Act of GodAn act beyond human control, such as lightning, a flood or an earthquake. You usually see this (or Force Majeure) in a contract or insurance agreement. It's used in instances where things are totally out of human hands, meaning it would be unfair to be penalised for.
Articulated trailerA type of lorry with a separate "tractor" where the driver sits and a "trailer" where the freight sits. The trailer is attached to the tractor and that makes it easier to turn corners. Sometimes known as an artic, but be careful not to call it an Arctic...
Available-to-promiseATPAn availability calculation - it takes the stock available in your warehouse and deducts scheduled future orders from it, leaving you with the stock available to promise to new customers if they come forward. The calculation can be more complicated than this, taking daily average expectations into account, but the concept remains the same.
Average Selling PriceASPThe average price that a retailer sells a product for over a period of time. It takes into account your promotional periods and store level pricing, so it's usually lower than your RRP.
Average weight of purchaseAWPThe average weight (or volume) of your product being purchased by customers. For example, if you have a single serve 40g pack, it's likely that the AWP is around 50g, accounting for some people to purchase multiple packs. If you then brought out a 160g multipack, the AWP would likely increase considerably to 100g. It tends to be talked about in the overall category you‰'re in, rather than specifically about your brand, and along with frequency and penetration, it forms the ‰"holy trinity‰" of how shoppers buy in your category.
Backflush methodA way of issuing materials into production, it's most popular in very high volume factories or just-in-time types and it's largely for accounting and system input purposes. The idea is that, rather than issuing 10 litres of coconut water, 10 bottles and 10 lids and then using them to create your 10 completed bottles, you input your 10 complete bottles into the system and it back-calculates from the bill-of-materials what inventory was required to make that happen and deducts it. You would also report scrap at the same time to account for wastage and so that your inventory levels are realistic.
BackhaulWhen transporting takes place on the return journey from another delivery. For example, the normal delivery would be going from your warehouse to Waitrose - the backhaul journey would be pick something up near Waitrose and taking it back towards your warehouse so it's not a totally empty load on the way home. It optimises the driver's journey and therefore rates on backhaul are cheaper (although they're obviously less time reliable).
BackorderA specific quantity of a specific item that could not be filled on the requested date. For example if your customer asked for 50 units and you only sent 10, there would be 40 on backorder. Most brands don't use a backorder system - instead they would ask the customer to raise a new PO for the later date to deliver the final 40.
BIC codeAlso known as a SWIFT code - it's your bank identity internationally (BIC stands for Bank Identifier Code). It's specific to the bank, not the bank account so Natwest is the same everywhere, for example.
Bill of MaterialsBOMBasic list of materials and costs to build a product - usually made up of layers. For example, for a pack of crisps: the finished goods are a box of crisps - the first layer is potato, oil, seasoning, bag, box; the second layer is all the ingredients that make up the seasoning.
Bonded WarehouseA warehouse which has been allowed by Customs to hold onto your product without needing to pay duty until you take the products out of the warehouse. So if you're doing any manufacturing in the warehouse, you can defer your duty.
Business continuity planBCPUsually a physical document which explains all the risks within your business and your measures in place to ensure business continuity. Often a prerequisite to certain levels of insurance - basically showing you're not irresponsible.
Business to BusinessB2BWhen a transaction has businesses on both sides of it - for example a business selling to another business (for example a wholesaler). Different to B2C which is when a business sells directly to a consumer (for example a shop).
Buy-in dateIf you launch into a retailer you will have an on-shelf/launch date of, say 17th February. You will also be given a buy-in date, usually several weeks earlier. This is the date they will actually need the stock in their warehouse to ensure it's on the shelf and setup properly in time for the 17th February.
Buy-in volumesThe volumes that the retailer will expect delivered to their warehouses on the buy-in date. Also known as pipefill. It will usually be more than the usual weekly replenishment orders because they will need to stock all the shelves to start with. A good rule of thumb for an ambient product is two to three cases per store.
Cash marginThe profit margin in value terms, rather than percentage terms. For example, if you buy something at 70p and sell at å£1, the cash margin is 30p.
Category captainA brand that has taken the role of being the go-to category advisor for a given retailer. This role comes with it the assumption that this brand knows the most about the category and its direction.
