll explore how to implement these components effectively, ensuring a holistic approach that not only drives traffic but also helps convert that traffic into loyal customers.

Different Types of E-Commerce

Now that we have a grasp of the 5 C's of e-commerce, let's dive into the various types of e-commerce models that form the foundation of online business. Understanding these models is crucial as it helps in formulating strategies that align with your specific business model and audience.

Business-to-Business (B2B)

The first of our e-commerce terms is Business-to-Business (B2B). This model involves transactions between two businesses. One business provides products or services to another business, which then typically sells to the consumer. This model often involves elaborate transactions and longer sales cycles. An example could be a manufacturing company selling components to an automobile company.

Business-to-Consumer (B2C)

Next in line is the Business-to-Consumer (B2C) model. This is probably what comes to mind when most people think of e-commerce. It involves businesses selling products or services directly to individual consumers. This method is the traditional retail model transferred to the digital world. Examples range from ordering a book on Amazon to buying a digital subscription for a streaming service.

Consumer-to-Consumer (C2C)

The Consumer-to-Consumer (C2C) model allows consumers to sell directly to other consumers. Platforms like eBay or Craigslist have made this model popular, enabling individuals to sell their used items, handmade crafts, or even services to others.

Consumer-to-Business (C2B)

Finally, we have the Consumer-to-Business (C2B) model. This is a more modern e-commerce model, enabled by the democratizing power of the internet. Here, consumers offer their services or products to businesses. Examples include freelancers selling their skills to businesses on platforms like Upwork or Fiverr, or a customer offering feedback to a company for market research.

Each of these models represents a different way of conducting business online. By understanding these basic e-commerce models, you're already on your way to mastering the art of online selling. As we delve deeper into e-commerce terminology, these models will serve as a foundation for understanding more complex concepts.

Making sense of these e-commerce terms and applying them to your business model is a crucial step for any online seller. At First Pier, we are committed to helping businesses like yours thrive in the online realm. We believe that education is the first step towards success, and that's why we're here to help decode the language of e-commerce and ensure your online store's success.

Key E-Commerce Terms and Their Significance

As we continue our journey into e-commerce, it's important to understand some of the key concepts and jargon that are part and parcel of this exciting industry. Here are some of the most common e-commerce terms and why they matter.

A/B Testing

In the e-commerce world, A/B Testing is akin to a science experiment. It involves creating two different versions of a webpage or marketing element and seeing which one performs better. This allows us to make data-driven decisions that can boost conversions and sales.

Average Order Value (AOV)

Average Order Value, or AOV, is a vital metric that measures the average total of every order placed over a specific period. A higher AOV suggests that our marketing strategies are effectively upselling and cross-selling, leading to increased revenue without necessarily driving more traffic.

Business-to-Business (B2B)

B2B is an acronym for Business-to-Business. It refers to businesses that primarily sell products or services to other businesses, rather than to individual consumers. This could include everything from accounting software companies to automobile manufacturers.

Business-to-Consumer (B2C)

B2C stands for Business-to-Consumer, and as the name suggests, these are businesses that sell directly to consumers. This includes everything from your local grocery store to online giants like Amazon.

Big Data

In the realm of e-commerce, Big Data refers to the vast amount of information that businesses collect from their operations and customer interactions. Analyzing this data can reveal valuable insights into customer behavior and market trends.

Churn Rate

Churn rate, or customer churn, refers to the rate at which customers stop doing business with a company. Understanding why customers churn can provide valuable insights for improving business processes and reducing customer loss.

Click-through Rate (CTR)

CTR is a key performance indicator that measures the percentage of people who click on a specific link among those who view it. It's a crucial metric in assessing the effectiveness of online advertisements and email marketing campaigns.


Cross-selling is a sales strategy where we suggest related products to a customer who has just made a purchase. This not only increases sales but also improves the customer shopping experience by helping them find products that complement their purchase.

Customer Relationship Management (CRM)

CRM is all about managing our relationship with current and potential customers. Using CRM software, we can organize customer details, track interactions, and gain valuable insights that can drive customer retention and sales growth.

Customer Retention

Customer retention refers to the strategies and tactics we use to keep customers coming back to our store. A high customer retention rate means we're successful in building long-term relationships with our customers, which can lead to increased profitability.

Key Performance Indicators (KPIs)

KPIs are crucial metrics that help us measure the success of our marketing efforts and overall business performance. They provide a clear picture of where we're excelling and where we need to focus more effort.

Lifetime Customer Value (LCV)

LCV is a prediction of the total revenue we can expect from a single customer over their lifetime. Monitoring LCV helps us understand the long-term value of our marketing strategies and focus on customer retention.

