You do not need an MBA to sell online, but knowing a handful of common e-commerce terms helps you make better decisions and avoid being confused by tools, agencies, and guides.
Why the words matter
Every industry has its jargon, and e-commerce is full of it. Understanding the key terms means you can read guides, use tools, and talk to service providers without getting lost or oversold. A little vocabulary saves a lot of confusion.
Know the words, and no one can baffle you into a bad decision.
Terms worth knowing
The essentials in plain words:
- Conversion rate — the share of visitors who actually buy
- COD — cash on delivery, paying when the order arrives
- SKU — a unique code for each product or variant you stock
- Cart abandonment — when someone adds to cart but does not check out
- SEO — getting found on Google without paying for ads
- AOV — average order value, how much a typical order is worth
Use the terms to spot problems
These words are really diagnostic tools. A low conversion rate points to a store or trust problem; high cart abandonment points to a checkout issue. Knowing the terms helps you name what is wrong so you can fix it.
Learn as you grow
You do not need to memorise everything at once. Learn the terms as they become relevant to your store. The point is not to sound clever — it is to understand your own business well enough to improve it.
The money words
These four decide whether your store is a business or an expensive hobby, so learn them first.
Average order value (AOV)
Total sales divided by number of orders. If you did Rs 200,000 across 100 orders, your AOV is Rs 2,000. It matters because your delivery cost is roughly the same whether an order is Rs 900 or Rs 2,700 — so raising AOV through bundles improves margin faster than raising order count.
Conversion rate
The share of visitors who buy. 20 orders from 2,000 visitors is 1%. This single number tells you whether your problem is traffic or the store itself: low conversion with decent traffic means the store is leaking, and buying more visitors would be paying to fill a leaking bucket.
Customer acquisition cost (CAC)
What you spent to win a customer. Rs 10,000 of promotion producing 20 new customers is Rs 500 each. Compare it against your margin per order — if you earn Rs 600 per order and pay Rs 500 to acquire, you need repeat purchases to actually make money.
Margin
What is left after all costs of the sale, not just the product. A Rs 1,500 item costing Rs 900 looks like Rs 600 — until you subtract Rs 100 delivery, Rs 30 packaging, and Rs 40 gateway fee, leaving Rs 430.
The operations words
- SKU — a unique code for each product variant. Red size M and red size L are two SKUs, and treating them as one is how stock records go wrong.
- Stockout — being out of something people want to buy. Every stockout is a sale given to a competitor.
- Lead time — how long from ordering stock to having it sellable. Longer than you think for imports.
- Reorder point — the stock level at which you must reorder to avoid running out during the lead time.
- COD — cash on delivery, and in Nepal a large share of orders.
- RTO — return to origin: a dispatched parcel that comes back undelivered, costing you both delivery legs.
The marketing words
Cart abandonment is someone adding to cart and leaving without paying — usually caused by surprise delivery charges, forced signup, or a missing payment option. SEO is getting found on Google without paying for the click; slow to build, and it keeps working afterwards. Organic means traffic you did not pay for, as opposed to paid. Retention is whether customers come back, and it is usually the cheapest growth available to a Nepali store.
Using the words as diagnostic tools
The point of learning these is not vocabulary — it is being able to name what is wrong. Consider three stores each doing Rs 200,000 a month and each wanting to grow.
The first has good traffic and 0.5% conversion: its problem is trust and clarity on the page, not marketing. The second converts at 3% but has almost no visitors: its problem is distribution. The third converts well and gets traffic but has an AOV of Rs 700 and pays Rs 150 per delivery: its problem is basket size, fixed by bundling rather than by more customers.
Same symptom — flat revenue — three completely different fixes. Without the vocabulary, all three founders say "I need more customers", and two of them waste money finding them.
Frequently asked questions
Which number should I watch weekly?
Conversion rate and repeat-order share. Together they tell you whether the store persuades people and whether they come back — the two things that decide long-term profitability.
What is a good conversion rate in Nepal?
It varies widely by product and traffic quality, so compare against your own past performance rather than a borrowed benchmark. The useful question is whether it is improving.
Do I need analytics software?
Eventually. To start, counting orders and asking customers where they found you will answer most questions — see using analytics to make business decisions.
The delivery and payment vocabulary
These come up daily in conversations with couriers and gateways, and not knowing them costs money.
- Remittance — when the courier pays you the cash they collected on delivery. The gap between delivery and remittance is working capital you cannot use.
- RTO (return to origin) — a dispatched parcel that comes back. You pay both legs and earn nothing.
- Settlement — when gateway money actually reaches your bank, which is not the same moment the customer paid.
- Chargeback — a customer disputing a payment with their provider after the fact.
- Zone rate — courier pricing that varies by destination, which is why flat delivery charges lose money at distance.
Terms that describe how you grow
Churn is customers who do not come back — the opposite of retention, and the silent killer of stores that only chase new buyers. Lifetime value is the total margin a customer produces across all their orders, and it is the number that justifies spending to acquire them. Attribution is knowing which channel produced a sale, without which you cannot decide where to spend effort.
Upsell means selling a better version; cross-sell means selling a complementary item. Both raise order value without new customers.
Using vocabulary to talk to suppliers and couriers
There is a practical negotiating benefit here that sellers underestimate. A courier quoting "Rs 120 per parcel" is telling you very little. Asking about zone rates, RTO charges, remittance cycle, and weight thresholds gets you the actual cost structure — and signals you are a seller who will notice discrepancies.
The same applies with suppliers: asking about lead time, minimum order quantity, and defect handling produces better terms than asking only about unit price. Knowing the words is how you stop being quoted the beginner's rate.
The short version
Knowing key e-commerce terms — conversion rate, COD, SKU, cart abandonment, SEO, AOV — helps Nepali sellers make better decisions and avoid being confused or oversold. Treat the words as diagnostic tools and learn them as your store grows.
Comments
Be the first to comment.