Retail glossary: 95 terms explained

A performance arrangement where a publisher, creator or website earns a commission for sales or leads sent through tracked links or codes. The brand pays only on results, so the cost is variable rather than fixed. Retailers use affiliate programmes to widen reach without upfront ad spend, but must track attribution carefully to avoid paying commission on sales that would have happened anyway.

Related: Influencer marketing, Attribution, Commission

The mix of products and variants a store or category chooses to stock, based on local demand, space and margin. It is decided by reviewing sales, customer profiles and supplier offers, then trimming slow movers and adding relevant new items. A well-planned assortment keeps shelves productive and avoids both empty gaps and dead stock, which ties up cash.

Related: Category management, Stock keeping unit, Planogram

The process of deciding which marketing touchpoint gets credit for a sale or sign-up, for example the last ad clicked, the first one seen, or a share across several. It is calculated using tracking links, codes, pixels or customer surveys. Good attribution matters because it guides where marketing money goes; poor attribution overpays some channels and starves others, distorting the true cost of acquiring a customer.

Related: Affiliate marketing, Customer acquisition cost (CAC), Marketing mix

The average amount a customer spends per order, calculated by dividing total sales value by the number of orders in a period. It is watched closely because delivery and packing costs are largely fixed per order, so a higher value spreads those costs better. Retailers lift it through bundles, free-delivery thresholds and cross-sell suggestions at checkout.

Related: Basket size, Conversion rate, Quick commerce

A printed pattern of lines or squares that encodes an item's number so a scanner can read it instantly. In India, most packaged goods carry a GTIN printed by the manufacturer, while loose or local goods need store-generated labels. Correct barcodes speed up billing, reduce keying errors and keep stock records reliable, but they only work if the same code is used consistently across purchase and sale.

Related: Point of sale (POS), Stock keeping unit, Goods receipt note (GRN)

The number or value of items a customer buys in one order. It is calculated by dividing total order value by the number of orders, or by counting items per order. Retailers track it because delivery cost is largely fixed per trip, so a larger basket improves the economics of each delivery and guides decisions on minimum order values, bundles and add-on offers.

Related: Average order value, Delivery fee, Assortment

Recording stock by production or expiry batch so each unit can be traced to its source and shelf life. It matters most for food, medicines, and cosmetics, where near-expiry stock must be sold first or pulled. Batch tracking supports first-expiry-first-out picking, recall handling, and reduces write-offs from expired goods.

Related: FIFO, Expiry management, Dead stock

A person, often a celebrity, sportsperson or well-known creator, engaged to represent a brand over a period through advertising, events and social content. The arrangement is usually a paid contract with usage rights and conduct clauses. Retailers watch ambassador-led campaigns because they drive seasonal demand peaks and because reputational problems can quickly affect sell-through of the featured products.

Related: Influencer marketing, Brand recall, Share of voice

The ability of a shopper to name a brand from memory when a category is mentioned, without being shown options. It is usually tested through surveys and is distinct from recognition, where the shopper identifies the brand from a list or logo. High recall helps a brand get picked in low-involvement purchases and reduces dependence on trade discounts and in-store visibility.

Related: Brand recognition, Share of voice, Point of purchase

The break-even point is the sales level at which total revenue equals total costs, so there is neither profit nor loss. In words, it is fixed costs divided by the contribution margin per unit or as a share of sales. Retailers use it to judge how much a new store, category or campaign must sell before it starts earning.

Related: Contribution margin, Fixed cost, Gross margin

When a shopper adds items to an online cart but leaves without completing payment. Causes include unexpected delivery charges, forced sign-ups, limited payment options and slow pages. Retailers measure it as abandoned carts against carts created, then test reminders, clearer pricing and simpler checkout to recover lost sales.

Related: Conversion rate, Payment gateway, Average order value

Cash flow is the actual movement of money into and out of the business over a period, separate from booked profit. Sales on credit or marketplace payouts that arrive later do not count until cash is received. Retailers watch cash flow because rent, salaries and supplier payments fall due on fixed dates, and a profitable store can still fail if cash runs short.

