There are a lot of strange terms that go along with any industry, and Etsy and ecommerce is no exception. If you’ve ever wondered what specific acronyms or terms mean, read on and see if the one you wondered about is included in this guide!
Table of Contents
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A
ACTIVE ETSY SELLER– Etsy defines an “active seller” as someone who has had at least one charge from the company in the past 12 months. So if you list one thing, then never return and it expires and you don’t renew it, you’re still counted as an “active seller” for the rest of that 12-month time period.
ALGORITHM– A computer program or formula that
AOV– Average Order Value, or the total revenue from your orders divided by the number of orders. AOV is one way to keep track of how your revenue is doing, because increasing AOV will obviously increase your income as long as your order numbers stay constant.
B
B2B– Business to Business, usually meaning that your business sells to other businesses. That would usually be services like bookkeeping, software for businesses, and marketing services.
B2C– Business to Consumer, which just means that you sell products to people for personal use.
C
CONVO– When someone says “send me a convo” that just means to send a message using the Etsy message system. For some reason messages were referred to as “convos” when Etsy first started, and it’s stuck even though Etsy doesn’t refer to them that way.
CPC– Cost Per Click, or how much you would pay Etsy each time someone clicks on one of your ads if you use Etsy Ads.
CSV– Comma Separated Value, this is a type of spreadsheet file. Etsy uses .csv files for reporting sales and financial information, they can be downloaded for bookkeeping purposes. CSV files can be opened using Excel, Google docs, and other spreadsheet programs.
CURRENCY CONVERSION FEE– The fee that banks charge to convert US dollars to the currency of a different country when Etsy does the payment transfers to sellers. If your Etsy shop prices are set to a currency that’s different from the one that your country uses, you’ll have to pay the conversion fee when Etsy transfers your money to your bank. If your Etsy shop currency is set to the currency that you use in your country, you won’t have to pay the fee.
D
DBA– “Doing Business As,” which is a legal definition meaning that you’re doing business under a name that’s not yours. If you have a legally registered business name and you want to do business under a different name, you may need to register a DBA with your state or country, or register the second business name separately. In many places, it’s illegal to receive payments for goods or services if you’re operating under a name that’s not yours. Check with your local authorities to find out what you need to do to be compliant.
E
EBITDA– Mentioned often during Etsy investor presentations, this is Earnings Before Interest, Taxes, Depreciation and Amortization.
ECOMMERCE– Any business that’s done online instead of in physical shops. It’s short for Electronic Commerce.
ETSY ADS– The ads system on Etsy that you can use to show ads on Etsy.
ETSY SEARCH– The search engine on Etsy itself, when Etsy’s official pages refer to “Search” this is what they mean.
F
FAVORITES– When someone has clicked the heart button on a listing or a shop, it’s been favorited. These will be included on the person’s profile in their favorite items and shops sections. Favoriting on Etsy used to be for shops and listings, but Etsy has recently started referring to favoriting shops as “following” shops too.
FOLLOWING– When someone clicks on a user’s profile and follows them, they’ll see the things that the person has favorited. Etsy has recently started referring to favoriting shops as “following” them.
G
GDPR– General Data Protection Regulation. These are a set of laws that are aimed at limiting how a customer’s data is used, especially for email lists and signups. Because of GDPR laws, many countries require explicit consent from customers to sign them up to email lists, and it’s illegal to sign people up without their permission.
L
LISTING FEE– The fee that you pay when listing or relisting an item for sale on Etsy. This is a flat fee that is charged any time an individual item is added for sale.
M
MARKUP– The percentage of the item price that’s added to the base cost. So if you pay $10 for an item and sell it for $15, that’s a 50% markup because $5 is 50% of $10.
N
NEXUS– This is a term that refers to whether you have a business presence in a specific location, usually for tax and sales tax purposes. If you do business in a specific state or country, you have nexus there. In addition, if you use a warehouse to store merchandise in a state or country that isn’t where you live, you probably have nexus there too, depending on how your locality defines it for tax purposes. If you’re not sure, ask an accountant.
O
OFFSITE ADS- The ads that Etsy runs on outside websites like Google, Pinterest, Facebook, and Yahoo to advertise individual Etsy listings. Offsite ads are paid for by Etsy, and when they result in a sale the seller pays a percentage to help cover the cost of the ad.
OOAK– An item that’s One Of A Kind, either handmade or vintage, that will sell out and not be restocked. One of a kind can mean something that is individually created by an artist, so isn’t repeatable because each one is made individually and is slightly different, or it could be a vintage item that the seller only has one of.
