Wholesale News Header

A

Ad Valorem Tariff

A customs duty or tax levied on imported goods, calculated as a percentage of their assessed value. For example, a 5% ad valorem tariff on goods valued at $1000 would be $50. See our page on Customs Tariffs.

Agent (Sourcing Agent)

An individual or firm that acts on behalf of a buyer (importer/wholesaler) to find suppliers, negotiate prices, manage quality control, and oversee logistics in a foreign country. Often used in international product sourcing.

ABC Analysis

An inventory management technique that categorizes inventory items into three groups (A, B, and C) based on their consumption value. 'A' items are high-value, 'C' items are low-value, guiding prioritization of control efforts.

B

B2B (Business-to-Business)

Commercial transactions conducted between two or more businesses, such as a wholesaler selling to a retailer, rather than between a business and a consumer (B2C).

Bill of Lading (BOL or B/L)

A legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. It serves as a receipt of shipment, a contract of carriage, and often as a document of title to the goods. Crucial in shipping and freight.

Bonded Warehouse

A customs-controlled warehouse where imported goods can be stored, manipulated, or undergo manufacturing operations without payment of duty. Duties are paid when the goods are released for domestic consumption. See Warehousing.

C

Carrier

A company that transports goods or people for a fee. In wholesale, this refers to trucking companies, shipping lines, airlines, or rail companies involved in freight movement.

CIF (Cost, Insurance, and Freight)

An Incoterm where the seller pays the costs and freight necessary to bring the goods to the named port of destination. The seller also procures marine insurance against the buyer's risk of loss or damage to the goods during carriage. Risk transfers to the buyer once the goods are on board the vessel.

COGS (Cost of Goods Sold)

The direct costs attributable to the production or acquisition of the goods sold by a company. For wholesalers, this typically includes the purchase price from the supplier and any direct costs to get the inventory ready for sale.

Cycle Count

An inventory auditing procedure where a small subset of inventory, in a specific location, is counted on a specified day or cycle. Cycle counts are less disruptive than full physical inventories and help maintain accuracy.

D

Distributor

A business that buys products from manufacturers and sells them to retailers or other businesses. Distributors often have exclusive agreements for specific territories or product lines and may provide additional services like marketing or after-sales support.

Drop Shipping

A retail fulfillment method where a store doesn't keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party (often a wholesaler or manufacturer) and has it shipped directly to the customer.

E

EOQ (Economic Order Quantity)

An inventory management formula that determines the ideal order quantity a company should purchase to minimize total inventory costs, including holding costs, shortage costs, and order costs.

F

FOB (Free On Board)

An Incoterm indicating that the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. The risk of loss or damage to the goods passes to the buyer when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.

Freight Forwarder

A company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. They contract with various carriers to move the goods and manage logistics. Key in Shipping & Freight.

FTL (Full Truckload)

A mode of shipping where an entire truck is dedicated to a single shipment from one shipper. This is typically used for large shipments that can fill, or nearly fill, an entire trailer.

G

Gross Margin

The difference between revenue and the Cost of Goods Sold (COGS), divided by revenue, expressed as a percentage. It represents the percent of total sales revenue that the company retains after incurring the direct costs associated with producing the goods and services sold.

H

HS Code (Harmonized System Code)

An internationally standardized system of names and numbers to classify traded products. Maintained by the World Customs Organization (WCO), HS codes are used by customs authorities worldwide to identify products when assessing duties and taxes and for gathering statistics. Critical for Customs Tariffs.

I

Incoterms®

A series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) relating to international commercial law. They define the responsibilities of buyers and sellers in international transactions, particularly regarding shipping, insurance, and risk transfer.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory during a given period. It is calculated by dividing the Cost of Goods Sold (COGS) by the average inventory. A key metric in Inventory Management.

K

KYC (Know Your Customer)

A set of processes and due diligence measures that businesses, especially financial institutions, undertake to verify the identity of their clients. This is crucial for Anti-Money Laundering (AML) efforts and managing Regulatory risk.

