Amazon FBA glossary: every seller term, explained simply
Getting started on Amazon means running into a wall of acronyms: COGS, MOQ, BSR, ACOS, Buy Box. Take them one at a time. Every term that matters is below, in plain English, no jargon. Keep this page handy. You'll read it more than once.
Finding what to sell
Niche
A narrow corner of a big category, say travel gear for cats rather than pet supplies. The tighter the niche, the easier it is to make room for yourself against the competition.
Winning product
A product that is in demand, facing little competition and still profitable once every fee is paid. It's what every seller is hunting for, and it's exactly what SellerScale finds and checks for you.
Private label your own brand
Selling a product made by a supplier under your own brand, with your logo and your packaging, instead of somebody else's. It's the usual way to build something you actually own.
MOQ minimum order quantity
The smallest number of units your supplier agrees to produce. The lower it is, the less cash you tie up in your first order.
ASIN
The unique ID Amazon gives a product, ten characters long. Every listing has one, and it's how you look up and analyze any item on the site.
BSR best sellers rank
Where a product sits in its category on Amazon. The smaller the number, the more it sells. A good read on real demand.
Seasonality
When a product only sells at certain times of year (patio umbrellas in summer, string lights in December). An evergreen product sells all year long, which is safer when you're starting out.
Knowing if a product makes money
COGS cost of goods sold
What one unit costs you delivered to Amazon: manufacturing, freight and duty included (the DDP cost). Every profit calculation starts here.
Net margin
What you keep, as a share of the sale price, once every fee is paid, advertising included. It's the only number that counts: a margin worked out before ad spend means nothing.
ROI return on investment
What comes back compared to what you put in. A 70% ROI means $70 of profit for every $100 you put into inventory.
Break-even units to cover your order
The number of units you have to sell to get your starting money back. Below it you're still paying off the order; above it, every sale is profit.
ACOS
The share of your ad-driven revenue that goes straight back out as ad spend. At launch, 30% to 60% is normal while the product gets moving.
TACOS
The share of your total revenue, ad-driven or not, spent on advertising. Once things settle, 10% to 15% is the target, and it's the real gauge of how healthy the product is.
Returns reserve
Money you set aside for customer returns, which happen in every category. Rates run higher in apparel and electronics, so build that reserve into your margin math from the start.
Shipping and managing your inventory
FBA fulfillment by Amazon
You send your inventory to Amazon, which stores, packs, ships and handles customer service for you. It's the model that lets you sell without running a warehouse.
FBM fulfilled by merchant
You store your own inventory and ship every order yourself. Fewer Amazon fees, but all the logistics work lands on you.
Size tier
The size and weight class your product falls into (small standard, large standard, oversize). It sets your FBA fulfillment fee: half an inch over the limit can push you into the next tier and inflate the bill.
FBA fees
What Amazon charges per unit to fulfill an order: picking, packing, shipping, customer service. They climb with the size and weight of the product, and they sit on top of the referral fee, the 15% cut Amazon takes on the sale price in most categories.
Prep center
A third party that receives your goods, inspects them, labels them and preps them to Amazon's rules before they go to the warehouse. Handy when you'd rather not touch the inventory yourself.
IPI inventory performance index
A score Amazon gives your inventory management (not too much stock, not too little). If it drops too low, Amazon caps how much you're allowed to send in.
Selling once you're live
Listing sales page
Your product's page on Amazon: title, photos, bullets, description. Its quality decides your sales: a good product with a weak page doesn't sell.
Buy Box
The Add to Cart button. When several sellers offer the same item, winning the Buy Box means taking the large majority of the sales. Price and account health decide who gets it.
PPC pay per click
Amazon's paid ads: you pay every time a shopper clicks. It's how you launch a product and show up in the search results at the start.
Reviews customer feedback
The ratings and comments customers leave. They make or break a product, and the first handful are the hardest to get and the most valuable.
Hijacker
A seller who piggybacks on your listing to sell a copy or a counterfeit of your product. Watch for it and report it to Amazon fast.
Staying compliant
UPC / GTIN barcode
The barcode on your product, required to create a listing on Amazon. You buy it from GS1, the official body, not from a reseller making numbers up.
Sales tax
Amazon collects and remits the sales tax on your orders in every state that has a marketplace facilitator law. It never comes out of your pocket, so it has no place in your margin math.
Customs bond
What you need to bring a commercial shipment worth more than $2,500 into the United States, along with an EIN used as your importer number. Without them your cargo sits at the port.
Prop 65 California warning
The warning label some products must carry to be sold to buyers in California (certain chemicals, materials, packaging). A box to check when you build your listing, but not one to forget.
Still find these words intimidating? That's normal at the start, and it goes away fast. The free profit calculator lets you run these numbers on a real product, no account needed.
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