Related: Working capital, Credit period, Payment reconciliation

A payment option where the customer pays the courier in cash or by card at the doorstep instead of paying online in advance. The ecommerce operator collects the money through the logistics partner and receives settlement after deducting charges. It widens access for shoppers who avoid prepayment, but raises return-to-origin risk and delays the retailer's cash inflow.

Related: Return to origin, Last-mile delivery, Payment reconciliation

The process of matching cash collected by riders or couriers against the orders marked delivered in the system. Each rider's collected amount is counted, compared with expected collections, and differences are investigated and settled. It matters because cash handling is a common source of leakage and disputes; timely reconciliation protects margins and keeps rider payouts and order records accurate.

Related: Payment reconciliation, Return to origin, Shrinkage

The practice of running a group of related products as a business unit, with clear sales, margin and stock goals. The category manager studies customer needs, decides assortment, pricing, promotions and shelf layout, and reviews performance regularly. It matters because treating categories as planned units helps retailers grow sales without simply adding more products or cutting prices.

Related: Assortment, Planogram, Private label

The fee an online marketplace charges a seller, usually a percentage of the selling price of each unit, sometimes with a fixed component per order. It is deducted from settlement along with other service fees. Sellers factor commission into pricing and margin planning, since a product that works in a physical store may not stay profitable once platform fees are added.

Related: Marketplace seller, Payment reconciliation, Average order value

Rules that place duties on ecommerce entities selling goods or services online. They require clear disclosure of seller details, return and refund policies, grievance redressal and no unfair trade practices. For online and quick-commerce operators, this means displaying accurate information, honouring stated policies and responding to complaints within set timelines, which protects customers and reduces disputes and regulatory action.

Related: Marketplace seller, Return to origin, Trade licence

Workers engaged through an agency rather than on the retailer's own payroll, often for housekeeping, loading, security or warehouse tasks. The principal employer must ensure the contractor is licensed, wages are paid and statutory records are kept. For retailers, contract labour lowers staffing flexibility but carries compliance risk if the agency defaults, so documentation and periodic checks matter.

Related: Shops and Establishment registration, Payroll compliance, Stock audit

What remains from an order after variable costs such as product cost, packaging, delivery and payment charges are deducted, before fixed costs like rent and salaries. It is calculated per order or per unit and shows whether each sale adds money to the business. Retailers use it to set prices, decide discount depth and judge which categories or channels deserve more shelf and marketing spend.

Related: Gross margin, Discount depth, Customer acquisition cost (CAC)

The share of visitors or app users who complete a purchase, calculated as orders divided by sessions or visits over a period. It shows how well traffic is being turned into sales and separates a traffic problem from a store-page problem. Retailers improve it by fixing search results, product information, pricing and checkout friction.

Related: Average order value, Product listing, Cart abandonment

A document a seller issues to reduce the value of an earlier invoice, typically after a return, short supply, damage or a rate correction. It adjusts the tax already charged and supports the buyer's credit claim. For retailers, timely credit notes keep accounts with suppliers and customers accurate, prevent overpayment, and ensure tax filings reflect actual sales rather than original billed amounts.

Related: Tax invoice, Return to origin, Payment reconciliation

Credit period is the time a supplier allows before payment is due, or the time a retailer extends to business buyers. It is agreed in days from invoice date. Longer supplier credit eases working capital, while long credit given to customers strains it. Retailers compare credit terms across suppliers and plan purchases and payouts around these due dates.

Related: Working capital, Cash flow, Payment reconciliation

The total marketing and sales spend needed to win one new customer, calculated by dividing campaign spend over a period by the number of new customers gained in that period. It matters because a brand must recover this cost through repeat purchases; if CAC stays high and repeat buying is weak, growth becomes expensive. Retailers compare CAC with contribution margin per order to judge whether a campaign is worth running.

Related: Contribution margin, Repeat purchase rate, Direct-to-consumer (D2C)

The expected profit a customer brings over the whole relationship with a brand or store, estimated from average order value, purchase frequency, margin and how long the customer stays active. It matters because it sets a sensible ceiling on acquisition spend and justifies loyalty benefits. Retailers use it to identify high-value segments and to decide where retention effort pays back.

