Essential A-Z Amazon Seller Terminologies

New sellers who are starting on Amazon often feel confused and overwhelmed with Amazon's specific vocabulary. New sellers struggle to understand basic terms such as Buy Box, ASIN, or FBA. Without having this background, they may overpay, miss opportunities, and waste valuable time figuring out basic instructions.

Existing sellers needing to scale up their business to further revenues can benefit from a deeper understanding of advanced terms such as DSP, IPI, and TACOS. Many sellers who have found success with their businesses find they hit a ceiling mainly because they simply don't understand how some of the more complicated Amazon tools and metrics can help them access the next stage of their business.

The Help Pages on Seller Central is Amazon's primary and most extensive Resource Center usually detailing what and acronym means, along with how it is useful in real selling.

Related to advertising and Amazon based acronyms such as CPC, CTR, Sponsored Products, etc. you'll be able to get current definitions and best practices through the Console.

More technical terminology such as API, MWS and XML are well defined and documented here for sellers actively using their tools and products.

Finally, the lessons provided on Seller University compile even the most complex ideas into digestible lessons that help sellers understand how various terms are connected.

ACOS is a metric used to measure advertising efficiency by taking ad spend divided by sales from advertising and creating a ratio. Lower the ACOS, better as this means you are spending less money to generate each dollar of revenue. This metric will help you determine whether or not you are advertising profitably and sustainably.

ASIN stands for Amazon Standard Identification Number and Amazon's unique identifier assigned to a products listing. It is a combination of 10 alphanumeric characters. Every product variation or selection (i.e. different sizes, colors etc) is assigned it's own ASIN so Amazon can keep track of millions of products in catalog.

API allows third parties (i.e. software and tools) to connect to Amazon's systems to facilitate automated data transfer. Using APIs, sellers are able to use inventory management systems, repricing tools and analytics platforms that sync all data between the seller account and other tools.

AMS used to be the name of Amazon's advertising platform, now its called Amazon Ads. It was renamed because Amazon Ads offers more than just AMS, you can advertise in a variety of ways, including sponsored products, sponsored brands, and sponsored display. The name now reflects Amazon's increased capabilities with respect to ads and more simply branding strategy.

AMZ is just the standard abbreviation for Amazon, used pretty much everywhere in the ecommerce community. The ecommerce community uses AMZ all over seller forums, tools, courses and generally in discussion. Everyone in the industry is really just trying to save time and space when they write or type in reference to Amazon.

ACR refers to the ranking system that Amazon uses for products that are awarded the "Amazon's Choice" badge. This badge is given to products chosen by the Amazon algorithm based on pricing, availability, shipping speed and customer reviews. ACR products typically have more visibility and increased sales as a result.

You have probably heard of the "Buy Box." The Buy Box is the large "Add to Cart" area on the product detail page where customers can directly purchase the item. When there is more than one seller selling the same product, Amazon uses an algorithm to determine which seller gets to keep the Buy Box based on pricing, fulfillment method, seller metrics and available inventory. In general, 80-90% of sales for a product are from the seller who wins the Buy Box.

BSR stands for Best Seller Ranking. It is Amazon's ranking system that indicates how a product sells compared to other products within its category. BSR updates hourly, and the lower the rank, the more a product sells. A product can have multiple BSR rankings across different categories, if it is listed under different appropriate categories.

B2B means Business to Business. In the case of Amazon, B2B refers to Amazon Business, which is a standalone platform designed strictly for bulk buying by businesses, schools, and organizations. Many features of Amazon B2B are specific to such B2B platforms, including bulk price and business-only pricing, tax exemption features, and purchase orders. Pricing and quantity structures for products sold on a B2B model will often differ from the same product on the B2C model.

B2C means Business to Consumer. This is the traditional Amazon marketplace and the basics of what most people associate with Amazon shopping, where businesses sell products to end consumers directly. Typical B2C shopping is as follows: purchase one item, pricing related to buying one item, and which would have comparable expectations in customer service to an average retail customer service experience.

CPC is the amount you pay each time a person clicks on your ad on Amazon. CPC can vary widely based on many variables, including competition, keyword difficulty, and your bid. Lower CPC indicates the advertising source, and traffic you are driving, is cheaper for your cost-per-visitor based on impressions.