Net Promoter Score (NPS)

NPS is a metric that gauges customer satisfaction and loyalty. It's based on one simple question: "How likely are you to recommend our company to a friend or colleague?"


Omni-channel refers to a multi-channel sales approach that provides customers with a seamless shopping experience, whether they're shopping online from a desktop or mobile device, or in a brick-and-mortar store.

Return on Investment (ROI)

ROI measures the profitability of an investment. In e-commerce, it can refer to the financial return from marketing campaigns, technology investments, and more.

Search Engine Optimization (SEO)

SEO is the practice of optimizing our website to achieve higher rankings in search engine results, leading to increased visibility and organic traffic.

User Experience (UX)

UX refers to a customer's overall experience with our brand, from navigating our website to interacting with our customer service, and, of course, using the products or services we sell. A positive UX is crucial for building customer loyalty and driving sales.

Understanding these e-commerce terms is essential for navigating the complexities of online selling. Armed with this knowledge, we at First Pier are ready to help you optimize your online store and maximize your success!

E-Commerce Terms Specific to Amazon

As we venture further into e-commerce, it's time to delve into the specifics of the biggest player in the field: Amazon. Mastering these Amazon-specific e-commerce terms is crucial for anyone aiming to tap into the platform's vast marketplace.

Amazon Bestseller Ranking (BSR)

The Amazon Bestseller Ranking (BSR) is a unique system that assigns a rank to nearly every product in Amazon's multi-million product catalog, based on its sales history. A product is awarded a BSR after its first sale, and the rank is a good indicator of how well a product is currently selling on Amazon. Understanding and tracking your products' BSRs can help you gauge their performance and make informed decisions about inventory and marketing.

Amazon Pay-Per-Click (PPC)

Amazon Pay-Per-Click (PPC) is a marketing strategy that allows sellers to buy visibility for their products at the top of Amazon’s search results page. Sellers bid on keyword search terms, with the aim of having their products displayed first to online shoppers. It's an auction-like process, where the seller with the highest bid and the best quality ad usually wins the prime spot. Mastering Amazon PPC can significantly boost your product's visibility and, consequently, your sales.

Amazon Search Engine Optimization (Amazon SEO)

Amazon SEO involves optimizing your product listings for Amazon's search engine, aiming to increase organic web traffic to your product pages and rank higher in Amazon search results. This process includes optimizing keywords, text, and image content on your product pages. A well-executed Amazon SEO strategy can dramatically improve your product's visibility and sales on the platform.

At First Pier, we understand the significance of these terms and how they can impact your online business. Utilizing strategies like Amazon PPC and Amazon SEO, along with tracking metrics like BSR, can help ensure your products stand out in Amazon's vast marketplace. As your ecommerce partner, we're here to help you navigate these terms and implement effective strategies to enhance your online presence and grow your sales.

E-Commerce Terms Related to Customer Behavior and Sales Strategies

As we move forward in our journey to understand e-commerce terms, let's delve into those related to customer behavior and sales strategies. These are crucial to understand as they directly influence the success of your online business.

Brand Loyalty

Brand Loyalty refers to a customer's tendency to consistently choose a particular brand over others. It's more than just repeat business; loyal customers can become brand advocates, spreading positive word-of-mouth and bringing in new customers. Increasing customer engagement with strategies like email newsletters and social media can boost brand loyalty.


Bundling is the practice of selling multiple products together, often at a reduced price, to encourage customers to buy more. It's an effective way to increase the average order value.

Buy Box

The Buy Box is a key feature on Amazon product pages that allows customers to directly add a product to their shopping cart. Winning the Buy Box can significantly increase your sales on Amazon.

Buy Now, Pay Later (BNPL)

BNPL is a financing option that allows customers to purchase items immediately but delay payment, often without interest if paid within a certain period. It's a popular option that can boost conversion rates, as described in Similarweb's buy now, pay later report.

Buy Online, Pick up In-Store (BOPIS)

BOPIS is a model that combines the convenience of online shopping with the immediacy of in-store pickup. It's a strategy that can enhance the customer experience and encourage repeat business.

Buyer Persona

A buyer persona is a fictional representation of your ideal customer. It's based on market research and real data about your existing customers and is essential for personalizing your marketing efforts.

Cart Abandonment

Cart abandonment is when a potential customer adds a product to their shopping cart but leaves without completing the transaction. Monitoring your cart abandonment rate can provide valuable insights into possible barriers to purchase.


Chatbots are AI-powered tools that can simulate human-like conversations to enhance user experience. They can answer customer queries, recommend products, and even facilitate purchases.

Consumer Behavior

Consumer behavior refers to how customers act during the buying process. It includes their attitudes, preferences, and buying habits. Understanding consumer behavior can help you tailor your marketing strategies to better meet your customers' needs.