Related: Customer acquisition cost (CAC), Repeat purchase rate, Loyalty programme

A system that stores customer contact details, purchase history and interactions so a retailer can segment and communicate with them. It powers messages on WhatsApp or SMS, offers for lapsed buyers and support follow-ups. Its value depends on consent and data quality; duplicate or incomplete records make campaigns wasteful and can create privacy problems.

Related: Loyalty programme, Customer lifetime value (CLV), Influencer marketing

The latest time by which an order must be placed to qualify for a given delivery slot or dispatch cycle. Operators set cut-offs per hub or per slot so that picking, packing and rider trips finish within the promised window. It matters to retailers because cut-offs shape daily demand peaks, staffing rosters and how fresh or perishable stock is allocated to same-day versus next-day orders.

Related: Delivery promise, Pick and pack, Dark store

A method of counting a small portion of stock regularly, rotating through sections or categories, instead of shutting down for a full physical count. It is planned so high-value or fast-moving items are checked more often. Regular cycle counts catch record errors early, support stock accuracy for online and store sales, and reduce the disruption of annual audits.

Related: Stock audit, Shrinkage, Inventory accuracy

A small warehouse-like outlet used only to pick and pack online grocery orders, closed to walk-in customers. It is stocked around fast-moving local demand and staffed for picking, packing and rider handover rather than browsing. Quick-commerce operators rely on dark stores to keep delivery times short, so site selection, stock accuracy and pick speed matter more than store decor.

Related: Quick commerce, Pick and pack, Last-mile delivery

Dead stock is inventory that has not sold for a long period and is unlikely to sell at full price. Retailers identify it by age, sell-through and last-sale date, then clear it through markdowns, bundling, liquidation or returns to supplier. Holding dead stock ties up working capital, occupies shelf space and risks expiry or obsolescence, so it is reviewed regularly.

Related: Markdown, Sell-through rate, Inventory turnover

A charge added to an order for bringing it to the customer, separate from the price of goods. It may be flat, based on distance or order value, or waived above a threshold. Retailers use it to recover part of the last-mile cost and to nudge basket size, so the fee structure affects both the economics of small orders and customer willingness to complete checkout.

Related: Average order value, Last-mile delivery, Cart abandonment

The time window or service level shown to a customer at checkout, such as delivery within a stated slot. It is set by the operator from hub capacity, rider availability and cut-off times, and orders are accepted only if they can be met. It matters because a promise that is repeatedly missed raises complaints and refunds, while an overly cautious promise loses sales to faster competitors.

Related: Serviceable pin code, Hyperlocal delivery, Conversion rate

A defined time window in which a customer chooses to receive an order. The operator creates slots from available rider and hub capacity, and bookings are capped so each slot stays feasible. Slots matter because they let a retailer spread demand across the day, plan staffing, and manage perishable and chilled items, while giving customers a clear expectation of when the order will arrive.

Related: Cut-off time, Delivery promise, Hyperlocal delivery

A model where a brand sells mainly through its own website, app or exclusive stores rather than through wholesalers or multi-brand retailers. The brand controls pricing, packaging, data and customer service, and bears the cost of acquiring each buyer. Retailers study D2C because it shows how product, content and logistics work together, and because many D2C brands later enter general trade or modern trade.

Related: Owned channel, Customer acquisition cost, Marketplace seller

A system where business-to-business invoices are reported to the GST portal, which validates them and issues a unique reference number. The supplier generates the invoice in the prescribed format, uploads it, and shares the signed invoice with the buyer. Retailers buying from suppliers should check that invoices are properly reported, because input tax credit depends on it and mismatches create reconciliation work later.

Related: GST, Payment reconciliation, Goods receipt note (GRN)

An electronic document required when goods above a notified value move between places. The consignor or consignee generates it on the GST portal with details of the goods, vehicle and route, and the transporter carries it. For retailers receiving stock, a valid e-way bill avoids detention at checkposts and delays at the store gate, and it helps match what was dispatched against what arrived.

