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Imagine buying a hot product for a steal and selling it for a tidy profit elsewhere. That's arbitrage in a nutshell! But don't be fooled by its simplicity—this dynamic industry is packed with insider terms that can leave newcomers scratching their heads.
Fear not! We've got your back with this game-changing glossary. We've distilled the essential arbitrage vocabulary into bite-sized, easy-to-digest definitions. You’ll also find related resource links so you can learn even more about specific terms. From cracking the code of ROI to becoming an FBA pro, this power-packed resource is your ticket to arbitrage mastery.
Ready to transform from newbie to know-it-all? Bookmark this page, it’s your new secret weapon in the arbitrage arena. From ACoS to VAT and everything in between, let's unlock the language of profits together!
A/B Testing
Comparing two versions of a webpage or ad to see which performs better. This helps optimize marketing strategies by determining which version appeals more to customers.
ACoS (Advertising Cost of Sales)
Measures the effectiveness of your advertising by dividing ad spend by sales generated from ads. A lower ACoS indicates better ad efficiency.
Amazon Affiliate
A program where individuals earn commissions by promoting Amazon products. The unique affiliate links let sellers track sales generated from the referrals.
Amazon Authorization
The permission granted by Amazon to a seller to list and sell products on their platform. This authorization is often subject to specific requirements and ongoing performance metrics.
Amazon Category
A specific classification within the Amazon marketplace where products are grouped based on their type or function. Sellers must carefully select the appropriate category for their products to optimize visibility and sales.
Amazon Fees
The charges imposed by Amazon on sellers for various services, including referral fees, fulfillment fees, and storage fees. Understanding these fees is crucial for calculating profitability.
Amazon Flips
A term used to describe the practice of purchasing products from Amazon at a discounted price, often during sales or promotions, and then reselling them for a profit, either on Amazon or another platform.
Amazon Reimbursements
Funds returned to a seller by Amazon for various reasons, such as product defects, shipping errors, or incorrect charges. Effectively claiming reimbursements is essential for maximizing profits.
ASIN (Amazon Standard Identification Number)
A unique code for every product on Amazon. It's like a product's fingerprint.
B2B (Business-to-Business)
Transactions between businesses, such as a wholesaler selling to a retailer. These transactions often involve larger quantities and higher values.
B2C (Business-to-Consumer)
Transactions between businesses and consumers, like a retailer selling directly to the public. This is the most common type of transaction.
Bundle
A combination of multiple products sold as a single unit at a discounted price. Bundling can increase average order value and attract customers.
Buy Box
The prominent sidebar on an Amazon product page where customers can purchase an item. It includes the product offer, price, availability, and purchase options such as "Add to Cart" and "Buy Now." Winning the Buy Box is crucial for maximizing sales as it is the primary purchase point for most customers.
CAC (Customer Acquisition Cost)
The cost of acquiring a new customer, calculated by dividing total acquisition costs by the number of new customers. Lowering CAC is crucial for profitability.
Cashback
Getting money back after making a purchase, often through credit cards or rewards programs.
COGS
The total cost of producing or acquiring products sold by a business. COGS is a crucial factor in determining profit margins.
Clearance
Items that are heavily discounted because a store wants to make room for new products. These can be great for arbitrage.
CLV (Customer Lifetime Value)
The total revenue a customer is expected to bring over their lifetime. Understanding CLV helps businesses allocate resources effectively for long-term growth.
CPC (Cost Per Click)
The amount you pay each time someone clicks on your ad. This model helps control advertising costs and measure ad effectiveness.
CPM (Cost Per Mille)
The cost per thousand impressions of an ad. It's a common metric for pricing online ads, focusing on visibility rather than engagement.
CTR (Click-Through Rate)
The percentage of people who click on your ad after seeing it. A higher CTR indicates more effective ads.
DataSpark
DataSpark is a sophisticated tool built for Walmart Marketplace sellers. It analyzes vast amounts of data to help online sellers identify profitable products. By examining market trends, competitor pricing, and product information, DataSpark provides valuable insights to optimize sales and maximize profits. It's like having a personal analyst for your online business.
Dropshipping
A fulfillment method where a seller doesn't keep the products they sell in stock. Instead, when they sell a product, they purchase it from a third party and have it shipped directly to the customer.