L

Landed Cost

The total cost of a product once it has arrived at the buyer's door. This includes the original cost of the item, all brokerage and logistics fees, shipping costs, customs duties, tariffs, taxes, insurance, currency conversion, crating, handling and payment fees. Essential for accurate Product Sourcing decisions.

Lead Time

The latency between the initiation and execution of a process. In wholesale, it commonly refers to the time taken from placing an order with a supplier to receiving the goods.

LTL (Less Than Truckload)

A mode of shipping for relatively small freight. LTL shipments typically share space on the same truck with other shippers' freight, making it more cost-effective for smaller quantities than FTL.

M

Margin (Gross Margin)

See Gross Margin.

Markup

The amount added to the cost price of goods to cover overheads and profit. It's the difference between the selling price and the cost, often expressed as a percentage of the cost.

MOQ (Minimum Order Quantity)

The smallest amount of a product that a supplier is willing to sell in a single order. This is a key consideration in product sourcing and procurement.

N

Net Terms

Payment terms offered by a seller to a buyer, allowing the buyer to pay for goods or services at a later date (e.g., Net 30 means payment is due within 30 days of the invoice date). Common in B2B transactions and relevant to Trade Finance.

O

Open Account

A trade arrangement in which goods are shipped and delivered before payment is due, typically in 30 to 90 days. This is advantageous to the importer but carries higher risk for the exporter.

P

Procurement

The overarching process of acquiring goods, works, or services. Strategic procurement involves identifying needs, sourcing and selecting suppliers, negotiating contracts, and managing supplier relationships to achieve organizational objectives. See our guide on Procurement Strategies.

Private Label

Products manufactured by one company for sale under another company's brand name. Wholesalers may develop private label lines for their retail customers.

R

Retailer

A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier, who normally sell to another business.

RFQ (Request for Quotation)

A business process in which a company invites selected suppliers to submit price quotes and bids for specific products or services. A key step in procurement.

Reverse Logistics

The process of managing the return of goods from customers back to the seller or manufacturer. This includes handling returns, repairs, refurbishing, recycling, or disposal. Part of the broader Supply Chain.

S

Safety Stock

An extra quantity of a product kept in inventory to prevent stockouts resulting from uncertainties in supply or demand.

SKU (Stock Keeping Unit)

A unique alphanumeric code assigned to each distinct product and service that can be purchased. Used to track inventory, identify products, and manage sales data.

Supplier

A business or individual that provides goods or services to another entity. In wholesale, this is typically the manufacturer or producer from whom the wholesaler sources products. See our Supplier Spotlights.

T

Tariff

A tax or duty imposed by a government on imported or, less commonly, exported goods. See our detailed guide on Customs Tariffs.

3PL (Third-Party Logistics)

A provider that offers outsourced logistics services, which can include transportation, warehousing, inventory management, order fulfillment, and freight forwarding. Often used by wholesalers to manage parts or all of their supply chain operations.

Trade Finance

Financial products and services that facilitate international trade by mitigating risks and providing funding. Includes letters of credit, documentary collections, factoring, etc. Learn more on our Trade Finance page.

V

Vendor

Another term for a supplier or seller; an entity that provides goods or services.

VMI (Vendor-Managed Inventory)

A supply chain practice where the supplier (vendor) takes responsibility for maintaining agreed-upon inventory levels at the buyer's (wholesaler's or retailer's) location. The supplier has access to the buyer's inventory data and automatically replenishes stock.

W

Wholesaler

A business entity that purchases goods in large quantities directly from manufacturers or other suppliers and resells them in smaller quantities to retailers, other businesses, or institutional users, but generally not to the end consumer.

WMS (Warehouse Management System)

A software application that helps control and manage the day-to-day operations in a warehouse, including inventory tracking, receiving, putaway, picking, packing, and shipping. Key for efficient Warehousing.