P
PAYMENT PROCESSING FEE– The fee that’s charged by the credit card company or Paypal to process the payment that’s collected from the customer. It’s in addition to the fees that Etsy charges for transaction and shipping fees, and is something that you pay on any site where you collect payments for products.
PCI COMPLIANT– Payment Card Industry Compliance is the set of standards that companies that handle payment and credit card information for customers needs to adhere to. Since Etsy sellers don’t handle customer payment information directly, it’s up to Etsy to maintain those standards for their platform.
PROCESSING TIME– The time that it takes an Etsy seller to put an order together and put it in the mail to the customer. Processing time is the creation time, butit doesn’t include the shipping time.
PRODUCTS– When Etsy talks about “products” they are referring to things that they sell us, such as Etsy Plus, shipping labels, and Etsy ads. They’re not talking about the products that we sell.
PROFIT MARGIN– The net profit margin is the percentage of the sale that you keep after all of your expenses including taxes. Gross profit margin is the percentage left over after subtracting the cost of goods sold and other production costs from the sale price. Profit margin isn’t the same as markup. If you have a $15 sale and the cost of the item plus all of your expenses including taxes was $14, your net profit margin is 15-14/15 x 100 =6.7%
R
ROAS– Return On Ad Spend. This is a basic fraction that measures how much you spent on ads and how much you got back in gross revenue before expenses. If you spent $10 on ads and got $100 back, you have a 10X return on ad spend. ROAS is not the same as ROI.
ROI– Return on Investment. This is the profit that you made compared to what you spent to make that profit after all expenses are taken out. If you spent $10 on ads and got $100 from the ad campaign, but it costs you $70 to make the products, your total expenses are $70 + $10 for ads. That means that out of $100, $80 was expenses, and your ROI is only $20. That would be a 2X ROI since you spent $10 to make $20 in net profit. (See ROAS above, this isn’t the same as that!)
S
SEARCH ALGORITHM– The individual formulas that are included in the search engine that make decisions about what to show the customer. On Etsy, the search algorithm is currently based on personalization, or looking at the customer’s behavior on the site as well as the keywords in the listing.
SEARCH ENGINE– The computer program that looks at what a customer types into the search bar and finds things to show them. Every website that has a search bar has a search engine, but they don’t all work the same way.
SEO– Search Engine Optimization. When Etsy’s official pages refer to SEO, it’s not referring to the search algorithm on Etsy. It’s talking about outside search engines like Google, Bing, Yahoo, Pinterest, etc.
SHIPPING TIME– The time that it takes the shipping company to transport and deliver the order to the customer. Shipping time starts when the seller puts the order in the mail and the estimates that are provided by Etsy are based on the shipping company’s timeline.
SHIPPING TRANSACTION FEE– The fee that’s charged when you collect the price of shipping from a customer . This is charged on the money that you collect from the customer, not on the price of the shipping label. Buying your shipping labels on a platform other than Etsy doesn’t avoid paying this fee.
SVG, JPG, AI, EPS, PNG CDR– These are all types of files or programs that are used for digital products. They’re used for different types of machines or digital artwork.
T
TARGET AUDIENCE– The people who you’re selling to. If you sell baby clothes, your target audience isn’t babies, it’s the people who buy the clothes for the babies.
TRANSACTION FEE– The fee that’s charged when you sell a listing. It’s based on the final sale price of the item.
TVP– Thinly Veiled Promotion, usually used in the Etsy forums when someone says something like “Oh, my shop is selling so much” when it isn’t selling anything. This kind of TVP is designed to send people to the shop to see what’s so popular, so it’s usually considered clickbait and is mocked by other forum members.
U
USP– Unique Selling Proposition, the same thing as UVP but just a different acronym.
UVP– Unique Value Proposition, this is what makes your products different and better than other people’s products.
V
VAT– Value Added Tax. This is a tax that’s added to the cost of the items purchased by customers in specific countries. This is basically a sales tax on goods that are purchased from outside the country, and each individual government imposes them at different rates. The buyer is responsible for paying the VAT tax for their purchases because it’s a tax set by the government of their country.
VIEWS– The number of individual listings or pages in your shop that were looked at. This is usually bigger than the number of Visits, because one person can look at multiple pages in your shop. Views is also used in Etsy ads, but there it refers to the number of times that an ad was on a page that someone was on. The customer didn’t necessarily see the ad, but if it was on the page they count it as a view.
VISITS– The number of individual people who came to your shop.
VTG- Short for “Vintage,” many Etsy sellers use it as part of their tags, even though most buyers have no earthly idea what it means.
Y
YoY– Year-Over-Year, used when you’re talking about your sales stats and comparing the current time period with what was going on a year ago.