Due Diligence
Due Diligence is like doing your homework before buying a product. It means researching the product to make sure it's a good investment. This includes checking for brand restrictions, competition, and potential profit margins.
EAN (European Article Number)
A barcode standard used internationally for tracking products. It ensures product identification across different countries.
ETA (Estimated Time of Arrival)
When a shipment is expected to arrive., iImportant for managing customer expectations and inventory planning.
Estimated Monthly Sales
A projected amount of revenue generated from product sales within a month. This metric is essential for inventory planning and financial forecasting.
FBA (Fulfillment by Amazon)
Amazon stores, packs, and ships your products for you. You pay a fee for this service.
FBM (Fulfilled by Merchant)
You handle storing, packing, and shipping your own products sold on Amazon. This is also referred to as Merchant Fulfilled.
FNSKU (Fulfillment Network Stock Keeping Unit)
A unique identifier used by Amazon to track products within its Fulfillment by Amazon (FBA) network.
GTIN (Global Trade Item Number)
A globally recognized identifier developed by GS1, an organization that maintains international standards for product identification.
Gated Categories
Product categories on Amazon that require specific approval or qualifications from sellers before listing products. These categories often have stricter requirements due to product restrictions or brand protection.
Gift Cards
Gift Cards are like prepaid money for a specific store. You can often buy them at a discount, which means you're saving money on your purchases.
Hazmat (Hazardous Materials)
Hazardous materials that require special handling and shipping regulations due to their potential risks. Certain products classified as hazmat have restrictions on Amazon.
IP Complaint
This happens when a brand says someone is selling their products without permission. It can lead to a negative impact on Amazon account health—and to your seller reputation.
ISBN (International Standard Book Number)
A unique identifier for books, simplifying the process of cataloging and selling books internationally.
Inbound Shipping Fees
Charges incurred by sellers for shipping products to Amazon fulfillment centers. These fees vary based on product dimensions and weight.
Inventory Management
Keeping track of your products to make sure you have enough stock but not too much.
Invoice
A formal document issued by a wholesaler or distributor to a seller, detailing the purchase of specific products. Amazon often requires invoices as proof of legitimate product sourcing to grant category approval or resolve account issues.
IPI (Inventory Performance Index)
A metric used by Amazon to measure the efficiency of a seller’s inventory management. It considers factors like excess stock, sell-through rate, and stranded inventory, among others.
MCF (Multi-Channel Fulfillment)
Amazon fulfills orders from sales channels other than Amazon, like your own website. This helps streamline operations across multiple platforms.
Market Trends
Market Trends are the general direction that something is moving over time. In business, it means figuring out what people want to buy and when they want to buy it. Knowing market trends helps sellers decide which products to offer and how to price them.
Meltable Inventory
Products that are susceptible to melting, such as chocolate or candles, requiring special storage and shipping conditions. This kind of inventory can only be sold on Amazon during specific times of the year.
Online Arbitrage
The practice of purchasing products from one online retailer and reselling them on another platform for a profit. This business model capitalizes on price discrepancies between different marketplaces.
Online Marketplace
A platform where multiple sellers can offer products or services. Examples include Amazon, eBay, and Etsy, providing a broad audience for sellers.
Oversize
Products with dimensions exceeding Amazon's standard shipping requirements, often resulting in higher shipping fees.
P&L (Profit and Loss)
A financial statement summarizing revenues, costs, and expenses over a period. It helps assess a business's financial health.
P2P (Peer-to-Peer)
Transactions between individuals, often facilitated by platforms like eBay or Craigslist. P2P can include buying, selling, or renting goods and services.
PPC (Pay Per Click)
An advertising model where you pay each time your ad is clicked. It allows for targeted advertising and budget control.
Prep Center
A third-party service that prepares products for fulfillment by Amazon, including labeling, packaging, and polybagging.
Price Elasticity
How much the demand for a product changes in response to price adjustments.
Price Tanking
When a seller dramatically lowers the price of a product, often to quickly sell a large quantity.
Private Label
A branding strategy where a company develops its own brand and products to sell. This differs from reselling branded products.