Category managementA business function that larger FMCG brands have. It involves looking at data and insights and taking a view on the direction of the category. It's usually expected to be independent and very much consumer focused - not about the brand. Larger brands and retailers work together to look at data that shows how shoppers are behaving across the whole category, and that will influence how much space is allocated to each type of product, how promotions are managed, where the products sit in store, etc. Successful category management will lead to significantly more buyers coming into the category because they create what people want.
Certificate of AnalysisA certificate showing that your product has been made to specification - usually including microbiological or other tests on a batch level. These are often required for international movement of food & drink to demonstrate that a lab has certified them clean of bad stuff before going into another country.
Certificate of ManufactureA statement that goods have been manufactured on your behalf but are ultimately yours to use and sell.
Certificate of OriginA certificate signed by your exporter (and usually also chamber of commerce) which basically says that the product is largely from that export country.
Check digitThe last digit of a barcode and is there to verify that the rest of the barcode makes sense as a number. There is a mathematical equation used to get to the check digit, which you can use to work it out yourself if you don't fancy using the GS1 calculator.
CHEPA pallet-providing institution - famous for their blue pallets. It's the most universally accepted pallet provider in the UK and is considered best because it's effectively a pass-it-on ownership/rental service. When you deliver your product in to a depot on your CHEPs, their movements will be recorded and CHEP will go to the final destination and collect all the pallets there to feed back through the system again. If any pallets traceability gets lost, then you will have to pay for the pallet on your account so it is worth working with a reputable partner to manage your CHEP account - usually this will be your logistics provider.
Co-packingA third party that you pay to fulfil packing duties on your behalf. For example, a drinks company might pay a third party to put the liquid into bottles, a tea company might pay someone to put the leaves into a bag.
ConsignmentAnother word for an order when you're talking logistics. It's usually used by couriers to refer to a drop to a specific location (i.e an order).
Consolidated warehouseA type of warehouse that has a number of brands inside and makes shipments from a mixture of the brands to ensure they're as economical as possible. Most warehouses work in this way these days - so your brand might be going to Waitrose with some drinks, sweets and crisps who are also stored in your warehouse.
Consumer packaged goodsCPGAnother word for FMCG
Consumer UnitThe unit as sold by the retailer to the consumer - basically anything that can scan throught the till. For example, a 6pack of cola is one consumer unit, as is a single can of cola that you take from the fridge.
ContainerThe biggest unit of transport - the thing that goes on cargo ships but also goes on the back of lorries or even in air freight. They're usually made of metal and will most likely be 20ft or 40ft. Some brands are even using containers as their office space these days... so trendy.
Corner postsStrong cardboard based brackets that go on the corners of the pallet. They protect it from crushing and act as a strengthener for the pallet.
Cost & FreightCFR or C&FA sale term that means the seller is going to sort out the costs and freight necessary to bring the goods into port. This means that risk remains with them during transit to port and also that export requirements are managed by them. It all transfers to the buyer when the goods are in port. It's a great option for early stage brands as it takes a load off their mind.
Cost of Goods SoldCOGsThis is the total cost of the product being sold, including any licenses, royalties, taxes or duties paid to get the product to finished goods. You would hope this comes down over time as your volumes increase.
Cost To ServeCTSAll of the variable costs associated with selling through a retail account. This includes LOGS costs and also any rebates on payment terms and other payments going out.
Country of ExportThe country that the goods are shipped from.
Country of OriginThe country where merchandise was grown or manufactured, not necessarily the country of export. For example, if the coffee field is in Nicaragua, the country of origin is Nicaragua.
Cross-DockWhen you unload product from one truck and and then load into another trailer, with no warehousing in between.
Customer marketingA team that often exists in larger brands - these people are responsible for working with specific major retailers on what types of promotions to run and when, advertising in retailer magazines, analysing data from loyalty card schemes. They have a much more collaborative relationship with the retailers, somewhat independent of sales (in a similar way to category management).
Customer Relationship ManagementCRMUsed in the context of systems, the most ubiquitous one being Salesforce. The purpose of a CRM is to keep track of your customer relationships including contact details, sales pipelines, touchpoint notes etc. They're really useful but can be done on excel for a while as a young brand.
Declared valueValue of shipment assigned by the shipper and documented on the Bill of Lading. This is used to work out taxes and duties.