Related: GST, Inbound logistics, Goods receipt note (GRN)

A way for two businesses to exchange standard documents such as purchase orders, invoices and stock reports directly between their systems, without email or manual entry. Retailers and suppliers agree on message formats and send files on a schedule. It reduces keying errors and speeds up replenishment, but needs clean item codes and disciplined master data on both sides to be useful.

Related: Purchase order, Goods receipt note (GRN), Fill rate

One visible unit of a product placed at the front of a shelf, counted across the width of the display. The number of facings decides how much space a product gets and how easily a shopper notices it. Retailers and brands negotiate facings carefully, since more facings usually mean better visibility, fewer gaps and stronger sales for that item.

Related: Planogram, Shelf space, Category management

A stock rotation rule where the oldest received goods are sold or dispatched first. It is applied in warehousing and shelf replenishment by placing new stock behind existing stock. FIFO matters for perishables and dated products because it reduces expiry losses and write-offs, and it also shapes how inventory value is reported.

Related: Batch tracking, Expiry management, Inventory turnover

The proportion of ordered quantity that a supplier or warehouse actually delivers or fulfils. It is calculated by dividing units supplied by units ordered. A low fill rate signals unreliable supply and causes stockouts downstream, so retailers use it to judge vendors and to decide whether to keep backup sources or larger buffers.

Related: Stockout, Lead time, Purchase order

A fixed cost is an expense that stays broadly the same regardless of how much a store sells in a month, such as rent, salaried staff, insurance or software subscriptions. Retailers separate fixed from variable costs because fixed costs set the sales floor a store must clear to break even, and they rise in steps when you add space or people.

Related: Break-even point, Contribution margin, Cash flow

FOFO means franchise-owned, franchise-operated: the franchisee funds and runs the store while the brand supplies the format, products, systems and standards. The brand earns through supply and fees rather than owning the site. Retailers choose it to expand quickly with less capital, but must invest in training and audits so that customer experience stays consistent across outlets.

Related: COCO, Franchise, Store audit

A food safety registration or licence issued by the Food Safety and Standards Authority of India, required for anyone storing, selling or serving food. The type depends on scale and turnover. It obliges the retailer to keep premises clean, store food correctly and display the licence. For grocery, kirana and food-service retailers, it is a precondition to trade and a common check during inspections.

Related: Legal metrology, Batch tracking, Trade licence

The traditional retail channel made up of independent shops, kirana stores and small dealers reached through a network of distributors and wholesalers. Sales flow from company to distributor to retailer to customer, with each level holding stock and margin. Retailers and brands track general trade separately from modern trade because its reach, credit terms and servicing needs differ sharply, especially in smaller towns.

Related: Modern trade, Distributor, Kirana store

A document prepared when goods physically arrive at a store or warehouse, recording what was received, in what quantity, and its condition. It is matched against the purchase order and the supplier invoice before payment. An accurate GRN prevents disputes, catches short supplies or damage early, and keeps stock records and payables correct.

Related: Purchase order, Three-way match, Stock audit

Gross margin is the money left from sales after deducting the direct cost of the goods sold, shown as a share of sales. You calculate it by subtracting cost of goods from net sales, then dividing by net sales. It tells a retailer how much is available to cover rent, staff, marketing and profit, and helps compare categories or stores on a like-for-like basis.

Related: Markdown, Contribution margin, Inventory turnover

The Goods and Services Tax is India's single indirect tax on the supply of goods and services, applied at each stage with credit for tax already paid on purchases. Retailers must register where required, charge the correct rate by product category, issue compliant invoices and file periodic returns. Correct GST handling affects pricing, input credit and stock transfers between outlets and warehouses.

Related: Invoice, Input tax credit, E-invoicing

A numbered classification used to group goods by type for taxation and reporting. Each product maps to an HSN code, which determines the tax rate applied and appears on invoices and returns. Retailers must tag every item with the correct code in their billing and inventory systems. Wrong codes lead to incorrect tax charged, mismatched filings and possible penalties, so catalogue hygiene matters as much as shelf hygiene.

Related: Tax invoice, E-invoicing, E-way bill

A supply model where stock moves from a central warehouse or mother hub to smaller spoke stores or delivery points near customers. The hub holds bulk inventory and replenishes spokes on a schedule, while spokes handle local fulfilment. It matters because it balances stock availability with fast local delivery, and replenishment planning across hubs and spokes is a core task for category and operations managers.

