Wholesale Glossary As you begin to work with boutiques, you may hear some unfamiliar terms. Below are definitions of words

and phrases associated with doing wholesale deals.

Assortment This is another way of referring to a seller’s line and reflects the variety of products a seller offers to

retailers. You might also hear this term in the context of a retailer’s assortment – as in, all the types of

products that they offer. The term “assortment” gets to the heart of merchandising and the importance of

giving buyers a good selection of product types, price points, sizes, colors and more.

Buybacks The practice of retailers negotiating for a seller to accept back any unsold inventory and provide a refund. Case packs

Bundled quantities of the same product offered to retailers to simplify the ordering process.

Cash on Delivery (COD) In the wholesale context, a COD arrangement involves a retailer paying for your goods upon delivery rather

than in advance. This is also referred to as Collect on Delivery.

Catalog

A digital or printed visual representation of your wholesale line and policies. This term is used

interchangeably with “linesheet,” although a catalog tends to be a bit more creatively laid out with some

larger, more stylized photos.

Cost of Goods Sold (COGS)

The dollar amount that a seller calculates by looking at the cost of raw materials used to make a product.

Collection

Many sellers launch a new grouping of items as a collection, either seasonally or annually. A collection may

also be a grouping of items that fit together thematically or could be sold as a set.

Consignment An arrangement between a retailer and seller that can be used as an alternative to a wholesale deal. Under a

consignment agreement, the retailer typically charges a fee to house and sell your work that is around 30 to

40 percent of the item’s retail price. This is a higher profit margin than you receive through wholesale deals.

Another main difference is that the seller only gets her cut after the retailer has sold the goods, and any

unsold goods are returned to the seller.

Delivery window Some retailers may want you to guarantee that you can produce and ship your goods for arrival within a

certain timeframe. For instance, they may want to ensure that the goods will be on their shelves in time for a

certain holiday or when their other inventory is predicted to sell out.

Distribution center

Major retailers with multiple locations often have a distribution center. Rather than shipping directly to

each retail store, the seller will ship to one of these facilities. The distribution center then passes specific

quantities to each designated retail store.

Drop-shipping

This process involves the designer shipping goods directly to a retailer’s customers.

Exclusivity Some retailers may ask for a seller to refrain from working with any other retailers within a geographic area,

or to refrain from offering a particular item or set of items to other retailers.

Invoice

The document a seller sends to a retailer at the time a retailer has agreed to pay for goods. It includes

information about the amount of goods sold and what they are, the cost of the products, additional charges

to the retailer (including shipping fees) and contact information for both parties. An invoice typically

includes a date and unique identifying number or code for recordkeeping. This is the finalized version of a

purchase order (see full definition below).

Keystone

A pricing method that involves doubling a wholesale price to get a suggested retail price.

Lead time A seller’s estimated production time, or how much time a seller will require before being able to deliver

goods to a retailer.

Line All of the products a seller is offering. In the United Kingdom, Australia and Canada, product lines are

referred to as ranges.

Linesheet A document that displays all of the products in a seller’s line. By referencing the linesheet, a retailer can put

together a purchase order by listing the quantity of each item they want to carry.

Manufacturer’s Suggested Retail Price (MSRP) The price that you recommend your retailer to charge for your items. Sellers in the United Kingdom,

Australia and Canada may hear people term Recommended Retail Price, or RRP, used interchangeably.

Margin

The difference between your wholesale price and the actual cost of producing an item. A margin might also

refer to the difference between the price a retailer pays for an item and what she sells it for in her store.

Markup

The dollar amount or percentage change between a wholesale and retail price.

Minimums The amount of money or quantity of items required for retailers to warrant a wholesale order with you. It’s

up to you, the seller, to determine what size an order must be to get a wholesale price break. Create your

minimum by carefully calculating your pricing and profit.

Net Payment Terms

A type of payment plan that involves a retailer paying for items after she has had time to sell your items in

her store. For instance, a retailer may request to pay you 30, 60 or 90 days after the invoice date. This is

referred to as net 30, net 60 or net 90 etc. Net 30 payment plans are most common.

