The Ultimate Wholesale Buying Terminology Guide: Learn Every Important Word in the World of Online Selling

Posted by Big Brand Wholesale.com on 23rd Feb 2020

What is an Unauthorized Dealer? What does Unmanifested Mean? How is Grade B different from Grade C? Learn every single wholesale and liquidation term so you can make the best purchases and have the smoothest transactions! Knowledge really is power!

In alphabetical order:

Arbitrage / “Retail Arbitrage” Retail Arbitrage is when you drive to CVS and buy a basket-full of $13 Revlon lipsticks for $5.99 each from the Clearance Section. This is NOT "wholesale".

Authorized Dealer An authorized dealer typically has a contract with the factory to sell the merchandise they carry. An authorized dealer usually has to follow set-pricing and specific selling guidelines. ALSO SEE Third Party Dealer and Unauthorized Dealer in this article

A/B Grade - See "Grade A/B"

AVO - "Average Order Value". This is the amount your average customer spends. For example, if you have 4 orders for $20, one order for $100 and one order for $85, your AVO would be $44.17 (20+20+20+20+100+85 = $265. Then divide by the total order quantity, which is 6 = $44.17)

Back Order Products that have been ordered but have not shipped yet. Can be VERY problematic for a buyer! Personally, we always avoid backorders and if we discover something we purchase is a backorder we ask for a refund or store credit UNLESS we can be 100% assured that it will arrive with 14 days.

Barcode A bunch of black lines on a paper tag or sticker that can be scanned. The barcode contains data about the type of product, size, manufacturer and the country of origin.

Best Before / Best By (Date): Similar to an Expiration Date but not the same. Best before date on the other hand tells you that the food *may* no longer be in its best form from that date however “non perishables” such as toothpaste, noodles, rice, etc do NOT need to be discarded on the “Best By” date. Instead check the merchandise for quality. If the toothpaste is runny then it is no longer good. If it is totally fine then it does not need to be discarded.

BOL “Bill of Lading”. A contract between a supplier and a carrier company when merchandise ships on a pallet via Freight.What is a BOL and How to Find Yours

Bulk - In wholesale this refers to purchasing multiple items at one time. If you are buying “Bulk Shorts” you are getting (typically) over 10 pieces.

Buybacks / Buy Backs - In some instances a seller may agree to "Buy Back" the unsold merchandise from a vendor. You should NEVER expect a vendor to offer "buy backs" unless a Buy Back program is negotiated PRIOR to purchase or if the vendors Return Policy on their site or in your contract mentions "Buy Backs. Also See: Return Policy

Cargo - merchandise carried by plane or ship. Also See: Freight

Contract - The agreement between a seller and a buyer

Contract Terms - the agreement made between a seller and a buyer regarding the sale of the merchandise. Read our blog post Amazon Ungating: What are Terms and How to Get Them

Case / Case Pack - A box full of new, duplicate items. Cases are produced by Factories.

Chargeback - When a buyer reverses the charge they paid to the seller. Chargebacks can occur because the buyer claims the account was hacked / stolen or because the buyer didn't get the merchandise or even because the buyer doesn't like the merchandise.

Carrier - a carrier transports merchandise. USPS, Fed Ex and UPS are carriers. A Private Courier is also a carrier.

Conditions - This is the same as "Terms and Conditions". Also see Terms, Payment Terms and Contract Terms.

Container / Shipping Container - A large 8 feet 6 inches high by 8 feet wide, the length of the container can be as long as 40 feet. A 20-foot-long shipping container holds approximately 100 washing machines!

Courier - A courier service bring the merchandise *directly* from the seller to the buyer. Couriers are much more expensive than traditional mail but should be used tor instanced where speed is mandatory AND the merchandise is so valuable that you cannot risk any loss or damage. There is really no legitimate reason to use a private courier if you are inside the USA getting a parcel from inside the USA. You can instead just maximize the insurance policy on the parcel and pay extra for “special handling”.

Defect / Defective - an imperfection in the merchandise. Defects can include rips, stains, improper sewing, missing parts / pieces or other issues. Defective merchandise can often be repaired, refurbished, sold As-Is or sold for piece parts.

Delivery Exception - when a delivery is delayed. This is often due to time cut-off, for example, if the merchandise was scheduled to be delivered today at 3pm however it is now 4pm, a Delivery Exception has occurred and the merchandise will be rescheduled for delivery (likely tomorrow). Also See: Shipping Exception and Exception.

Demo / Show Room / Sales Floor Merchandise - These products were used to demonstrate on a sales floor of some kind. Items were briefly used but are in overall new condition. You should expect possible signs of wear from being used very quickly. For example, if a show room vehicle car is being sold, it has likely been sat-in but likely not driven all over.