Related: Dark store, Hyperlocal delivery, Assortment

A model where orders are fulfilled from a small store or hub close to the customer rather than a distant warehouse. The operator maps each hub to a set of nearby pin codes, routes riders from there, and keeps stock matched to local demand. It matters because delivery time and cost depend on hub placement and rider density, so store and category managers must plan stock and staffing around the areas each hub serves.

Related: Dark store, Last-mile delivery, Serviceable pin code

The movement of goods from suppliers or factories into the retailer's warehouse or store. It covers scheduling, transport, unloading, and receipt. Efficient inbound logistics shortens lead times, reduces damage and detention costs, and improves fill rates, which directly affects whether shelves stay stocked and working capital stays controlled.

Related: Lead time, Goods receipt note (GRN), Hub-and-spoke distribution

Paying or partnering with content creators to feature products in videos, posts or live streams, usually in exchange for a fee, free product or a sales-linked commission. Reach and engagement are tracked through link clicks, codes or affiliate dashboards. It matters to retailers because creator-led demand can spike suddenly, affecting stock cover, and because many creators now sell directly through live commerce.

Related: Live commerce, Affiliate marketing, Brand recall

The tax a business has already paid on its purchases, which can be set off against the tax it collects on sales. To claim it, the purchase must appear in a valid tax invoice and in the supplier's filed returns. For retailers, credit reduces the effective cost of stock and services; unclaimed credit is a silent margin leak, often caused by missing invoices or unregistered suppliers.

Related: Tax invoice, E-invoicing, Working capital

The degree to which the stock quantity recorded in the system matches what is physically present. It is measured by comparing counted stock against system stock for sampled items. Poor accuracy causes false availability online, missed sales, and rushed emergency orders, so retailers track it and fix root causes such as mis-scans or unrecorded returns.

Related: Cycle count, Stockout, Shrinkage

Inventory turnover measures how many times stock is sold and replaced over a period. It is calculated by dividing cost of goods sold by average inventory value. A low ratio suggests money is locked in slow-moving stock, while a very high ratio can signal thin buffers and possible stockouts. It is a core health check for store, category and warehouse planning.

Related: Sell-through rate, Working capital, Dead stock

A small, owner-run neighbourhood grocery shop that stocks everyday staples, packaged foods and household goods, often sold loose or in small packs. It works on personal credit, home delivery by phone or message, and tight relationships with regular customers. For retailers, kirana stores are both competitors and potential partners, since many now source through apps, sell online, or act as pickup points.

Related: General trade, Modern trade, Distributor

The final leg of an online order's journey, from the local hub or store to the customer's door. It is the most expensive and least predictable part of fulfilment because it involves individual addresses, traffic and failed attempts. Retailers manage it through pin code serviceability, route planning and choosing courier partners suited to their product and city.

Related: Return to origin, Quick commerce, Serviceable pin code

The total time between raising a purchase order and the goods being ready for sale, including supplier processing, transit, and receiving at the store or warehouse. Retailers track it to plan reorder points and safety stock. Longer or unreliable lead times force higher buffers, so reducing lead time frees working capital and improves availability.

Related: Reorder point, Safety stock, Purchase order

The set of rules that govern how goods are weighed, measured, packed and labelled for sale. Pre-packaged items must carry declarations such as net quantity, maximum retail price, manufacturer details and consumer care contact. Inspectors can check scales and labels at your store. For retailers, correct declarations and verified weighing instruments avoid penalties and customer disputes, and are especially important for loose staples, fresh produce and private-label packs.

Related: Maximum retail price (MRP), Private label, Stock audit

Rules under the legal metrology law that set what must be printed on pre-packaged goods sold to consumers. They cover declarations such as net quantity, MRP, month of packing, manufacturer or importer details and consumer care information. For retailers, especially those selling private label or repacked goods, compliance on the pack label is checked at shelf level and errors can lead to penalties.