Open-to-Buy

The budget a retailer has to place orders. Most retailers are trying to hit a sweet spot, where they don’t order

so much inventory that they’ll need to offer discounts, but their shelves are fully stocked.

Point of Sale (POS)

This is the point at which a retailer receives payment from the shopper. It’s often synchronized with

software or some system for tracking inventory, returns, etc.

Private Label Also knows as “white label.” Most Etsy Wholesale sellers are developing their own proprietary designer

labels. Private label refers to the practice of another company hiring a designer to develop a product under

its brand name. The seller’s branding is not included in the final product or packaging.

Purchase Order (PO)

A document submitted to the seller detailing which products a retailer wants to buy, along with quantities.

Once the order is finalized, the seller uses the PO to generate an invoice.

Range

The term used in the United Kingdom, Australia and Canada to refer to the line of products you offer.

Recommended Retail Price (RRP)

The price that you recommend your retailers charge for your items. Sellers in the United Kingdom, Australia

and Canada may hear people use the term Manufacturer’s Suggested Retail Price, or MSRP,

interchangeably.

Resale Tax ID Number In the US, designers don’t charge sales tax for wholesale transactions, provided that retailers have a resale

tax ID number. This ensures the government that sales tax will be charged to the end consumer when the

retailer resells the goods. For sellers, asking retailers for their resale tax ID number is common practice and

a way to verify that you’re working with a legitimate business.

Sales Representation (Sales Rep) An independent business person or company with whom a seller has a contractual agreement. The contract

typically spans a period of time during which the sales rep is responsible for pitching a seller’s line to

potential new retail accounts. In exchange, the seller pays the sales rep an agreed upon percentage of the

sales, usually between 12 percent and 30 percent.

Samples Some retailers require that you mail physical samples of your pieces to them before they will place an order.

Be upfront if you want the retailer to return the samples to you and stipulate who will pay for shipping.

SS## and FW##

Abbreviation for spring/summer of upcoming year and fall/winter of upcoming year. These refer to the

seasons when you’re producing and selling on the traditional industry calendar, which is six months ahead

of when the products are to be available in stores.

Stocklist This is a list of which retailers, or stockists, carry a designer’s items. It’s common practice for a designer to

directly share this list with prospective retail stores or publish them on their website.

Stock-keeping unit (SKU)

A unique code or series of numbers assigned to each style of product in your line. SKUs are most often used

when a seller has a large amount of inventory to manage. They are especially useful when writing POs and

need to track the products a retailer is ordering.

Ticketing

Commonly called hang-tags, these are labels with relevant product information affixed to merchandise.

Universal Product Code (UPC) Labeling

A system used to track inventory and sales by assigning a unique barcode with a string of digits to each

product.

Vendor A party (typically a seller, designer or manufacturer) that supplies goods to a retailer.

Vendor compliance

Rules that detail the ways retailers require the seller to do business with them. Typically, vendor compliance

covers liability insurance, shipping and packaging to distribution centers, product testing, ticketing,

labeling, payment setup and invoicing, and more. This is usually only commonplace for major retailers.

White label See “private label” definition above.

Wholesale

A business-to-business relationship between a party providing goods (this may be the vendor, seller,

designer, manufacturer or supplier) and the retailer who is buying them to then resell to consumers.

Wholesale Showroom

A place where designers’ lines are shown by sales reps to potential retail accounts and other industry

professionals. Fees for displaying your items in such showrooms can be high and typically include monthly

rent and expenses to cover tradeshows and events, in addition to a percentage of total sales.

This lesson is part of our Wholesale Guide for Etsy Sellers, which is designed to help you decide if wholesale makes sense for your business and build out your wholesale channel. If you’re just getting started or need a refresher, this guide is for you. It includes a wholesale glossary and covers topics such as linesheets, policies, pricing, branding, packaging and wholesale etiquette. Visit this blog post to download all six lessons.