At Immediate Apparel, we know that running a boutique takes more than just great products—it requires a deep understanding of the retail landscape. From inventory planning to managing cash flow with flexible terms, our goal is to provide the resources, expertise, and support needed for your success. Whether you’re taking advantage of our no-minimum order policy or exploring our dropshipping options, Immediate Apparel is here to help you thrive in the competitive retail market. Partner with us for wholesale solutions tailored to your boutique’s growth.
In the world of retail, understanding key terms and acronyms can make a big difference for boutique owners looking to manage their businesses successfully. This guide will cover the must-know terms in retail, helping you make informed decisions, negotiate favorable terms, and stay competitive in today’s fast-paced market.
Retail and Inventory Terms
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SKU (Stock Keeping Unit): A unique code used to identify each product and variation in inventory. SKUs are essential for tracking inventory and managing stock levels.
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MOQ (Minimum Order Quantity): The smallest quantity of a product a supplier will sell in a single order. MOQs are important for boutiques that want to control inventory levels without over-ordering.
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COGS (Cost of Goods Sold): The direct costs associated with producing or purchasing the products you sell. Understanding COGS is essential for pricing and profit margin calculations.
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FIFO (First In, First Out): An inventory method where the oldest stock (first in) is sold first (first out). FIFO is useful for products with a limited shelf life.
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Dropshipping: A fulfillment model where the retailer doesn’t keep products in stock but forwards customer orders to a third-party supplier who ships them directly to the customer. Dropshipping is beneficial for boutiques looking to expand their product range without increasing inventory costs.
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Inventory Turnover: The number of times inventory is sold and replaced over a period. A higher turnover rate often indicates healthy sales and good inventory management.
Sales and Pricing Terms
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MSRP (Manufacturer's Suggested Retail Price): The price the manufacturer recommends for selling the product. Some suppliers require boutiques to follow the MSRP, while others allow pricing flexibility.
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MAP (Minimum Advertised Price): The minimum price a retailer is allowed to advertise a product. MAP policies protect brand value and discourage undercutting between retailers.
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BOGO (Buy One, Get One): A promotional pricing strategy where customers can buy one item and receive another at a discount or for free. BOGO deals are effective for boosting sales and moving inventory quickly.
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Upsell and Cross-Sell: Upselling encourages customers to purchase a higher-end product, while cross-selling promotes additional items related to the one being purchased. These strategies increase average order value.
Credit Terms
Having a clear understanding of credit terms can be critical for maintaining good cash flow and strong relationships with suppliers.
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Net 30: Payment is due within 30 days from the date of the invoice. Commonly offered by suppliers to give buyers time to generate revenue from sales before payment is required.
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Net 30 ROG (Receipt of Goods): Payment is due 30 days after receiving the goods. This allows extra time, especially useful for boutiques selling seasonal items.
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Net 10 EOM (End of Month): Payment is due within 10 days after the end of the month in which the invoice was issued. This term creates a predictable payment schedule and can support cash flow planning.
E-commerce and Marketing Terms
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SEO (Search Engine Optimization): Techniques used to improve a website’s visibility on search engines. SEO is vital for e-commerce boutiques looking to attract customers online.
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Conversion Rate: The percentage of website visitors who make a purchase. A high conversion rate indicates effective marketing and a user-friendly website.
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CTR (Click-Through Rate): The percentage of people who click on an ad or link compared to the total who viewed it. CTR is used to measure the effectiveness of digital advertising.
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AOV (Average Order Value): The average dollar amount spent each time a customer places an order. Strategies like upselling and bundling can help increase AOV.
Shipping and Fulfillment Terms
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FOB (Free on Board): Indicates whether the seller or buyer is responsible for shipping and risks associated with it. For example, FOB Origin means the buyer pays shipping and assumes responsibility once the goods leave the seller’s facility.
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Lead Time: The time it takes from placing an order to receiving the goods. Knowing supplier lead times helps boutiques plan for timely stock replenishment.
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RTS (Return to Supplier): The process of returning unsold or defective merchandise to the supplier. Some suppliers offer favorable RTS policies to help boutiques manage excess or faulty inventory.
Why Understanding Retail Terms Matters for Boutique Owners
Mastering these retail terms and acronyms provides boutique owners with the tools to operate efficiently, negotiate wisely, and improve profitability. From managing inventory and pricing to creating impactful promotions, these terms empower you to make data-driven decisions and develop lasting relationships with suppliers.
At Immediate Apparel, we know that running a boutique takes more than just great products—it requires a deep understanding of the retail landscape. From inventory planning to managing cash flow with flexible terms, our goal is to provide the resources, expertise, and support needed for your success. Whether you’re taking advantage of our no-minimum order policy or exploring our dropshipping options, Immediate Apparel is here to help you thrive in the competitive retail market. Partner with us for wholesale solutions tailored to your boutique’s growth.