E-commerce terminology

This page lists and defines terms used when discussing e-commerce, or online commerce.

B2B (business to business)

B2B, or business to business, is business transactions involving products or services between two companies, such as between a web host and a colocation provider or datacenter.

B2C (business to consumer)

B2C, or business to consumer, is business transactions involving products or services between a company and a consumer, such as between a web host and a web hosting client.

Billing system

A billing system, or billing software, calculates how much clients owe for services or products and automatically sends them invoices. Some billing software programs are designed specifically for the web hosting industry.

Break-even analysis

Break-even analysis is the steps taken to calculate at what point the revenue for a service or product equals the total expenses for that service or product. Revenue beyond the break-even point is profit earned.

Bricks and mortar

Bricks and mortar refers to businesses that operate out of buildings, where consumers can do business in person. In contrast, online businesses have websites as their point of operations. Bricks and mortar businesses may also have websites, but their building is the focus of their business.

Business plan

A business plan is a summary of business objectives and details of how those objectives will be reached. It's generally considered a starting point for any new business, and it can be updated at any time. It typically includes a business overview, a market analysis, operations and marketing plans, financial objectives, and projections, among other details.

Call to action

On web pages, a call to action is an invitation or instruction to site visitors to do an action that the website owner wants them to do. "Click here" is an example of a call to action. Examples of more effective calls to actions are links with "Order now," "read more," "contact us," or "sign up now" text.

Chargeback

A chargeback occurs when a consumer disputes a payment made via credit card, and the credit card company debits the vendor's account for the amount paid. A chargeback fee is often charged to the vendor.

E-commerce hosting

E-commerce hosting, also called business hosting, is web hosting services tailored to the needs of e-commerce websites. In addition to typical web hosting package features, they offer features (included or extra) such as shopping carts or support for specific commercial shopping carts, SSL certificates, e-commerce site templates, and marketing and other online business tools.

E-tailing

E-tailing, also written as etailing, is short for electronic retailing. The term refers to online selling at the retail level.

Market segmentation

Market segmentation is grouping clients and potential clients based on their shared characteristics. Accurate market segmentation enables product and service providers to better understand what their clients want and therefore be better able to meet their needs.

Merchant account

An Internet merchant account is an account set up for online merchants.

Payment gateway

A payment gateway is a service that transfers credit card funds securely from online consumers to a payment processor via the website shopping cart and a secure SSL connection.

Payment processor

Payment processors automatically deposit money received via e-commerce sites to merchant accounts, where it's held until it's transferred to the account holder's business bank account.

Privacy policy

A privacy policy tells users the company's policy about how it does and doesn't use information collected at the website. It often also explains how data collected is protected and secure.

Product bundling

Product bundling is the practice of selling several products and/or services together. For example, some web hosts offer web design, SEO services, and/or domain names bundled with their web hosting packages.

Real-time processing

Real-time processing means that online transactions are processed automatically, in real time, without any human assistance.

Refund policy

A refund policy spells out in what circumstances and time period the vendor will provide refunds.

Shopping cart

An online shopping cart is a software program that allows users to select products or services to purchase. When users are ready to make their purchase, the shopping cart totals their purchases, calculates tax and shipping if applicable, and helps users pay for their purchases. Shopping carts work with payment gateways and SSL certificates to complete transactions.

Shopping cart abandonment

Shopping cart abandonment occurs when users place items in shopping carts but don't proceed to checkout to purchase them.

SSL certificate

An SSL (secure socket layer) certificate is a digital certificate used in e-commerce transactions to help make them secure. It identifies the merchant using it and encrypts credit card information sent to a secure server. A padlock symbol in the lower right corner of the browser window indicates that an SSL certificate is being used for the transaction.

E-commerce terminology

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