The ABC's of DTC

An alphabetical guide to many of the common acronyms used by brands.


3PL (Third Party Logistics)

An outsourced provider for: distribution, warehousing, and  fulfillment services.


AOV (Average Order Value)

Calculated by dividing the total revenue by the number of orders placed ie: $1000 in revenue with 50 orders (1000/50) would have a $20 AOV.


API (Application Programming Interface)

A software intermediary that allows two or more applications to communicate with each other. This is how a lead capture platform like Privy would pass the email address collected to Klaviyo. 


ARR (Annual Recurring Revenue) 

The value of contracted revenue normalized to a one year period, this is applicable to subscription or a SaaS businesses.


B2B (Business To Business)

Companies with commercial transactions with other companies ie: Dunder Mifflin is a B2B company selling paper to local businesses in Scranton and the surrounding area.


B2C (Business To Consumer)

Companies that transact directly with the end consumer.


CAC (Customer Acquisition Cost)

Marketing costs divided by new customers ie: if you spend $1000 on marketing to acquire 200 new customers your CAC would be $5


CDN (Content Delivery Network / Content Distribution Network)

Geographically distributed network of servers and data centers attempting to provide optimized performance and delivery. 


CMS (Content Management System)

A software or application that uses a database to manage all content and developing a website. Wordpress and Shopify are two examples of a CMS.


COD (Cash On Delivery / Collect On Delivery)

The sale of goods where payment is made upon delivery instead of being collected in advance. 


CPA (Cost Per Acquisition) 

Total marketing cost divided by attributed conversions, this can mirror CAC if you’re measuring conversions but an ‘acquisition’ could also be measured as a lead capture.


CPC (Cost Per Click)

An advertising term used to analyze the cost required to click a link directed to your website.


CPG (Consumer Packaged Good)

Items that are consumed frequently by customers that require replacement or replenishment ie: food, beverages, supplements, cosmetics, etc


CPM (Cost Per Mille / Cost Per Thousand Impressions)

An advertising term used to price 1000 impressions of your ad on a website ie: If a website has a cost of $2 CPM you would pay $20 for 10,000 views of an ad on their website.


CRM (Customer Relationship Management)

The process of managing interactions with potential, current and previous customers.


CRO (Conversion Rate Optimization)

The practise of increasing the percentage of users who take a desired action on your website, typically this is done to improve add to cart or conversion rates but this can also be used to get visitors on to high value pages or to improve the about of leads captured by a website popup, among many other tasks.


CSS (Cascading Style Sheets)

The style sheet language for designing and modifying webpages, this can allow for control over fonts, colors,  spacing, etc.


DTC (Direct To Consumer) 

Refers to selling items directly to the consumer, bypassing distributors or wholesalers to get products in the hands of customers. 


EDI (Electronic Data Interchange)

A way of businesses transmitting information that was historically done in a very analog way, things like purchase orders or invoices.


ERP (Enterprise Resource Planning)

A business process management system that can combine most elements of a business such as: sales, accounting, finance, CRM, procurement, production, distribution, etc


ESP (Email Service Provider)

A platform that allows users to send email campaigns to a list of recipients, the basic requirement of an ESP is to store contact information and send emails but the advancements that platforms like Klaviyo have made go far beyond those two basic requirements. 


GMV (Gross Merchandise Value)

The total amount of sales a company has made over a set period of time, before accrued expenses are deducted. It is usually measured on a quarterly or annual basis.


IMS (Inventory Management System / Inventory Management Software)

Software designed to manage inventory levels, orders, sellthrough, and replenishment of your items.


LTL (Less Than Truckload)

The transportation of goods that does not require a full transport trailer.


LTV (Lifetime Value)

The projected revenue a customer will generate during their lifetime. 


MMS (Multimedia Messaging Service)

The sending standard for content to a mobile phone over traditional carrier networks.


MRR (Monthly Recurring Revenue) 

Recurring revenue normalized into a monthly amount. Calculated by taking the total number of active customers multiplied by the average monthly billed amount.


OOS (Out Of Stock)

The event where inventory is insufficient.


PCI (Payment Card Industry)

PCI Compliance is the information security standard for payment processing on the internet.


PPC (Pay Per Click)

An marketing model where you pay a fee for each time one of your ads is clicked.  


ROAS (Return On Ad Spend)

A measurement of gross revenue generated for every dollar spent on advertising.


ROI (Return On Investment)

A ratio of net profit to the cost of the investment. 


SEM (Search Engine Marketing)

Paid strategies that can be used  to increase visibility on search platforms. 


SEO (Search Engine Optimization)

The process of improving both the quality and quantity of traffic brought to your website from organic searches rather than paid efforts or direct traffic. 


SKU (Stock Keeping Unit)

A field of inventory management unique to each item that is sold.


SLA (Service Level Agreement)

A commitment between a service provider and a client.


SMS (Short Message Service)

It is one of the oldest messaging technologies, also the most frequently used. This is the method of sending a text from one mobile device to another.


SSL (Secure Sockets Layer)

A protocol for establishing a secure connection between a browser and a website. The SSL certificate binds together the domain name, server name and host name. 


TOS (Terms Of Service)

Legal agreements between a service provider or website and the user or visitor. 


UGC (User Generated Content)

Any content (text, review, image, video) that is created by people rather than the brand.


VAT (Value Added Tax)

A consumption tax placed on goods or services, this will vary depending on your product and location.


WMS (Warehouse Management System / Warehouse Management Software)

A software built to manage and support your warehousing operations.

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