Your Wholesale Market Glossary

Deciphering industry language


Every industry has key terms integral to understanding the business. Retail and wholesale are no different. When attending a Market or just dealing with vendors in general, it’s vital to speak the language to efficiently and effectively work with exhibitors. Let’s go beyond the buzz words and get down to the basics. Here’s a list of key terms to know when negotiating the world of wholesale purchasing. 


Advertising Allowance: Additional funds offered to enable a retailer to advertise a vendor’s product. This isn’t always available.

At Once: Term used to have merchandise shipped immediately

A.S.A.P.: Term used to have merchandise shipped as soon as possible

Average Sale: Total sales divided by number of transactions made

Billing Address: Address where the merchandise invoice is to be sent

Bill of Lading:  Document for shipments as evidence of carrier’s receipt of the shipment and as a contract between carrier and shipper

Back Order: Merchandise that’s not shipped with initial order but will ship at a later date

Cancellation Date: The date beyond which the order will not be accepted. Make sure to include this date on every order.

C.O.D.: Cash on Delivery means merchandise must be paid for when it arrives in store.

Close-out: Merchandise offered at a reduced price to clear out existing vendor inventory

Consignment: Merchandise shipped to a retailer with the understanding that the ownership remains with the vendor until merchandise is sold.

DatingA retailer can pay for merchandise at a later than normal due date (30 days, 60 days, etc.). Always inquire if dating is available. 

F.O.B.: Freight on Board indicates the location where the merchandise was shipped. For example, FOB factory means the retailer will pay for freight from factory whereas FOB Atlanta means vendor will pay freight from Atlanta.

Freight Allowance: Allowance given to retailer to cover all or part of freight cost. Vendors sometimes offer market-only show specials which may include freight allowances, so be sure to ask.

Guaranteed Sale: An agreement that a buyer can return unsold goods after they have been exposed for sale for a given time. It’s important to get this in writing.

HFC“Hold for Confirmation” means that an order is placed but must have the retailer’s confirmation before it is shipped.

Keystone: Getting a 50 percent mark-up on merchandise purchased and priced at retail. It also means doubling the cost of the merchandise to obtain a retail price

Mark-Up: The amount added to cost to determine the retail of the item. For example, an item that has a cost of $5 and is marked up to $10 equals a 50 percent mark-up. Mark-up is always calculated off retail.

Markdown: To lower the retail price of an item for any reason

O.H.:  Stock “on hand”

O.O.:  Merchandise “on order”

Open-to-buy: A term used to inform buyer of the amount of dollars and/or units that are available for a given period

Purchase Journal: Records of all the purchases along with the retail value for a specific month

P.O.: “Purchase order” is a document that instructs the vendor to ship merchandise

R.T.V.: Used to describe merchandise that is being “Returned to Vendor”

Sales per square feet: Total sales divided by store size

Ship Date:  The date that merchandise is to be shipped

Ship To:  The address where the merchandise will be shipped

S.K.U.:  Abbreviation for “stock keeping unit”

Terms:  The combination of the length of time to pay an invoice and any arranged discounts  

Turnover: Term used to describe the number of times merchandise is bought and sold during the year. It’s calculated by dividing the average inventory into the annual sales.


While these terms are important, it’s equally imperative to actively listen during negotiations, keep meticulous records, and continue to learn. As your business evolves, there’s always something new to learn and understand. 


Tag:Blog PostAtlanta Market

Let’s Stay In Touch