eCommerce pricing dictionary

eCommerce pricing dictionary

eCommerce Pricing Dictionary: 99 terms that you need to know

The eCommerce world can be pretty complex, so we decided to make things easier for you. Here are the 99 terms that you need to know in order to gain a better market position.

eCommerce pricing dictionary
  • Acquisition cost

Acquisition cost refers to the total amount of money spent on marketing and promotional activities divided by the number of sales acquired.

  • API integration

API (application programming interface) is a set of functions that allows the connection of two applications. It’s especially important in eCommerce since it allows the integration of a price monitoring tool and your software/database.

  • A/B testing

A/B testing is a process that allows you to test the performance of two versions of the same web page so that you can decide which one brings better results. 

  • Affiliate marketing

Affiliate marketing is usually called third-party marketing. That’s because the publisher and the advertiser team (usually a marketing agency) up in order to attract the customer.

  • Average True Range (ATR)

Average True Range (ATR) is the average of true ranges over the specified period. ATR measures volatility, taking into account any gaps in the price movement. 

  • Backlink

A backlink means that another website has linked yours (or one of your web pages). 

  • Bounce rate

The number/percentage of visitors who leave the website after opening a single page. 

  • Black Friday

Black Friday is known as the day when the most discounts occur. It usually varies between November 23rd and November 29th.

  • Business to Business (B2B)

Business to Business (B2B) is a form of transaction made between businesses. It’s usually contrasted to Business to Consumer (B2C).

  • Business to Consumer (B2C)

Business to Consumer (B2C) is the type of transaction where businesses sell products/services directly to customers.

  • Bundle pricing strategy

A bundle pricing strategy is a pricing strategy in which the seller combines several products and then sells them at a single price instead of charging separate prices for each of them.

  • Break-Even Analysis

The Break-Even-Analysis shows how many sales it takes to pay for the cost of doing business.

  • Brick-and-Mortar

A business that has a physical store rather than just an online one. 

  • Buyers Persona

A buyer’s persona is a semi-fictional representation of your potential customers. It can be created by market research or based on the analysis of existing customers. A buyer’s persona should provide you more relevant information about who your potential customer is – demographic, behavioral pattern, goals, etc. 

  • Call-to-Action

A call-to-action is a way of persuading a customer to make a certain activity (to order, to subscribe, etc.) It’s usually done by using slogans such as “shop now, buy today, get a quote”. Moreover, it can be used as an instruction of what to do next (for example, placing an order, or asking for a quote).

  • Capturing screenshots

Capturing screenshots is a feature that can provide evidence of the captured price on the monitored site. It’s especially useful in cases of price changes, and targeted price violations.

  • Cart abandonment rate

A metric that shows the percentage of potential customers who have left the page before finishing the ordering process. 

  • Consumer behavior

Consumer behavior is most commonly defined by a set of decisions and actions that influence purchasing behavior.

  • Conversion

Probably one of the most important eCommerce terms. Conversion means the process of converting a user into a customer. What will be considered as conversion will depend on the company’s goal. Conversions don’t necessarily need to be financial ones – they can also mean that the contact form was fulfilled, that someone has required a demo session, or that someone is asking for a quote, etc.

  • Conversion funnel

The conversion funnel is usually referred to as the sales funnel and it represents the path that a user has to follow in order to become a customer. It’s called a funnel due to its shape. The entrance is very wide meaning that there are multiple ways to enter it. However, it’s expected that some users will abandon the funnel at some point, therefore its end is very narrow. 

  • Conversion rate

The number of visitors who you managed to convert into paying customers divided by the total number of visits to the page/website overall.

  • Conversion Rate Optimization (CRO)

Conversion Rate Optimization is the process of increasing the percentage of website visitors who make the desired action (become users, fulfill some form, etc.)

  • Cookies

Cookies represent the way a user interacts with the website. They are usually displayed as pop-up text boxes where the user can check what kind of cookies he accepts. 

  • Comparative Advantage

Comparative advantage explains the market situation where a business is able to produce the goods at a lower opportunity cost than the competition. At the same time, comparative advantage allows businesses to price their products lower than the competition and realize stronger sales margins. 

  • Competitor analysis

Competitor analysis is a strategy based on competitor investigation. It helps you identify the most important competitors, research their products and prices, as well as their marketing strategies. 

  • Competitor monitoring

Competitor monitoring is a comprehensive analysis that will allow you to learn more about your competitors’ strengths and weaknesses. You’ll receive an in-depth analysis of your competitors’ strategies and therefore, outranking them will be easier. 

  • Competitive pricing

Competitive pricing or competition-based pricing is a pricing strategy where you take into account the prices of your competitors when setting your products’ prices.

  • Cost-Plus Pricing

Cost-Plus pricing is a pricing strategy in which the selling price is determined by adding a specific markup to a product’s unit cost.

  • Customer lifetime value (CLV)

Customer lifetime value shows the predicted revenue that a certain customer can bring to your business during their interactions with your website.