CTR is the percentage of people who click your ad after seeing it. CTR is measured by clicks over impressions---so the higher the CTR, the better your ads' creative and targeting matches what the audience is looking for. CTR is extremely important; Amazon wants ads with high CTR because they all want happy shoppers and users, and Amazon rewards high CTR ads with better placement and cost perhaps even lower ad-bids.

COGS is the total dollar amount associated with the direct costs of producing and sourcing your product, typically including materials, labor, and manufacturing. This is a very impactful metric because it's the basis of calculating profit margins and competitive pricing. Having a good awareness of all the factors that feed into your COGS will help ensure you are being sustainably profitable when looking across your product portfolio.

CPM is the cost to deliver your advertisement 1,000 times no matter the clicks received. This is an important metric if you are running an impression-type campaign, as the goal is for exposure, rather than clicks. CPM bidding can be a very affordable way to build brand awareness and get your brands understanding out to your target customers.

CRaP is Amazon's internal label for products that don't make a profit because the fulfillment costs exceed the selling price. Generally, CRaP items have a size/weight ratio that is less than ideal, making FBA uneconomical, or they have such low price points that the profitability isn't feasible. Understanding CRaP allows sellers to avoid launching products that will net a loss due to Amazon unable to fulfill cost effectively.

DSP is Amazon's programmatic advertising platform that allows advertisers to buy display and video ad inventory on Amazon and other websites. This sophisticated platform allows for advanced targeting and retargeting campaigns in comparison to traditional Amazon PPC. Typically, you will need higher budgets and progessively more complex campaign management with DSP.

DP refers to the detail page for the individual product listing where a customer can view important product attributes like images, descriptions, reviews and make purchase decisions. When you are building your detail page, it is important to include engaging content, high quality images and strategic keywords to convert sales. The detail page is your primary sales tool performing on the Amazon platform.

DTC refers to the model of selling direct to the end customer with no intermediaries like wholesalers or retailers. In an Amazon context, this is generally the brand selling their own products - not through distributors. DTC benefits a seller with enhanced profit margins, brand control, and customer interactions.

FBA is Amazon's fulfillment service, meaning that they take your inventory and store it in their warehouses, and also handle the picking, packing, shipping, and customer service for those orders. Products fulfilled by FBA are allowed into Prime shipping, and usually have a more favorable ranking in search results. Using FBA simplifies your logistics, but there are significant storage and fees, and specific packaging requirements.

FBM means, the seller manages, handles and fulfills all order fulfillment operations - including the storage, packing, shipping, and customer service themselves from their own operations. FBM gives the seller substantially more control and margin potential, but added operational overhead. An FBM seller also needs to meet Amazon's service expectations with regards to shipping and customer service in order to compete with other FBM sellers.

FNSKU is Amazon's unique barcode identifier for each product that a seller sends to an FBA warehouse, that links a specific inventory to a specific seller account. Every unit needs to have an FNSKU label on it, for FBA purposes in order to allow Amazon to track the units properly within their supply chain and allocate the units to the appropriate seller accounts. This avoids inventory issues associated with unit commingling.

FC, refers to Amazon's massive warehousing facilities, located all over the world that store, process, and ship out FBA inventory. These huge fulfillment centers have a much higher degree of automation, and are critical to allowing Amazon to make their shipping promises to customer and sell millions of products. Understanding how FCs work helps sellers optimize their strategies around shipping, and better distribute their inventories.

FIFO stands for "first in, first out," an important strategy within inventory management in which the oldest inventory is sold first. It is particularly important for products that have an expiration date or that are seasonal in nature. Amazon almost always will use FIFO for FBA inventory to ensure that products are minimized for waste and utilize the freshest products. FIFO can also help maintain a higher level of product quality while reducing the risk of selling expired inventory.

IPI is Amazon's quarterly score (0-1000) calculated based on how effectively sellers manage their FBA inventory. It ranks sellers on many factors, including how much inventory sellers can turn, stranded inventory, and inventory excess. Low scores on IPI can, for example, restrict storage limits and increase seller fees. The main issue of maintaining a higher IPI is balancing the amount of inventory you keep on hand with your sales velocity.

