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Duoplane's Dropship Dictionary

09/12/2022

At Duoplane, we understand that dropshipping is not always as straightforward as it is cut out to be. With lots of synonymous terms thrown around, it can be hard to communicate what type of business you are, what type of customers you serve, and what e-commerce tools you are looking for. 

 

If you’ve ever had to second guess whether you’re a vendor or a retailer looking for e-commerce automation software or order management software, this article is for you.  

 

Below is a list of terms and definitions as to how these terms are used on the Duoplane platform. 

 

 

Retailer

 

-Sells their products to the public and in this sense is typically B2C
-A retailer will have a relationship with (potentially many) vendors which are sources of the variety of products they sell.
-In Duoplane, it is a retailer who will typically own the account which will link to their list of vendors for ease in sending purchase orders from the sales they generate in their ecommerce platform.
 
 

 

Vendor

 
–The party doing the fulfillment and selling to the retailer who then sells to the end customer 
-Function as a B2B seller and in Duoplane we define a vendor as the party doing the actual fulfillment, or shipment, of the item(s). 
-A vendor may also sell B2C with their own store (e.g. Shopify) 
 
 Dropshipping
 
–The sale of products by a retailer which are fulfilled directly to the customer from the vendor/supplier. 
-The dropshipping model exists so inventory is held by the vendor/supplier and not the retailer which alleviates the need to order in advance and hold inventory, among other logistical and operational costs.
-Dropshipping is the most popular model of Duoplane users
 Supplier

 -Provide products to the retailer; they may also produce these products, or sell them B2C with their own business. 
-“Vendors” and “suppliers” are often used interchangeably because suppliers have the same role as vendors in this case 
 
 Brand
 

-The brand is the label of the product (e.g. Apple, Nike, etc.). 

 

-In the great majority of cases this is not the same as the vendor/supplier, but it can be. 

 

 

White Label Branding

 

-When the product produced by the supplier is rebranded to appear as if it was made by the retailer by modifying the label, name, packaging, design, etc.

-We consider branding and white-label branding to be something managed more in the ecommerce platform. 

 

 

ECommerce Platform 

 

-The online store in which a retailer sells goods to their end customers
-Selling to customers from an ecommerce platform is very popular among dropship retailers because with an online business the products sold can be shipped from anywhere and inventory does not need to be stored. 
 
Purchase Order 
 
-A purchase order is the order placed with a vendor by their retail partner in order to fulfill a sales order on the retailer’s store. 
-Purchase orders are often fulfilled by the vendor by shipping the items directly to the retailer’s end customer who placed the sales order on their store.
 
Sales Order 
 
-A sales order is the order placed on the retailer’s ecommerce platform by their end customer. 
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 SKU

-A code created to identify and track product inventory
-Products often have names designed to appeal to shoppers, but may be too lengthy or not specific enough in helping to identify the product to a supplier or vendor 

 

Warehouse

 

 

–Where inventory is stored for anyone selling products to end users. 

-This could be a vendor or a retailer, however with dropshipping it is less common for a retailer to hold inventory themselves, so the need for a warehouse is reduced.

-In some cases a dropshipper will have their own brand to manage and require the need 

 

3PL

–A provider outside your organization that can manage multiple facets of fulfillment, such as storing and shipping products. 

 

 

Licensor 

–The party granting rights to its intellectual property for another entity to use. This format is followed by large brands with significant brand awareness. 

Licensee

–The entity who has obtained the rights to another party’s intellectual property. The licensee typically owes royalties to the licensor for use of their IP.

Feed

 

–A file or document that contains the status for each line item of a shipment or product.

-For example, a shipment feed from a vendor that has information like tracking for 50 recent shipments—this file could be sent automatically to Duoplane which would then update the status of those orders in a retailer’s store and update the customer with tracking.

 

 

Please visit our full glossary here for a complete list of terms and definitions.  

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