SourceDirect’s Complete Guide to Wholesale Terms

wholesale accounting

Buyer Terminology: Check out SourceDirect’s Guide to Wholesale Terms

Whether you are an exhibitor or buyer, it is important to have a great handle on the business side of things. This glossary of wholesale terms will help you conduct business at SourceDirect at ASD successfully.


A store, restaurant, hotel or other business that buys products at wholesale prices and then resells at retail prices.


The variety of products a seller offers to retailers.


The name of a particular product created by a particular company.


Independent company or individual who sells products made by multiple manufacturers, usually on straight commission.


The practice of retailers negotiating for a seller to accept any unsold inventory and provide a refund.


The person who makes or influences the buying decisions for an account.

Case Packs

Bundled quantities of the same product offered to retailers to simplify the ordering process.

Cash on Delivery (COD)

With COD, a retailer pays for goods upon delivery, rather than in advance.


A digital or printed visual representation of a wholesale line and policies.

Cost of Goods Sold

The dollar amount that a seller calculates by looking at the cost of raw materials used to make a product.


A group of items that fit together thematically or that could be sold as a set.


In this type of agreement, the retailer typically charges a fee to house and sell items for around 30 to 40 percent of their price.

Delivery Window

A guarantee that goods will ship during a specific timeframe.

Distribution Center

Retailers with multiple locations often have these facilities. Instead of shipping directly to each retail store, the seller ships to a distribution center. Specific quantities of products are then sent from the distribution center to each designated retail store.


Independent company that purchases and warehouses products from manufacturers and then sells and delivers to their wholesale buyers.


This process involves a designer shipping goods directly to a retailer’s customers.


Some retailers may ask a seller to refrain from working with other retailers within a certain area, or to refrain from offering a particular item or set of items to other retailers.


An exporter ships products outside of the US to international wholesale customers.


An importer brings products from other countries into the US, and then sells those products to wholesale buyers.

In and Out

When a distributor or warehouse special-orders product and does not maintain stock in the warehouse.


The document a seller provides the retailer at the time the retailer has agreed to pay for goods. It typically includes information about the amount of goods sold and what they are, the cost of the products, additional charges to the retailer, the date, a transaction number and contact information for both parties.


A pricing method that involves doubling a wholesale price to get a suggested retail price.

Lead Time

The amount of time a seller will require before being able to deliver goods to a retailer.


The products offered by a seller.


A document that displays all of the products in a seller’s line.


Someone who makes products and sells them to wholesale buyers at wholesale prices.

Manufacturer’s Representative

A sales rep who works for a certain manufacturer.

Manufacturer’s Suggested Retail Price (MSRP)

The price a seller recommends that retailers utilize.


The difference between a wholesale price and the actual cost of producing an item.


The dollar amount or percentage change between a wholesale and retail price.


The amount of money or quantity of items required for retailers to warrant a wholesale order with a seller.

Net Payment Terms

A type of payment plan that involves a retailer paying for items after they have had time to sell a seller’s items in their store.


The budget a retailer has to place orders.

Point of Sale (POS)

The point at which a retailer receives payment from the shopper.

Private Label

The practice of hiring a designer to develop a product under another company’s brand name. Also known as “white label.”

Purchase Order

A document submitted to the seller detailing the product descriptions and quantities that a retailer wants to buy from the seller.

Recommended Retail Price (RRP)

The price that a seller recommends retailers charge for his or her item.

Resale Tax ID Number

In the US, sellers do not charge sales tax for wholesale transactions, provided that retailers have a resale tax ID number. This ensures the government that sales tax will be charged to the end consumer when the retailer resells the goods.

Sales Representative (Sales Rep)

A sales rep is responsible for pitching a seller’s line to potential new retail accounts. In exchange, the seller pays the sales rep an agreed upon percentage of the sales, typically between 12 percent and 30 percent.


Physical examples of a seller’s pieces provided to a retailer before purchase so the retailer can experience the products firsthand.


How fast a product sells in a store or location.


A list of retailers that offer a seller’s items.

Stock-keeping Unit (SKU)

A unique code or series of numbers assigned to each style of product in a line. SKUs are most often used when a seller has a large amount of inventory to manage.


Labels with relevant product information affixed to merchandise. Also called “hang-tags.”

Universal Product Code (UPC) Labeling

A system used to track inventory and sales by assigning a unique barcode with a string of digits to each product.


A seller, designer or manufacturer that supplies goods to a retailer.

Vendor Compliance

Rules that detail the ways retailers require the seller to do business with them.


A business-to-business relationship between a party providing goods and the retailer who is buying them to then resell to consumers.

Wholesale Showroom

A facility where designers’ lines are shown by sales reps to potential retail accounts and other industry professionals. Fees for displaying items in such showrooms often include monthly rent and expenses to cover trade shows and events, in addition to a percentage of total sales.

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