IP is the legal claim of brands, trademarks, patent, and copyright ownership above that prevents others from using the brand, trademark, and patent on Amazon without permission. Strong IP protection is crucial for registering as a brand to prevent counterfeits, maintain control on pricing, and other seller competitiveness. Being aware of how IP works can help sellers in avoiding issues with their own products and provide insight into Amazon's brand protection policies.

IVP is an Amazon program allowed by invitation only that means sellers will receive temporary fee discounts or temporary rebates to increase sales volume in a category or business. In effect, IVP allows Amazon to increase its inventory turnover and sellers get to utilize a competitive, cost advantage. In most cases, sellers can participate only after meeting certain volume or specific performance objectives.

MAP is the minimum price brands permit to advertised MSRP products by their authorized retailers; however, sellers are permitted to go below MAP provided they do not advertise the lower price. MAP policies help brands preserve pricing integrity and profit margin across their distribution network. If a seller violates MAP agreements, their authorized status could be revoked.

MOQ refers to the minimum quantity that a supplier will sell in one transaction, and relates directly to the sellers cash-flow and future stock planning decisions. Higher MOQs will usually relate to lower per-unit costs but require more invested cash up front. Understanding MOQ requirements is important for new sellers who are also planning their first purchases of inventory as well as their ongoing replenishment purchases.

MWS is Amazon's API framework used by third-party software developers to connect their software into seller accounts for data exchange and operations automation. This connection means third-party inventory automation tools, repricing software, analytics platforms, and others, can function smoothly. MWS connections are critical for new sellers who want to efficiently scale their operations.

ODR is Amazon's metric for calculating order defects - which includes negative feedback, A-to-Z guarantee claims, or credit card chargebacks over a rolling 60-day period - as a percentage. ODR is required to be less than 1% to maintain a good account status with Amazon, however, high ODR rates can lead to possible account suspension, making ODR a significant performance metric.

Out of Stock (OOS) occurs when a product is out of inventory. An out-of-stock situation can immediately affect your search ranking, advertising, and sales velocity. If a product is out of stock for too long, it could permanently hurt the ranking of the product and take a lot of work to fix. Demand forecasting and inventory management are crucial to maintain an outstanding stock (OOS) rate on a product.

Online Arbitrage (OA) is the act of purchasing a product from an online retailer, selling it on Amazon at a higher price, and turning a profit. Reselling on Amazon through OA will take research to determine price discrepancies from different platforms and a strong understanding of Amazon's policies regarding retail arbitrage. OA can be a competitive market, with a low barrier to entry.

PPC stands for the Amazon advertising space where sellers can bid on keywords to sell their products and will only incur a cost if a shopper clicks their ad. Managing PPC takes time to research keywords, optimize your bid, and building a campaign structure to generate the highest return on ad spend for your product. The PPC campaign strategy is valuable if you want productive exposure to your product and sales volume on Amazon as a seller.

Purchase Order (PO) is a formal document that confirms a buyer's offer to purchase specific quantities of products from a supplier. In Vendor Central, a PO may also be an indication of an order from Amazon to be included in inventory. A PO will outline terms of sale, the quantities to be produced, unit prices, and delivery timeline, if relevant between parties with a business relationship. Efficient PO will help to ensure that your supply chain operations run smoothly when planning to re-supply your product into inventory.

PL, or Private Labeling involves developing and selling your own branded products. This may consist of working with manufacturers to customize existing products or innovate unique one. Since Private Labeling provides you with higher margins in profitability, control of brand, value building in the long-term, essentially every seller should be considering PL's. You must be able to develop products, brand products and market products in order to succeed with a PL.

A PDP, or Product Detail Page, is a complete listing page of a product that consists of all the information your customers might need to make a buying decision, including product images, product descriptions and specifications, and product reviews. When optimizing PDP's, you will want to include compelling content, relevant strategic keywords, and high-quality images. All of which will have a direct impact on your conversion rates. To summarize, the PDP functions as your main sales presentation as a seller.

ROI, or Return on Investment, is used to measure the profitability of an investment by dividing the profit earned from the investment, to the amount of money invested expressed as a % ratio. For Amazon sellers, ROI is applicable to purchases of inventory, ad spend, and business investments. By learning and utilizing ROI, you can prioritize your investment of resources and gain an understanding of how you should be performing against other aspects of your business.