Discontinued - The manufacturer is no longer making this specific product, size, packaging style or brand. This means the discontinued product will no longer be available for purchase once it is gone. On rare occassion a manufacturer will start production again on a discontinued item.

Distributor - Distributors work with the Factory / Brand to distribute the merchandise

Drop-shipping - Also called "Blind Shipping" means the buyer purchases through Seller A. Seller A then orders the merchandise from Seller B. Seller B ships to the buyer. The buyer never knows the items cam from seller B and assumes he was shipped items from Seller A.

Duty / Duties - Customs Duty is a tariff or tax imposed on goods when transported across international borders. The purpose of Customs Duty is to protect each country's economy, residents, jobs, environment, etc., by controlling the flow of goods, especially restrictive and prohibited goods, into and out of the country.

EAN An EAN is essentially the European version of a UPC (See UPC)

eCommerce - An online store.

EIN An EIN is what we call a "social security number for your company". It is a tax identification number that allows the USA government to pile more taxes on you via your business.What is an EIN and How to Get One

EXP / Expiration Date. Expiration dates tell consumers the last day a product is safe to consume. Also See “Use By” and “Best Before”

Exception - something has occured that has changed the schedule. Also see: Delivery Exception and Shipping Exception.

Exporter An exporter ships products outside of the country they are based in to their international customers.

Factory / Factory Direct A factory is where inventory is physically produced. A distributor works with a factory. A wholesaler usually works with the distributor. Factory direct means the merchandise comes directly from the factory and bypasses other stops.

Factory Packaging - Factory packaging is how the merchandise left the factory, Clothing is often inside clear, plastic bags. Other merchandise is usually inside cardboard cases (boxes)

First Quality - Basically a term someone made up that doesn’t really mean anything, which present a problem because there is no genuine way to define “first quality”. We *assume* it is supposed to be the same as “Grade A” (listed below) or “New”

Fitting Room Pulls - Also a totally made up word that literally is gibberish! There is no such thing as “wholesale fitting room pulls” because no business discards the merchandise that was in their fitting rooms!!!! If ANY wholesale company is telling you the merchandise they are selling is “fitting room pulls” they either don’t know what they are talking about or bought it off a clearance rack and aren’t sure what to call it.

Freight - The term Freight is typically used when you transport goods by train or by truck. (The term Cargo is used when goods are transported by ship or by a plane.)

Freight Forwarder - When buying wholesale Internationally, a Freight Forwarder is a company who takes the merchandise from one location to the next country. Freight Forwarders typically save international buyers a lot of money on shipping. Learn more about international freight forwarding; How to Find a Freight Forwarder and How Freight Forwarders Work

Gated - See Ungated / Ungating

Grade A - New, Perfect merchandise

Grade B or A/B Typically refers to Liquidation in New or Very Good Condition, Potentially Removed from Packaging, but limited wear or use with No obvious parts and pieces missing. Price Tags or UPC are usually still intact. Since merchandise is not opened and tested it may contain concealed damage that you will have to deal with.

Grade C / D Potential damage to packaging or packaging can be missing. Some pieces might be used or tampered with (such as a pair of socks stolen out of a set). Merchandise could have Stains, Dirt, Tears or Could have Missing parts (such as a power cord missing from an electronic). Sometimes labels are applied that indicate damage/defect of the item(s). May display sticker with return reason. Grade C/D is not tested for functionality, meaning the MP3 player might not work or the zipper on the coat might be broken.

Importer - The opposite of an Exporter. An importer brings products from other countries into the country they are based and do business in, and then sells those products to wholesale buyers.

Invoice (Often confused with Receipt or Email Confirmation) A receipt is the 25-foot-long piece of thin, skinny paper you get from CVS when you buy a pack of gum or bottled water. An invoice is what a company, like ours provides. It's typically a full sheet of paper (or even multiple sheets of paper) that can be printed on 8.5 x 11" printer paper. This is what an invoice looks like,

Lead time The time a seller requires before being able to produce and deliver goods to a retailer. Lead Time typically applies to custom merchandise or factory-made but some wholesalers also use this term, specifically if they are SLOW TO SHIP. For example, at BigBrandWholesale.com we ship our orders same-day if ordered before 12pm EST. Other wholesalers ship in 7-14 days "lead time".

Liquidator / Liquidations A Liquidator (BigBrandWholesale) works with Retailers and Warehouses (sometimes Distributors) to purchase their leftover / extra stock at a fraction of the original distribution price.

LLC (Limited Liability Company / Corporation) What is an LLC and How to Get One

Lot(s) - A wholesale Lot is bulk / a bundle of a product or products.