Related: Maximum retail price (MRP), Legal metrology, Private label

A structured scheme that rewards repeat customers with points, discounts or member prices, usually tracked through a mobile number or card. The retailer records each purchase against the customer and sets rules for earning and redeeming rewards. It helps build repeat visits and gives useful purchase data, but the reward cost must be planned so it does not quietly erode margins.

Related: Customer lifetime value (CLV), Average order value, Brand recall

A markdown is a planned or forced reduction in the selling price of goods, usually to clear slow stock, season-end inventory or damaged items. It is recorded as the difference between the original price and the reduced price. Retailers track markdowns closely because heavy discounting protects cash and shelf space but eats into gross margin, so timing and depth matter.

Related: Gross margin, Sell-through rate, Dead stock

A third-party merchant who lists and sells products on an online marketplace while the platform handles discovery, payments and often logistics. The seller pays the platform a commission on each sale plus fees for services used. Retailers join marketplaces to reach customers beyond their own catchment without building a website or delivery fleet, but they compete for visibility with other sellers of similar goods.

Related: Commission, Payment reconciliation, Product listing

The highest price at which a pre-packaged product may be sold to a consumer, printed on the pack. Retailers may sell below it but not above it, and cannot add charges on top for the packed item. Discounting below MRP is allowed and common. For retailers, MRP simplifies shelf pricing and billing, but it must be printed correctly, and selling above MRP invites complaints and legal action.

Related: Legal metrology, Markdown, Point of sale (POS)

The lowest basket value an operator accepts for delivery, or the threshold below which a delivery fee applies. It is set so that the margin on an order covers picking and delivery cost. It matters because it filters out unprofitable small orders and encourages customers to add items, though set too high it can push shoppers to competitors or to store visits.

Related: Basket size, Delivery fee, Cart abandonment

Organised retail through chain stores, supermarkets and hypermarkets that buy centrally and sell under a common brand. Unlike general trade, stock, pricing and displays are managed through planned systems rather than individual shopkeepers. Retailers use the term to separate this channel in sales reporting, because margins, listing fees and promotional terms are negotiated differently from traditional distribution.

Related: General trade, Planogram, Category management

A survey measure of customer loyalty, based on asking how likely a shopper is to recommend the brand or store. Responses are grouped into promoters, passives and detractors, and the score is the promoter share minus the detractor share. Retailers track it to spot service, delivery or product problems early and to compare outlets or channels, though it should be read alongside actual repeat purchase data.

Related: Repeat purchase rate, Customer lifetime value, Brand recall

An approach where a retailer's physical stores, website, app and marketplace listings share inventory, pricing and customer data, so shoppers can buy, collect or return through any channel. It usually requires a common stock view and order management system. It matters because customers expect to check stock online, reserve for pickup or return a web order at a nearby store.

Related: Click and collect, Inventory management, Quick commerce

Software that holds the full life of an order, from placement to delivery or return, across channels. It decides which warehouse or store fulfils an order, tracks status and handles cancellations and exchanges. Retailers selling on several channels use it to avoid overselling the same stock and to give customers one consistent view of their order.

Related: Omnichannel, Inventory accuracy, Return to origin

A service that securely passes card, netbanking and wallet payments from a customer to the retailer's bank account. It encrypts details, seeks bank approval and reports success or failure back to the website or app. For online sellers, gateway success rates and settlement reports directly affect order confirmation and reconciliation, so failed payments must be retried or refunded promptly.

Related: Payment reconciliation, Cart abandonment, Unified Payments Interface (UPI)

The process of matching orders, payments collected, platform commissions, courier charges and refunds against the money actually settled into the seller's bank account. Marketplaces settle in cycles, so gaps and shortfalls must be traced order by order. Regular reconciliation protects margins and surfaces disputes over failed deliveries, returns and fee errors.

Related: Marketplace seller, Cash on delivery, Commission

The in-store or in-hub process of collecting ordered items from shelves and assembling them into a customer order. Staff follow a pick list, often sequenced by aisle or shelf position, then pack items for handover to a rider or courier. Speed and accuracy here directly affect fulfilment time, missing-item complaints and packing cost, so layout and stock accuracy are operational priorities for store managers.