ROAS, or Return on Advertising Spend, defines how effective your advertising is by dividing the total revenue generated from ads by how much was spent on advertising. A ROAS of 3:1 means that for every $1 spent on ads will generate $3 in revenue. It can help to optimize advertising budgets in total, and reveal your most successful campaigns, ad spend and keywords.

RMA stands for Return Merchandise Authorization and describes what customers go through to return something to a seller. Part of the RMA process includes the seller providing authorization and following specific procedures to complete the return. In the case of FBA sellers, Amazon takes care of the majority of the RMA process while FBM sellers will complete the return process themselves. Knowing about the RMA process is a good way to keep customers happy and know what is going on with your inventory.

SKU is short for stock keeping unit and is an internal review used by sellers to track, manage, and account for their inventory. This is different from ASIN that could be in advertising or marketing. Good SKU systems help sellers keep inventory organized by category, supplier vendor, etc. Having a decent SKU structure is particularly useful for inventory management reporting across multiple selling platforms.

SC is a way to refer to Amazon seller central which serves as the dashboard and management system. This is where sellers create listings, manage viewable inventory, view seller performance metrics, and handle communication with customers. As a seller, it is really important to know the ins and outs of Seller Central features and reports in order to manage your Amazon business effectively. The seller central platform is essentially the mission control for all seller functions.

SP are sponsored products which refer to ads that are shown in search results as well as product detail pages to promote individual products to relevant shoppers. These ads are run as pay-per-click advertising and can be a great way to boost visibility and sales of a product. Sponsored Product campaigns require keyword research, and bid management in order to achieve good results on Sponsored Products campaigns.

SB is a banner type of advertising that showcase a brand logo and generate interest in several products on a single page. These ads are a great source of brand awareness as they appear at the top of the search results. Since these ads are designed to drive traffic to a landing page, brand store, or custom landing page rather than a single product, the objectives for Sponsored Brands are tied to overall brand building goals instead of trying to get product sales. Sponsored Brands must use brand registry.

SD is an image based ad that primarily targets audiences both on and off of Amazon. These ads can reach audiences through many targeting strategies including product targeting, category targeting, and audience targeting. Sponsored Display ads can also be used to retarget previous visitors and customers outside of the website. Sponsored Display campaigns can provide both awareness and conversion objectives and act as a bridge to long-term equity.

SFP provides qualified sellers the ability to utilize Prime badge benefits while fulfilling orders from sellers' warehouses instead of an FBA center if that seller qualifies for SFP. Meeting both shipping and performance goals ensure that a sellers account is eligible for Prime badge benefits. Although SFP is not as easy to use as FBA, it offers some additional control and provides Prime badge benefits to customers.

TACOS delivers an overall view of advertising efficiency by dividing the total ad spend into a total sales revenue (both organic and paid) to deliver a more holistic view than ACOS. Essentially, TACOS provides value to what advertising does in generating total business profitability instead of solely advertising ROI. TACOS helps sellers to navigate advertising spend against total business growth.

TOS refers to Amazon's complete standards and policies regarding seller activity and their account status on the platform. By knowing and adhering to TOS, you mitigate the risk for violating their policies and risking an account suspension or termination down the road. You should review TOS often because Amazon makes changes to their requirements often.

TSV is the file format used when working in bulk, or batch, filing to Amazon. TSV files utilize tab characters to separate data fields. TSV files can be used when managing some inventory, pricing updates, and catalog management bulk operations. Like any file import file format, conforming to the TSV rules is often the difference between a successful file upload or a data sync between your application and Amazon.

UPC is the identifier (called a barcode) that's required for the majority of products that you'll be listing on Amazon. A UPC is a 12-digit length number that's used globally to identify a unique product. If you are able to find legitimate UPC's through GS1, this is very necessary if you want to create new listings, which are also requirements for Amazon policies and knowing the level you need to operate on if you're registered with a brand level. Some categories require UPC while others do not depending if you're registered with a brand level.

USP is best described as the unique selling proposition for your product versus the other competitors. Your USP provides the framework for your marketing message and business positioning strategy. Having a strong USP can help you clearly and concisely differentiate your product among a large number of products and categories, and it provides justification to hold premium pricing. Generally, good USPs address a defined customer need or defined customer problem.

