10 Boutique Terms to Know

October 27, 2020 14:48


Being fashionable and being business-savvy are two different things.


I mean, we’re sure you have excellent taste, a magnetic personality, and the willingness to hustle to make your small business a huge success. But what if your eyes tend to glaze over when a supplier starts talking about MOQs, MSRPs, & POS? 


Don’t worry. While there’s a lot of lingo in the retail world, most concepts are relatively simple to understand – and once you’ve got a few terms down, you’ll be able to talk about operations freely and while sounding like you know TOTALLY what you’re talking about. We’ll go over 10 common retail, e-commerce, and boutique terms that are great for any boutique owner to know.



Wholesale is a relationship when a vendor sells items at a discounted price to a retailer (that’s you!) who sells it to the end consumer. Some wholesalers act as middlemen between factories and boutique owners, purchasing a large inventory of factory items and then selling them at a significant markup. Others (like Supplied) work with factories to sell their items directly to retailers, resulting in much lower prices. 


Lead Time

Also called turnaround time, this is the number of days it takes between when the order is placed and when it will ship. It typically does not include shipping time.




MOQ stands for “minimum order quantity.” It’s the minimum number of items or units you can purchase from a wholesaler for the bulk wholesale price. Most wholesalers have MOQs, but not all do – if you’re just starting out, it might be a good idea to choose a supplier with no minimum order quantities.


Drop Ship

This is a distribution method where customers place their orders with a retailer, but the order is fulfilled and shipped directly from the supplier. Retailers who participate in drop shipping still promote, market, and price their products, but they don’t deal with purchasing actual inventory or order fulfillment.


Keystone Markup

Retail lingo for a 50% markup. Say you purchased a sweater at a wholesale price of $9 – a keystone markup would be $18 retail price.



Margins represent the profit you’ll make from each sale, usually expressed as a percentage. As an equation, it’s the retail price minus your wholesale price, divided by your retail price. For example, if you sell a shirt for $20 and the wholesale price you paid was $8, your profit would be (20-8)/20, or 60%. 




This stands for “point of sale.” It’s essentially when and where the sale occurs, whether that’s a physical location like a register or the software you use to conduct your transaction.



You’ve probably seen this on pricetags before. This stands for “manufacturer’s suggested retail price.” It’s the price wholesale vendors or distributors recommend selling an item for in-stores. However, as a retailer, you’re free to sell an item for higher or lower than the MSRP.




Factory-direct refers to items that are sold and shipped directly from the factory they were manufactured in. Typically, factory-direct items are priced much lower than other wholesale items, since they eliminate the middleman and the extra charges that go along with it.



YTD stands for “year to date.” You’ll likely also hear WTD (week to date), MTD (month to date), and STD (season to date). This is term is usually used when measuring sales units or profits.

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