Key Terms

Drop-ship / Drop-shipping: A fulfillment method where a store does not carry any product inventory. Instead, when a store sells a product, it purchases the item from a third party (i.e. a wholesaler) and has it shipped directly to the customer. The way this business model makes money is through the profit margin of the product, minus the cost of goods and the cost of advertising. 

Upsell: A sales technique where a seller offers a customer who has just made a purchase with another related product(s) such as an upgrade or add-ons to increase the value of a sale.

Downsell: A sales technique where a seller offers a customer who wants to back down from a purchase with a cheaper alternative, which increases the chances of getting the sale.

Cross sell: A sales technique where a seller offers a customer with new product or service that is different than the original purchase to increase the value of a sale.

Lead: A potential customer who has provided you with their contact information such as their emails or phone number.

List: A email database of all your customers and or prospects.

Click: The number of times your ad is clicked on to your website or landing page.

Impression: The number of times your ad is displayed, that is, it has been loaded on a web page. It does not necessarily mean that people have seen your ad. 

Click-through-rate (CTR): The percentage of clicks you receive when someone sees your ad. CTR equals to the number of clicks divided by the total impressions, multiplied by 100. 

Landing Page: The web page that you want your target audience to "land" on after they clicking on a specific link or ad.

Conversion: The desired action you want people to take as a result of your ad. This could be a sale, email sign up, download etc.

Cost-Per-Click (CPC): The amount you pay for each click on your ad. CPC equals to the total cost of advertising divided by the total number of clicks that your ad received.

Earnings-Per-Click (EPC): The amount of revenue you generate per click on your ad. EPC equals to the total revenue divided by the total number of clicks that your ad received.

Cost-Per-Thousand Impression (CPM): The amount you pay for every 1,000 times your ad is loaded on a web page. CPM equals to the total cost of advertising divided per every 1,000 impressions.

Lifetime Customer Value (LCV): The amount of revenue you generate in a lifetime or an extended period of time with your customer or lead. LCV equals the total revenue generated in a lifetime divided by the number of customers or leads.

Cost-Per-Acquisition (CPA): The amount you pay to acquire a sale. CPA equals to total cost of advertising divided by the total number of sales as a result of the advertising. 

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