  • Cyber Monday

Cyber Monday is the Monday that comes after Black Friday. Both days are famous due to the discounts that are happening then. 

  • Demand elasticity

The demand elasticity is the change in demand due to the change in one or more of the variable factors that it depends on.

  • Dropshipping

Dropshipping is a form of supply chain management where the seller accepts orders but does not keep the sold goods in stock. Instead, the goods are transferred to a warehouse or to another retailer who then delivers the goods to final customers.

  • Dynamic pricing

Dynamic pricing is also referred to as surge pricing, demand pricing, or time-based pricing. This is a pricing strategy in which businesses can set flexible prices based on current market demands. To put it more simply, this is a strategy in which product prices continuously adjust. It may be in a matter of minutes, hours, or days, depending on the type of the market.

  • eCommerce

The term refers to online retail in general. The transactions (buying, selling, paying) are done online. 

  • Email Marketing

Email Marketing is commonly used in the eCommerce industry. It means that you are engaging with your audience (presenting products and services, newsletters, discounts, industry news, etc.) by email.

  • Engagement Rate

This metric shows the level of engagement generated from content used in one marketing campaign.

  • Floor price 

The minimum price which the seller is allowed to accept.

  • Geographic Pricing

Geographic pricing means that the price can differ depending on the customers/store location. As eCommerce evolves, many websites have enabled showing different prices (and product information in general) depending on the client’s location.

  • Google Adwords

Google Adwords is one of the most used Google tools. It’s an advertising service that allows businesses to create ads that will be visible on Google. 

  • Google Analytics

One of the most used analytics tools in the world. Google Analytics helps you to track the website traffic in a given time frame, export reports, and follow the trends.

  • Gross Profit Margin

Gross margin is the difference between revenue and cost of goods sold, divided by revenue.

  • Inventory

Inventory (stock) refers to the products that businesses possess with the goal to sell or use them. 

  • KPI (Key Performance Indicator)

A KPI is a performance indicator. Different businesses can set different KPIs depending on their goals. However, the most common ones are total sales, website traffic, shopping cart abandonment rates, conversion rates, etc.

  • Landing page

This page is what a user sees after he clicks. It’s usually a result of a call-to-action. At the same time, it represents the end of the conversion funnel.

  • Law of Supply and Demand

Law of Supply and Demand is a theory that explains the relationship between sellers and buyers. As the price increases, the buyers are willing to supply more and demand less. When the price falls, the situation is vice versa.

  • Lead

In the business world, a lead refers to contact with a potential customer, also known as a “prospect”.

  • m-Commerce

m-Commerce represents online transactions that are made using a device such as a smartphone or a tablet.

  • Machine learning

Machine learning is a part of artificial intelligence and it consists of algorithms that improve automatically through experience and by the use of data.

  • Marketplace

A marketplace is a place where many different sellers can offer their products divided into respective categories.

  • MAP monitoring

MAP monitoring stands for the minimum advertised price. MAP means that a manufacturer has the right to determine the minimum advertised price according to which retailers are allowed to sell their product. In other words, if the retailer makes some advertised price violations, the manufacturer may request to cease the business relationship.

  • Monadic Testing

This is a type of survey research that introduces respondents to individual concepts in isolation.

  • Multilevel Marketing (MLM)

Multilevel marketing is also referred to as network marketing or pyramid selling. It is a controversial marketing strategy for the sale of products or services where the revenue of the MLM company is derived from a non-salaried workforce selling the company’s products or services, while the earnings of the participants are derived from a pyramid-shaped or binary compensation commission system.

  • Net Promoter Score (NPS)

Net Promoter Score (NPS) is a metric that measures the customers’ willingness to recommend a company’s products or services to others.

  • Omnichannel pricing

Omnichannel pricing is a pricing method in which the item’s price is reflected across all channels. 

  • Order Fulfillment

Order fulfillment is a process that starts from the moment that a business receives an order, until the moment that the order is delivered to the customer. 

  • Operating Margin

Operating margin represents how much profit the business makes after paying for variable costs, but before paying interests or taxes. 

  • Penetration pricing

Penetration pricing is a pricing strategy that is mainly used for new products when there is a need to quickly gain market share by offering a lower price. 

  • Perceived value

The perceived value represents the customers’ perception of a certain product. It shows the customers’ desirability for products, especially in comparison to competitor’s products. 

  • Predatory pricing

Predatory pricing means setting the prices extremely low in order to eliminate the competition. This is an illegal act. 

  • Prestige pricing

Prestige pricing is a pricing strategy where the high product prices are used to point out the product’s superiority. That of course, does not need to be true, but customers tend to connect price with the quality.

  • Price comparison

Price comparison is a tactic used by customers when deciding on which product to buy. It’s especially widespread in eCommerce, therefore, many brands and retailers are using price monitoring tools in order to compare their prices with competitors. 

  • Price discrimination

Price discrimination is a pricing strategy that means that the sellers are charging different prices for the same products based on who the customers are (and are they willing to pay).