Related: Dark store, Stock keeping unit, Shrinkage

A diagram that shows exactly where each product sits on a shelf or fixture, including facings, height and grouping. It is built from sales data and supplier terms, then followed by store staff during setup and refills. A good planogram makes products easy to find, keeps bestsellers at eye level and ensures every outlet displays the range in a similar, planned way.

Related: Facing, Category management, Shelf space

The place and system where a sale is completed and billed, usually a billing counter with a computer, billing software, barcode scanner and payment terminal. The POS records each item sold, applies taxes and discounts, and updates stock. For a retailer it is the main source of sales data, so clean item codes and correct tax settings matter more than the hardware itself.

Related: Barcode, Inventory accuracy, Payment reconciliation

Products owned and branded by the retailer rather than a manufacturer, made by contract factories to the retailer's specification. Private labels usually carry better margins and build store loyalty, and they give the retailer control over pricing and pack sizes. Retailers must manage quality, supplier audits and shelf space carefully, since a weak private label can damage trust in the whole store.

Related: Contract manufacturing, Gross margin, Shelf share

A model where groceries and everyday items are picked, packed and delivered to the customer within a short window, usually under an hour, from small neighbourhood warehouses rather than full stores. Orders arrive through an app, and riders are dispatched as soon as a picker confirms the pack. Retailers use it to capture top-up and emergency purchases that would otherwise go to a nearby shop.

Related: Dark store, Last-mile delivery, Average order value

The stock level at which a fresh order should be placed so that goods arrive before the shelf runs empty. It is worked out from average daily sales multiplied by the supply lead time, plus a safety buffer. Setting it correctly prevents both stockouts and over-ordering, and it must be recalculated when demand or supplier timelines shift.

Related: Safety stock, Lead time, Stockout

Software that runs day-to-day store operations: billing, stock, purchase, pricing and reports. It links the billing counter to a central stock record so sales reduce inventory and purchases add to it. For a growing chain, an RMS with clean item and tax masters gives owners reliable sales and stock reports, and makes it easier to add new stores or channels later.

Related: Point of sale (POS), Inventory turnover, Stock audit

A shipment that comes back to the seller because the customer refused delivery, was unavailable, or the address could not be found. The forward and reverse legs are both charged to the seller, and the product must be checked before it is resold. High return-to-origin rates quietly erode margins, so operators track them by pin code and courier to fix address and confirmation issues.

Related: Cash on delivery, Reverse logistics, Last-mile delivery

The process of assigning available delivery riders to pending orders based on distance, load and time. Systems or supervisors match each order to a rider, group nearby orders into one trip where possible, and rebalance riders across zones as demand shifts. Good allocation reduces waiting time and idle capacity, which matters because rider cost and delivery promise are both driven by how well trips are batched and routed.

Related: Last-mile delivery, Hyperlocal delivery, Serviceable pin code

Extra inventory a retailer holds beyond expected demand to cover delays in supply or sudden spikes in sales. It is set by looking at how much demand varies and how long replenishment takes, then keeping a buffer for the worst likely case. It protects against stockouts but ties up cash, so it should be reviewed as lead times and sales patterns change.

Related: Reorder point, Lead time, Inventory turnover

Sell-through rate shows how much of the stock received or displayed was sold in a given period. It is calculated by dividing units sold by units available, expressed as a percentage. Buyers and category managers use it to judge whether a style, size or brand is working, to plan reorders, and to decide when to mark down stock before it blocks working capital.

Related: Markdown, Inventory turnover, Dead stock

A postal code area that an online retailer or its courier partner agrees to deliver to, often with a promised timeline and payment options. Orders outside the list are blocked or shown as unavailable at checkout. Reviewing the list helps retailers balance reach against delivery cost and return risk, especially in low-density or remote areas.

Related: Last-mile delivery, Return to origin, Cash on delivery

A state-level registration required for shops, commercial offices and warehouses under labour rules. It records the establishment, its owner and its employees, and governs working hours, leave and record-keeping. For retailers, it is a basic operating document for stores and back offices; missing registration or poor records can attract inspections, fines and complications during leases or funding due diligence.

