Glossary

Some common terms used on Drop Ship Digest:

Consumer - See End User

Discount Rate – The fee your merchant account charges you in order to perform a credit card transaction. Usually in the 1%-3% range plus a small fixed amount (i.e. $.25)

Distributor - See Drop Ship Supplier

Drop Ship Fee – An extra service fee a supplier will add to an invoice to cover the costs of drop shipping. Read a detailed description here.

Drop Ship Supplier – A company who sells their goods at wholesale prices and will ship directly to the consumer with no minimum order requirements.

End User -The final person receiving the good. The customer.

MAAP - Minimum Allowed Advertised Price. A rule set by the manufacturer/distributor as to the minimum price you are allowed to advertise the item.

Manufacturer - The company that actually makes the product. A manufacturer may or may not also be a distributor.

Merchant - See Retailer

Margin - The difference between what you buy an item for and what you sell it for. If you buy an item for $1, and sell it for $2, your margin is $1 or 50%

Overhead - Or overhead cost. The cost to run your business excluding products and services. (i.e. payroll, electricity, rent, web
hosting, etc)

Pieces - Individual units. A single thing. (a box may have 50 pieces inside)

Profit - See Margin

Retailer - The company selling the good to the end user (i.e. the store)

Soft Costs – Expenses not usually included in the cost of a product. (i.e. invoicing). Usually part of overhead

Supplier - Same as Drop Ship Supplier

Vendor - Same as Drop Ship Supplier

Widgets - A representative term that means any product