Fashion Merchandising – Glossary of Retail Terms

Table of Content
  1. Ad slicks: Camera-ready ad, usually on glossy paper. Many vendors supply these for newspaper ads. Advertising: Paid message communicated through various forms of media and designed to influence the purchase behavior and thought patterns of the audience.
  2. Allocation: Suppliers determination of how much of (usually) scarce merchandise to assign to their customers.
  3. Allowance: Any price reduction given by suppliers to retailers for various reasons (late delivery, damaged merchandise, below standard quality, overstock, etc. ).
  4. Anchor tenants: Major stores that serve as the primary draw of customers to a shopping center. As is: Merchandise sold in its current, often slightly flawed, condition.
  5. Assets: Those items of value the company owns such as cash in the checking account, accounts receivable, inventory, equipment, and property.Assignment: The transfer of title, right, or interest in certain real property. For example, if you sell your business and turn over your lease agreement to the new owner, that is an assignment.
  6. Authorized shares: The total number of shares the corporation is permitted to issue.
  7. Automatic ordering: A feature in certain software systems of stores to automatically create suggested orders based on preset criteria for minimum and maximum stocking levels.
  8. Average margin: The difference between what you pay for all the goods you sell during a specific period, and what you buy them for, calculated as a percentage of the selling price of the goods.
  9. Average markup: The difference between what you pay for all the goods you sell during a specific period, and what you buy them for, calculated as a percentage of the cost of the goods.
  10. Back haul: Trucks that have delivered merchandise to a buyer and are now empty are available to back haul material to their home base.
  11. Back order: When an order cannot be filled because the products are not in stock, the order is left open until the goods arrive.
  12. Bad debt ratio: The amount of money you believe the customers will never pay, also called uncollectible funds, divided by the total sales, expressed as a percent.
  13. Balanced tenancy: The mix of stores in a planned shopping center chosen to meet the full range of consumers’ shopping needs.
  14. Balance sheet: Financial statement that shows the company’s assets, liabilities, and owner’s equity. The value of the assets must equal the value of the liabilities plus equity.
  15. Base rent: Minimum monthly rent payments excluding pass-through, percentage rents, and all other charges.
  16. Basics: Merchandise that customers need all the time. Beginning of the month (BOM) inventory: The inventory in the store at the beginning of the month.
  17. Big box store: A large store focused on a broad selection and low prices of a specific category of goods. Big box stores typically have few frills.
  18. Billed cost: Manufacturer’s price for goods.
  19. Board of directors: Group of business leaders, typically including a company’s CEO and other senior executives, who serve as advisors or supervisors of the company. In a private company, the board has little operating control. However, in a public company, the board represents the shareholders and may be called upon to make major strategic decisions including hiring or firing the CEO, making acquisitions or divestitures, etc.In return they receive either cash or shares of stock.
  20. Book value: Net value of a company as shown on the balance sheets. In successful companies book value is often much less than actual value.
  21. Bottom feeders: Customers who buy clearance merchandise, distressed companies in trouble, etc. , at rock bottom prices. Boutique: Upscale shop designed to present usually expensive merchandise tailored to a specific customer mix.
  22. Breadth: The extent of the selection of merchandise in a department such as, for instance, the number of different styles, colors, sizes, etc
  23. .Breakpack: Process of pulling inner packs from a master carton in order to ship smaller quantities to stores.
  24. Brick and mortar: Traditional retailing in a physical business location as opposed to virtual retailing conducted online.
  25. Business plan: Detailed road map of where a business is going and how it is going to get there.
  26. Buying groups: Organizations that coordinate or pool the buying needs of many small retailers into a larger order with manufacturers or suppliers in order to negotiate better pricing, delivery, and payment terms.
  27. Call tag: A freight carrier’s written authorization for customers to return merchandise to the retailer at no cost.
  28. Cash discount: Deductions taken from the cost of goods for performance of prearranged terms of payments. For example, 2/10 means payments within ten days can deduct 2% off the invoice.
  29. Cash flow analysis: Financial statement showing how much money the company had at the beginning of the month, how much money came in through sales and payments, and how much went out as payments to create what was left over at the end of the month.The cash flow statement may differ greatly from the profit and loss (P & L) statement. For example, a major capital purchase may deplete cash but not impact profit because it has merely converted one form of asset (cash) into another form (the capital good).
  30. Cash on delivery (COD): Goods that are delivered to the store only upon immediate payment for them to the deliverer.
  31. Cash wrap: Shelving and stands surrounding the cash registers.
  32. C corporation: Standard corporation structure that establishes the company as an independent legal entity.
  33. Charge back: Deductions on an invoice taken by the retailer for shortages, amages, freight allowances, etc. Clearance: Selling inventory at reduced prices at the end of a season or life cycle to move excess stock.
  34. Clipping service: Companies that are paid to read a broad selection of newspapers and magazines and cut out articles that reference specific subjects.
  35. Closely held corporation: Company controlled by one or a small number of owners.
  36. Closeouts: Merchandise that is no longer being manufactured that is sold at reduced prices to clear out remaining inventory.
  37. Comp store: Comparison of this year’s business to last year’s in stores that have been open at least one year.
  38. Consideration: For a contract to be valid, the requirement of one party to pay or do something must be countered by the other contracting party giving or doing something (the consideration).
  39. Consignment merchandise: Merchandise that is placed in a store but remains the property of the supplier and is paid for by the retailer only when it is sold. Consignment merchandise usually may be returned to the supplier whenever the retailer wishes.
  40. Cooperative Advertising: Retail advertising for which the supplier pays the retailer’s cost.
  41. Cost per thousand (CPM): Term used in media buying that refers to the cost of reaching a thousand people in your target market. (The Roman numeral for one thousand is M. )
  42. Cross merchandising: Using different lines of goods to help sell each other, for example by displaying them together.
  43. Current assets: Company assets that are liquid or can be converted to cash in less than one year.
  44. Customer base: The customers who shop in your store. Debt financing: Financially, supporting a business with borrowed money that costs interest and, per its terms, has to be repaid.In contrast, equity financing supports a business with invested money that remains in the business, carries no interest expenses, but reduces the percentage of the owner’s share of the business.
  45. Deep and narrow: Large quantities of a small selection of merchandise.
  46. Defectives: Merchandise that is incomplete or faulty.
  47. Demographics: Set of objective characteristics that describe a group of people. Includes characteristics such as age, home ownership, number of children, marital status, residence, location, job function, and many other criteria.
  48. Depreciation: The amount an asset is assumed to fall in value each year. This amount may be an actual reduction in the asset’s value (such as when a car is expected to wear out in a certain number of years) or set by accounting standards for purposes of collecting profit or taxable profit, even though its value may increase (such as a house).
  49. Depth: The number of pieces of merchandise of a specific item or category in stock. Distribution: The system by which goods move to retailers from manufacturers via importers, wholesalers, etc. Dividends: Money from corporate profits paid to shareholders in proportion to their investment.
  50. Doing business as (DBA): The name the business uses for its operations, as distinct from the name under which it is registered.

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