5 E-commerce Terms Every Business Owner Should Know

Learning the 5 E-commerce Terms

Barring the rare exception, almost every business in the retail space is going to have an e-commerce presence. In fact, many of today’s most admired brands grew their initial customer base selling exclusively via a direct-to-consumer model online. A business needs to provide consumers with a frictionless digital experience if it hopes to prompt them to buy. When used correctly, e-commerce can be an invaluable tool that informs how a business operates in both the digital and brick-and-mortar spaces. Done poorly, however, it’s little more than a nuisance for customer and company alike.

As we go through the 5 E-commerce Terms Every Business Owner Should Know, understanding how to thrive in today’s e-commerce environment is vital for nearly every business that sells goods and services. But to be able to excel at e-commerce, business owners need to familiarize themselves with the nature of the beast. The era of being able to skate by on online presence alone are long since passed. E-commerce is more sophisticated than ever before, with a vocabulary that’s been developed over the course of decades. To flourish in any environment, you must know the language. With that in mind, here are five crucial e-commerce terms every business owner should know. 

5 E-commerce Terms

Bounce Rate

Getting people to a page on your e-commerce site is one thing, but they’ll need to click through in order to buy. Because of this fact, bounce rate is one of the most important metrics to gauge success. While the definition of bounce rate varies slightly depending on who’s measuring it, but we’ll defer to Google Analytics, who determines based on “the percentage of single-page sessions.” While even the most successful e-commerce platforms can’t eliminate bounce rate entirely, the longer you keep somebody on your site, the better chance you have of converting them. Bounce rate is a complicated metric, and one that shouldn’t be analyzed without context, but it’s a vital snapshot into the health of an e-commerce site. 


Physical inventory, whether in a store or a warehouse, is limited by space. Dropshipping, which is when a retailer orders a product only when they have a customer to ship it to, allows a modern retailer to circumvent this problem. Offering dropshipping is beneficial to a business because it allows them to provide an ever-evolving product mix without having to invest overhead and physical space to do so. It’s basically the modern e-commerce version of the special ordering retailers have done for decades. In this case, though, the customer doesn’t see any of the mechanism that makes their order special. After all, they don’t get where their order arrives from; just that it gets there in good condition in a timely fashion. 

Multichannel and omnichannel

Yeah, we’re cheating a bit here by including two terms, but they’re very closely linked. Multichannel and omnichannel are adjectives that can be applied to a number of processes. Multichannel means using different platforms–e-commerce site, Amazon, brick-and-mortar, etc.–to sell the same goods. Omnichannel efforts involve combining those multichannel processes into a single streamlined experience. From an inventory management perspective, all multichannel engagement has to talk to one another, but that’s not necessarily true for all business operations. Far too many people use the terms interchangeably, but now you won’t be among them. 

Responsive Design 

In 2019, more people engage with the internet on their phones than via desktop. That trend shows no signs of abating and as such, businesses need to make sure their websites work on screens of all sizes. The principle behind this effort is known as responsive design. When your site is responsive, the text size, lay out, images, and more are formatted based on the type of device you log in on. It’s essential for any business that doesn’t want to look like they’re behind the times. 

User Experience (UX)

Maybe the most important term to keep in mind when it comes to your e-commerce site is User Experience (UX). Rather than being about what your site does or looks like, it’s about how users feel when they interact with it. UX takes up entire departments at major companies and is one of the most important considerations for any digital experience. It’s not enough for an e-commerce site to function; it has to be intuitive, easy, and ideally, fun. 
In addition to the vocabulary to discuss modern e-commerce, you need an accounting software that meets the needs of today’s online marketplace. That’s where AccountingSuite can help. Head to our main page for more information.

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