Profit Margin
This is the amount of money you keep after paying for the product. It's the difference between what you sell something for and what you paid for it.
Profit Margin
This is the amount of money you keep after paying for the product. It's the difference between what you sell something for and what you paid for it.
ROI (Return on Investment)
This is how much money you make compared to how much you spent. For example, if you spend $10 and make $15, your ROI is 50%.
ROAS (Return On Ad Spend)
How much revenue you earn for every dollar spent on advertising. It's a key metric for assessing the effectiveness of ad campaigns.
Receipt
A document issued by a seller to a buyer as proof of purchase, often containing details about the items purchased, price, and date.
Repricing
Changing the price of your product to stay competitive with other sellers.
Reseller
An individual or business that purchases products from a manufacturer or wholesaler and then sells them to consumers or other businesses.
Restricted Categories
Some product categories on Amazon require special permission to sell in. These are often brand-protected or regulated items.
Retail Arbitrage
The practice of purchasing products at a discount from physical stores and reselling them online for a profit. This business model often involves finding clearance items, overstock, or products with price discrepancies between physical and online marketplaces.
Retail Store
A physical store where you can buy products to resell online.
Sales Rank
This number shows how popular a product is compared to others in its category. A lower number means it's more popular.
Sales Velocity
How quickly a product sells. A high sales velocity means it's selling fast.
Scanning Apps
Tools that help you check product prices and profitability while you're in a store.
ScoutIQ
ScoutIQ is a product-scanner-on-the-go for finding profitable products to sell on Amazon. This mobile scouting app helps you quickly check item prices, see how well they sell, and calculate potential profits. It’s a tool that tells you which goods are goldmines before you buy them.
Seller ID
A unique identifier assigned to a seller by Amazon, used to track their account information and performance.
SellerRunning
SellerRunning automates cross-border arbitrage for Amazon sellers. It helps you find items to buy on Amazon US and resell for a profit on other Amazon sites, like Amazon Canada and Amazon UK. As a fully Amazon-compliant dropshipping provider with a US-based warehouse, they even take care of the boxes and packing tape so you don’t have to.
SKU (Stock Keeping Unit)
A unique identifier for each product a seller has, used for tracking inventory and sales.
Sourcing
Finding products to sell for a profit. This can be done online or in stores.
Splits
Separating, or splitting, a shipment into separate boxes depending on which Amazon warehouse they’ll be shipped to.
Storefront Stalking
The practice of monitoring competitor product listings and pricing to help you find profitable products to sell.
Suppressed Buy Box
A situation where a seller's product is temporarily or permanently ineligible to win the Buy Box, because of poor performance metrics or policy violations. For example, if you’re pricing products higher than Amazon recommends, you may receive a violation.
TACoS (Total Advertising Cost of Sales)
Measures ad spend as a percentage of total sales, helping assess the overall impact of advertising on profitability.
ToS (Terms of Service)
Rules and guidelines for using a service. Understanding and complying with ToS is crucial for maintaining good standing on any platform.
TRS (Top Rated Seller)
A status given to sellers with high ratings and performance, often resulting in better visibility and increased sales.
Tactical Arbitrage
Tactical Arbitrage is a powerful online arbitrage software designed to streamline product sourcing and maximize profits on Amazon. By providing rapid scans of multiple retail websites, detailed product analysis, and accurate profit calculations, Tactical Arbitrage empowers sellers to discover profitable opportunities with ease.
Targeted Searches
Targeted Searches are like using a magnifying glass to find specific items. Instead of looking at everything, you can use filters and keywords to narrow down your search and find the products you're looking for.
UPC (Universal Product Code)
A barcode used mainly in North America, essential for product identification and inventory management.
Ungated Categories
Product categories on Amazon where anyone can sell without special permission.
Variation
A feature on Amazon allowing sellers to offer multiple versions of a product (e.g., size, color) under a single listing.
VAT (Value-Added Tax)
A consumption tax levied on the value added to a product at each stage of production and distribution in Europe. VAT regulations vary by country.
Wholesale
The sale of products in bulk quantities at discounted prices to retailers for resale.
2D Barcode
A type of barcode that can store more information than a traditional 1D barcode, often used for product tracking and identification.