Conversion Funnel

The conversion funnel is the path a customer takes from first learning about your brand to making a purchase. It's typically divided into stages like awareness, consideration, and purchase. Optimizing each stage of the conversion funnel can enhance your conversion rates.


Cross-shopping is when a customer compares products or prices across different brands or retailers before making a purchase. Understanding your customers' cross-shopping behavior can help you stay competitive.

Customer Acquisition Cost (CAC)

CAC is the total cost of acquiring a new customer. It includes all marketing and sales expenses associated with attracting and converting a new customer.

Customer Lifetime Value (CLV)

CLV represents the total revenue a customer is expected to generate for your business over their lifetime. It's a valuable metric that can help you determine how much to spend on customer acquisition and retention.

Customer Loyalty

Customer loyalty refers to the propensity of a customer to choose your brand for repeat purchases. It's influenced by factors like product quality, customer service, and price. Building customer loyalty is key to long-term business success, as loyal customers not only buy more but also refer new customers.

Cyber Monday

Cyber Monday is one of the biggest online shopping days of the year, occurring on the Monday following Thanksgiving. It's a key date for online retailers, with many offering special deals and discounts.

Direct-to-Consumer (D2C/DTC)

D2C is a business model where companies sell directly to consumers, bypassing traditional retail channels. This approach allows businesses to control the entire customer journey, from product development to sales and customer service.


Dropshipping is a business model where the retailer doesn't hold inventory. Instead, when a customer places an order, the retailer purchases the item from a third party who ships it directly to the customer.

Frequent Buyer Programs

Also known as loyalty programs, these are initiatives designed to encourage repeat business by rewarding customers for making multiple purchases.


Fulfillment refers to the process of packaging and shipping orders to customers. It's a key part of the e-commerce process and can significantly impact customer satisfaction.

Fulfillment by Amazon (FBA)

FBA is a service provided by Amazon where they handle storage, packaging, and shipping on behalf of sellers. It's a popular option for Amazon sellers, as it can save time and resources.

Fulfillment by Merchant (FBM)

FBM is when the seller handles all aspects of order fulfillment. While it requires more work, it can offer greater control over the process.

Lightning Deals

Lightning deals are time-sensitive discounts offered for a limited time and quantity, often seen on Amazon during events like Prime Day.

m-Commerce (Mobile Commerce)

m-Commerce refers to shopping through mobile devices like smartphones and tablets. It's a rapidly growing area of e-commerce, with many customers preferring the convenience of shopping on the go.


Online marketplaces are platforms where multiple third-party sellers can list and sell their products. Examples include Amazon, eBay, and Walmart.

Multichannel eCommerce

Multichannel eCommerce involves selling on multiple online channels, like your own website, online marketplaces, and social media. It's a strategy that can enhance your reach and boost sales.

By understanding these e-commerce terms, you'll be better equipped to navigate the online marketplace and grow your business. At First Pier, we're here to help you implement these strategies and achieve your e-commerce goals.

Conclusion: The Importance of Understanding E-Commerce Terms for Online Businesses

In this rapidly evolving digital age, understanding e-commerce terms is not just beneficial, it's crucial for the success of any online business. Familiarizing yourself with the language of the industry is the first step towards crafting an effective e-commerce strategy. Knowledge, as they say, is power, and in e-commerce, it's the power to unlock your business's full potential.

Whether it's understanding the difference between B2B and B2C, grasping the concept of the conversion funnel, or recognizing the significance of metrics like conversion rates and average order value, each term you learn adds a layer of sophistication to your e-commerce strategy.

Moreover, staying updated with emerging trends such as mobile commerce and omni-channel retailing helps you stay competitive and deliver an exceptional customer experience. From Shopify to Amazon, understanding the specific terminology associated with different platforms can significantly enhance your ability to leverage their capabilities for your business.

At First Pier, we believe in the importance of empowering our clients with knowledge. We want to make sure that you're well-equipped to navigate the complex yet exciting world of online trade. From the basics of e-commerce to advanced concepts like SEO and cookies, our team of experts is here to guide you every step of the way.

In conclusion, understanding e-commerce terms is key to unlocking the full potential of your online business. Not only does it help you navigate the e-commerce landscape, but it also provides you with the tools to make informed decisions, optimize your operations, and ultimately, achieve e-commerce success.

We invite you to explore more about e-commerce services and Shopify functionality on our site. If you’re just starting out or planning to scale your business, First Pier is here to help. Let's embark on this journey together and make your mark in the e-commerce landscape.

E-commerce terms - e commerce terms

The journey to e-commerce success is not a sprint but a marathon. It requires consistent effort, strategic planning, and continuous learning. But with the right knowledge at your disposal, the road to e-commerce success becomes a lot less daunting.

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