Lot Number - The Lot Number (Also known as “SKU”) is assigned to the merchandise so the buyer and vendor know exactly what the buyer has purchased. A Lot Number is not a UPC. (Also see SKU)

LTL - “Less than a Truckload”, meaning the merchandise being purchased does not take up a full truckload

Manifest - A list of contents contained within the Lot / Purchase

Manufacturer - See “Factory” above.

Manufacturer’s Suggested Retail Price (MSRP) The price the Manufacturer says the retailer should charge for the items. Some wholesale companies, such as Kathy Van Zeeland will tell the retailer what they MUST price the merchandise at.

Mail / Standard Mail - Typically refers to merchandise being shipped via Mail, meaning it is not shipped via Freight (on a wood pallet).

Minimum Order Quantity (MOQ) The minimum order size accepted by a wholesale seller. At BigBrandWholesale.com we do not have a minimum order quantity. For example, Other site require a purchase of 100 duplicates or $5,000 minimum.

Mixed Quality / Mixed Condition - Combination of conditions. There is no guarantee as to the ratio of each type.

Net Payment Terms / Net Terms - A type of payment plan that involves a retailer paying for items, after they have had time to sell your items in her store. For instance, a retailer may request to pay you 30, 60 or 90 days after the invoice date. Note that this is usually referred to as net 30, net 60 or net 90 etc.

Net 30 - The buyer is provided with 30 Days to pay for the merchandise they purchased

Net 60 - The buyer is provided with 60 Days to pay for the merchandise they purchased

Net 90 - The buyer is provided with 90 Days to pay for the merchandise they purchased

Order Confirmation - An order confirmation is a type of Receipt. Most websites, in general, will instantly send you an emailed receipt as soon as you order. This is an "Order Confirmation". This email is to let you know that you have successfully placed an order.

Out of Stock / "OOS" - This means the merchandise you wish to order is not available to ship. Some website will show Out Of Stock merchandise and allow you to purchase it, then they add you to the Back Order List (See: Back Order). At BigBrandWholesale.com 100% of the merchandise we show on our site is in-stock and ready to ship same day. The other reason merchandise could be OOS is because a website error / glitch occurred. This happens to everyone who sells online. The most common reason for this error is that the warehouse shipped the incorrect merchandise, therefore creating an inaccurate inventory count for the next order.

Overstocks - Extra, brand new merchandise. Overstocks have never been on a sales floor and are often inside Factory Packaging.

OQ: See Minimum Order Quantity (MOQ)

Pallet - A pallet is a wood frame designed to have merchandise shipped via freight on top of it. Learn about Pallets: How to Buy, Cost and More

Parcel - a package (ordered merchandise) shipped through Standard Mail. See "Mail / Standard Mail"

Parcel Locker - An area that holds parcels. Learn more about Parcel Locker Deliveries

Payment Terms - Payment Terms are the legalities regarding the payment or repayment of the merchandise. Learn all about Payment Terms in our article What are Payment Terms and How Do They Work?

PDF “Portable Document Format”. PDF files are awesome because anyone can open them on virtually any device so you never have to wonder if the person you are sending the document to is able to access it.

PDF Invoice A PDF invoice can be printed on 8.5" x 11" standard PC paper, emailed or saved to your computer as a PDF file. Here ishow to print an invoice when you order through Big Brand Wholesale.comhttps://bigbrandwholesale.com/save-or-print-invoice-as-a-pdf/

PIA - Paid in Advance, also known as "Paid in Full", meaning the merchandise was fully paid before the order was shipped

Piece-Parts - The pieces that are used to create a full item. Fir example, if you are putting together a bookcase you will have vertical panels , horizontal shelves, screws, bolts, etc. Each of these are piece part. In wholesale you may hear that the listing contains "piece parts" or that the merchandise can be salvaged for piece parts. This means you might get individual bookcase shelves or that you can sell the shelves by the piece beacuse each shelf is still usable.

Private Label / White Label Let's say I want to produce a line of shirts under the name Bulletproof Blonde. I would then create the graphics then find a tank top manufacturer who can put my graphics on a tank top that already exists. This is a much cheaper option for my tank tops then actually having a tank made from scratch then manufactured to reproduce the one I made.