Related: Trade licence, Contract labour, Payroll compliance

The gap between recorded stock and actual stock, caused by theft, damage, expiry, supplier shortfalls or billing errors. It is calculated by comparing book stock with physical stock found during counting, then valued at cost. Retailers watch shrinkage closely because it quietly eats margin, and they reduce it through audits, secure displays, tight receiving checks and disciplined expiry rotation.

Related: Stock audit, Inventory, Expiry management

A stock audit is a physical count and verification of inventory against records, done periodically or at random. Auditors count units, check expiry and condition, and reconcile differences with book stock. Retailers use audits to detect shrinkage, correct system errors, value closing stock for accounts, and hold store or warehouse teams accountable for stock accuracy.

Related: Shrinkage, Inventory turnover, Working capital

A stock keeping unit, or SKU, is a unique code for one specific sellable item, distinguished by size, colour, pack or variant. Every purchase, sale and stock count is recorded against an SKU, so it is the basic unit of inventory control. Retailers use SKU-level data to decide what to reorder, discontinue or promote, and to keep billing and stock records accurate.

Related: Inventory, Assortment, Reorder point

A situation where an item a customer wants is not available on the shelf or in the warehouse. It is measured as the share of items or visits where demand could not be met. Stockouts lose the sale, may push the customer to a competitor, and distort sales data, so tracking them by item and location helps fix replenishment gaps.

Related: Fill rate, Safety stock, Reorder point

An extra delivery charge applied when demand for riders exceeds supply, such as during rain, festivals or peak evening hours. The fee is added at checkout or to the rider payout to attract capacity and manage order flow. It matters because it helps keep delivery promises during spikes, but poorly communicated surge charges can deter customers and raise complaints.

Related: Delivery fee, Rider allocation, Delivery promise

A bill issued by a seller that shows the goods or services sold, the tax charged and the registration details of both parties. It is the document a buyer uses to claim input tax credit and a seller uses to report output tax. For retailers, issuing a proper invoice for every taxable sale, and storing it, is a compliance basic; incomplete invoices create filing errors and weaken the customer's claim.

Related: HSN code, E-invoicing, Credit note

A control that compares three documents before a supplier is paid: the purchase order, the goods receipt note, and the supplier invoice. Payment is released only when quantity and price agree across all three. It prevents overpayment, catches short or wrong deliveries, and keeps inventory valuation and accounts payable reliable.

Related: Goods receipt note (GRN), Purchase order, Credit period

A permission from the local municipal authority to run a shop or commercial establishment at a given address. It is separate from tax registration and often linked to shop-and-establishment rules and fire and safety clearances. For retailers, the licence must match the actual premises and activity; operating without it, or after shifting or expanding, can lead to closure notices and penalties.

Related: Shops and Establishment registration, Legal metrology, Fire safety certificate

Activities a brand runs with or inside retail channels to push its products, such as visibility displays, shelf talkers, dealer incentives and staff contests. It sits between brand advertising, which pulls shoppers, and sales, which books orders. Retailers negotiate these inputs because they bring footfall and margin support, while brands use them to secure display space and influence the final purchase decision in store.

Related: Point of purchase, Shelf talker, Channel partner

A payment system that lets a customer pay from a bank account using a mobile app and a virtual address, without sharing card details. The store displays a QR code or accepts a collect request, and the payment is confirmed in the billing system. Retailers like it for speed at the counter, but should confirm settlement in their account rather than relying only on the customer's screen.

Related: Point of sale (POS), Payment reconciliation, Cash on delivery

Software that directs work inside a warehouse: where to put incoming stock, which location to pick from, and how to pack and dispatch. It tracks stock by bin and batch and guides staff through handheld devices. For ecommerce and quick-commerce operators, a WMS keeps pick paths short and stock counts accurate, which matters when orders must be fulfilled within tight windows.

Related: Pick and pack, Inventory accuracy, Batch tracking

Working capital is the money tied up in day-to-day operations: stock, receivables from buyers or marketplaces, and cash, minus what you owe suppliers. It is calculated as current assets minus current liabilities. Retailers with fast growth often run short of it because stock and credit must be funded before sales convert to cash, so managing payment terms matters as much as margin.

Related: Inventory turnover, Credit period, Cash flow