VC is Amazon's invitation-only system for manufacturers and distributors who sell wholesale directly to Amazon who is then selling to customers. To clarify, with Seller Central you are selling to Amazon as a vendor, rationale being that you are truly selling a product through Amazon as a marketplace. VC has different fee structures and operational processes.

VAT is a consumption tax on goods and services that is applicable to many of the international markets that Amazon operates in, and organizations who are selling to VAT applicable countries need to understand their registration, collection, and remittance obligations. To avoid penalties, VAT must be compliant, and for those doing business in areas with VAT, compliance must be built into your pricing. VAT is complex.

WBR is used to refer to regularly scheduled performance review meetings or reports that cover key metrics, trends, and indicators of overall business health. WBR can be particularly helpful to Amazon sellers by keeping track of where you are against your goals and offering insight into areas that might need some improvement. Engaging in frequent WBR practices helps with data driven decision making, meeting goals, and optimizing your business.

WFS is Walmart's service fulfillment service similar to Amazon's FBA service, and comes up when sellers are comparing multi-platform strategies or are actually considering diversifying outside of Amazon. It is beneficial for sellers to understand viable fulfilment solutions when comparing competitors at Amazon and in these cases WFS represents an alternative to being solely dependant on Amazon.

XML is a format for structured data that is used for advanced catalog managment, as well as complex data feeds for products and data integration in systems. XML feeds allow sellers to do bulk uploads for products, and updates on inventory and other data directly into Amazon, using Amazon's API to execute synchronization solutions between their sellers' systems and Amazon. Knowing that it is a structured format is very beneficial for catalog management.

YTD refers to cumulative metrics from the start of this year until current date, and it gives sellers context in annual performance. It helps sellers buyers understand current performance against annual expectations and make necessary course corrections to reach their annual expectations. YTD updates are very commonly done in well-run products, from a business perspective.

ZTO relates to major policy violations on Amazon that may lead to immediate suspension without any warning or prior notification. Examples of ZTO violations may include but are not limited to: review manipulation; safety violations; infringing on a patent, copyright, privacy, or intellectual property (IP); and other serious violations of serious policies of the seller. Knowing ZTOs will help sellers avoid self-inflicted career-ending mistakes. Recovering from policy violations of this magnitude is rarely easy; in many cases, it is not achievable.

Amazon uses over 200 abbreviations and formations for terminology across many seller tools and platforms. It was a challenge to determine which abbreviations and terms are most important for seller success by reviewing thousands of support tickets and questions from clients. Balancing comprehensive terminology with useful terminology is part of the reason for creating this resource.

Due to a rapidly evolving environment, Amazon makes frequent adjustments, changes, and developments to their policies, tools, and terminology. What AMS meant two years ago is totally different now (now referred to as Amazon Ads). And it was unclear what to maintain as definitions changed and matured over time.

New sellers want a basic understanding of high-level terms, whereas more experienced sellers want a breakdown of the applications. In creating posts, I want to account for the differences in skill level, so the more experienced seller does not fall asleep while the new seller has no clue what the post is explaining.

I developed a ranking system predicated on frequency of questions from the client and the impact on the client's business. Terms that had a potential impact on the health of a seller's account, or impacted the profitability of an account, were ranked as higher priority. This system was designed to present the most valuable information first.

I implemented regular quarterly review periods for all definitions, and compared them to the most recently updated Amazon policy changes, as well as any new feature updates. This keeps the information relevant and accurate to what is currently happening with the Amazon policies.

Each term will have a base definition, then examples that demonstrate practical applications. This design allows for beginner-level interventions, as well as deep diving for advanced users.

By understanding terminology, sellers no longer have to "guess" what certain terms mean, and thus risk making costly mistakes. You will conversate with suppliers with a professional understanding, and you will understand Amazon policies in layman's terms, enabling you to make informed decisions from day one.

Once experienced sellers understand the advanced definitions of terms like DSP, IVP, and B2B - it opens the door to growth strategies that require the use of advanced language. You will be able to manage campaigns with optimization instead of trial and error, negotiate better deals with suppliers or shipping companies, and scale with ease.

Building a familiarity with the terminology creates time efficiency, reduces stress, and increases profitability - regardless of new or experienced. Sellers will troubleshoot problems with Amazon, implement new strategies, and communicate significantly better with their suppliers, stakeholders, or team.