Price List a database (usually an excel file or PDF document) that contains a list of merchandise for sale and its price

Pro Forma (Invoice) - An invoice featuring a quote / estimate for merchandise a buyer is considering purchasing

PRO Number A Freight Order Tracking Number. Learn more: What is a PRO Number and How to Find Yours

Purchase Order / PO - "PO" is a short term for "Purchase Order". A Purchase order is created by the BUYER and an invoice is created by the SELLER. Learn more about Purchase orders in our article What is a Purchase Order and How to Get One

Quality - See A/B, B/C, Mixed Quality

Quote - An estimate

Reseller Certificate / Resellers Permit - A Resale Certificate (Resellers Permit, Resale Permit, etc) is for businesses who wish to avoid paying sales tax because THEY plan to collect sales tax from their buyers. Learn more: How to Get a Resellers Permit / Resale Certificate

RTV / Retail Value - the full-retail price for the merchandise

Refurbished - Also means repaired or restored

Salvage Salvage merchandise is typically damaged. May include a high quantity of unsellable as-is merchandise that need repair, refurbishing or outright re-purposing / piece-parts only.

SKU A SKU is a "Stock Keeping Unit"; can be aby number that is made up by the company storing the merchandise for storage and inventory purposes. One item can have 10 different SKUs if it changes hands 10 times. A SKU is only relevant to the company that currently has the merchandise.. There is no reason for you to know what SKU a different company assigned an item.

Store Returns - Store returns are items that have been purchased then returned to the store. Store returns can be brand new or completely damaged beyond repair.

Samples - a small quantity or piece to "test". You have probably eaten samples at the grocery store but when it comes to wholesale the purpose of a sample is for the buyer to "inspect" the items before they buy a larger quantity. Most wholesale companies charge for samples or offer samples for free but charge shipping and handling fees. At BigBrandWholesale.com we offer tons of samples (we call them Grab Bags).

Shelf Pulls - Merchandise removed from the store shelves / racks. This could be because it was seasonal or because it was discontinued. Shelf pulls are usually damage free but also usually have clearance stickers. May have imperfect packaging.

Shipping Exception - Something has occured that has delayed the shipping of the merchandise. This could be due to time-cutoff or other issues. Usually Shipping Exceptions will restart again the next day, unless the next day is a Saturday, Sunday or Holiday. For example, if your merchandise was scheduled to be shipped Friday but it did not get shipped, it would instead be shipped on Monday.

SRP: See MSRP

Tax ID - See EIN in this document

Terms - There are two main types of terms: Contract Terms vs Payment Terms. We have a great article to explain the difference between the two, even though they are both called "Terms". Read our blog post Amazon Ungating: What are Terms and How to Get Them

Third Party Dealer - A third party dealer is what BigBrandWholesale.com is. For example, we do not have a contract with Calvin Klein but we do have a contract with M*CYS, Bl**mindales and other companies that are Authorized Dealers of Calvin Klein merchandise. Therefore we have permission to sell Calvin Klein merchandise from M*CYS and Bl**mingdales.

Tracking - a number provided by the seller or carrier so a buyer can see when delivery will occur

Transit - Bringing something from one place to another. A parcel is "in transit" after it has left the seller and is going to the buyer. Once it is Delivered it is no longer "in transit".

Truckload https://www.uship.com/ultimate-freight-guide

Turn Around Time - See Lead Time

Unmanifested - Does not include a list of exact contents

Untested - Seller has not tested merchandise. For example, if the item is a laptop computer it might not work. If the item is a speaker it may be missing a cord.

Unauthroized Dealer - From Costco to Amazon, even big box stores have engaged in unauthorized retailing. Why? Quite simply, to offer lower prices. An unauthorized retailer can often purchase and then re-sell products at a lower price than an authorized retailer.

Ungating / Ungated - A term applying to an Amzon process that involves making potential sellers apply to be allowed to solicit merchandise of a specific brand on Amazon.com

UPC A UPC is a "Universal Product Code". People get social security numbers assigned to them whereas products get UPCs.

Upsell - An Upsell is the best way to sell more products. For example, if you are selling a womens blouse, you can "upsell" the customer a necklace, handbag or scarf that would pair nicely with the blouse. If you sell all of these items to the same customer you have "Upsold" 3 additional items.

Use By Date - Similar to “Best By Date”. Use By Dates help consumers as a directive of the date by which the product should be eaten; mostly because of quality, not because the item will necessarily make you sick if eaten after the use-by date.

USPS - The United States Postal Service, the most common mail delivery system in the USA. Government ran.

UX - "User Experience". This typically refers to the level of enjoyment and informational value of a website.

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

Vendor Compliance - Rules the vendor sets. In order for the buyer to make a purchase they must agree to the rules. If the buyer breaks the rules they can be terminated or even sued.

Wholesale - The sale of goods in large quantities, as for resale by a reseller. As such, a wholesaler acts as an intermediate party that sells goods in bulk to individual retailers who are buying them to resell them to consumers. A Wholesaler typically works with a Distributor to get the merchandise from the Factory.

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