  • Price elasticity

Price elasticity shows how sensitive the quantity demanded of it is to its price. For example, when the price rises, the quantity demanded will drop, and vice versa.

  • Price index

The price index is usually used in the eCommerce sector. It will show you how the prices from a particular site stand compared to 2 other websites offering the same products.

  • Price fixing

Price fixing is an agreement among competitors to sell products only at a fixed price. It’s perceived as an illegal act.

  • Price monitoring

Price monitoring means that brands and retailers tend to monitor their competitors’ prices (manually or automatically) in order to set the best possible pricing strategy and position themselves higher on the market.

  • Price monitoring tool

The price monitoring tool is an online service that provides comprehensive and suitable solutions for eCommerce professionals including; retailers, brands/manufacturers, and distributors in order to stay profitable in the current competitive market conditions.

  • Price leader

A price leader is a company that has the control to determine the prices of goods and services in a market.

  • Price optimization 

Price optimization is the price that delivers the maximum profit.

  • Price point

Price point refers to a certain point on a scale of possible prices. Out of all those possible price points, some can bring higher profits.

  • Price skimming

Price skimming is a pricing strategy where the seller initially sets a higher price, only to lower it over time. It can be perceived as a form of price discrimination.


  • Price testing methods

Price testing methods refer to a set of methods used for testing which price will bring the best results to the company.

  • Price war

A price war is a set of competitive actions among competitors who are constantly lowering their prices in order to undercut one another and get a bigger market share.

  • Pricing dashboard

A pricing dashboard is a screen where you can easily create your own pricing reports. In other words – at one glance – you can see what’s been happening on the market lately. The dashboard consists of a number of widgets (reports), and each widget can be set up to show you different data.

  • Pricing strategy

Pricing strategy refers to different methods that companies use to price their products or services.

  • Product details

Product details refer to different product information such as shipping costs, time, and detail, stock status, seller name, and rating, etc. 

  • Product matching

Product matching is the process of finding and matching the identical products available on different sources. It’s a common approach in the eCommerce world.


  • Product variations

Product variations mean that a product has different attributes (color, size). However, those variants are all grouped together on the same product page.

  • Profit margin

Profit margin is a measure of profitability. It’s calculated as a difference between revenue and costs divided by the revenue. 


  • Psychological pricing

Psychological pricing (also price ending, charm pricing) is a pricing/marketing strategy based on the theory that certain prices have a psychological impact. The odd pricing strategy tells us to price products just below the whole dollar / hundred amount. For example, 99USD is psychologically “less” in the minds of consumers than 100USD. It’s a minor distinction that can make a big difference.

  • Repricing

Repricing means putting a different price on a product or a service. 

  • Return on Investment (ROI)

Return on Investment (ROI) is used to evaluate the efficiency or profitability of an investment.

  • SaaS

SaaS stands for Software as a Service. This is a method of software delivery that allows people to access the data from any device and any browser. 

  • Search engine optimization (SEO)

SEO is a strategy that helps you create website content that is easier for search engine bots to find, index, and rate.

  • Site crawl

Site crawl is the process of extracting content and data from a website. This process allows companies to obtain all, publicly available information from any website.

  • Shopping cart

A shopping cart represents the customer’s online order. 

  • Sticky prices

Sticky prices (normal rigidity) refer to a situation in which a normal price is resistant to change. 

  • Stock monitoring

Besides price monitoring, companies are usually interested in stock monitoring. It’s important to know when competitors run out of stock when they are replenishing their stocks, etc.

  • Stock Keeping Unit (SKU)

Stock Keeping Unit (SKU) is a scannable bar code that allows vendors to automatically track the inventory.

  • Store integration

Store integration refers to integration that is happening between an eCommerce store and some online platform. 

  • Supply Chain

The supply chain represents the network of all the organizations, individuals, and activities that are included in the process of creating and selling the product.


  • Tiered pricing

Tiered pricing is a pricing method where the sellers adjust their prices in order to suit different target markets. 

  • Traffic

The information of how the visitors interact with a certain website/pages. It shows how many visitors opened the website, and which pages they visited next.

  • Unauthorized sellers

Unauthorized sellers are individuals or businesses who are buying products from retailers in order to resell them at a significantly higher price. 


  • Value-based pricing

Value-based pricing is a pricing strategy that sets the prices based on the customer’s perceived value. Therefore, this is one of the hardest pricing strategies.

  • Variable cost

Variable costs are costs that are changing as the quantity of products/services that a business produces changes.

  • Viral content

Viral content is online content that has managed to achieve a high level of awareness due to its exposure on social media.  

  • Web scraping

Web scraping is the process in which the bots are used to extract content and data from a website.

  • Willingness to pay

Willingness to pay is a term used to describe how willing the customers are to pay for a certain product or a service. 


eCommerce terminology is changing every day, therefore this list is not final. However, we hope that you find it useful. In case you have any additional questions, don’t hesitate to reach out to