DemurrageA fee you pay when you exceed the allocated free time allowed for loading or unloading your product in a depot or at a port. For example, it may say on terms demurrage of å£50 per hour.
DerogationA term which refers to going off contract for something. It's used to refer to instances where you have short-dated stock. You might usually supply a retailer with 12 month's shelf life but have some nine month stuff to clear. You could say to the buyer "Would it be possible to derogate for this delivery and send you shorter dated stock? Based on our rate of sale we think this will run through your stores anyway within two weeks, so the nine months should be ample," and they might say "Yes fine please find attached a derogation form - please input all information about the stock into this and we'll sign". This form then overrides your contract for that delivery.
Dots Per InchDPIA printing term which refers to the resolution (a bit like pixels). The more dots of colour you have in an inch of space, the more you can make things look high definition.
DownstreamWhen you're talking about a supply chain, upstream means closer to source and downstream means closer to consumer. So downstream of the factory is every supply chain touchpoint that happens after production: e.g warehousing, logistics, store depots etc.
EA (each)The consumer smallest unit that the product can be broken down into without interrupting with the product itself. Sometimes it is the same as a retail unit but sometimes it is even smaller. For example, a bag of crisps is an each and a retail unit however for a bunch of bananas, the retail unit is the bunch whereas the each is the single banana. Or, for a 6-pack of Coca Cola, you the consumer unit is the 6-pack but the each is the single can.
EAN-13A type of barcode which is the standard consumer unit barcode that you see on most products - it is 13 digits.
EAN-8Like an EAN-13 barcode but is for smaller consumer units where 13 digits cannot fit - so they use eight digits instead
Electronic Data IntegrationEDIA way for computers to talk to eachother and send eachother messages - no different to email. It's a very standard way for one software to receive information from another software - connecting your systems via EDI makes them a lot more efficient and minimises manual intervention. All multiples use EDI but wholesalers rarely do.
Emergency product withdrawalEPWAnother word for product recall - it's when your product is deemed to be dangerous or risky from a public health perspective and you carry out a withdrawal from the stores you're in. They are usually very costly and are the reason we'd always recommend getting product recall insurance.
End of monthEOMUsed in finance to refer to payment being due at the end of the month after which the number of days have lapsed. It makes everyone's lives easier because money comes in and goes out at the end of the month. If they ask for 60 day payment terms, and you want 30 days, you could compromise on 30 days EOM which is effectively 45 days average.
Enterprise resource planningERPThe mammoth piece of software for any big business - it will pretty much do everything you need and is very expensive. What sets ERPs apart from other types of software is that they span the whole business so will include accounting, finance, operations / order processing, marketing forecasts, sales pipelines, purchasing, inventory management and even HR. So they become the centre of all your business needs. SAP is the most famous example of an ERP system.
Environmental Health OfficerEHOSomeone that works for the council and is always looking out for the public interest when it comes to health. They will be the ones prosecuting you when you're non-compliant. Outside London councils, this role is usually done by Trading Standards Officers (TSO)
Everyday Low PriceEDLPA retailer policy of ‰ÛÏno promotions" and having the same price every day. This is a new strategy that Tesco are employing as they've come under fire for their steep promotions driving wasteful purchasing habits.
Ex-worksEXWThis means direct from factory - it's used in pricing of goods where the factory says 20p ex-works - i.e. 20p if you pick it up from our factory gate. You might use the same logic for international distribution - if you don't want to have to deal with transit internationally, you could say to the distributor it's 50p ex works (i.e. 50p if you come and collect it from us and logistics is your problem).
FactoringA process in finance to help with cashflow. The logic behind it is that you sell your invoices receivable at a discount, therefore getting the cash now instead of when that invoice is due (in, say, 30 days). You pay a small % to do so but it really helps with cashflow and is very common among small businesses.
Fast moving consumer goodsFMCGAll consumer goods that move quickly off the shelves (unlike TVs) - it can include food and drink but also things like shampoo and deoderant. They are usually relatively low value high volume items.
First-in-First-OutFIFOIn warehousing, describes the method of rotating inventory to use oldest product first. This is always the default in F&B because you want to sell the short dated before the long dated. It is also an accountancy stock valuation methodology.
FlexographicSometimes called Flexo. This printing methodology is similar to Roto Gravure - the only difference is that the cylinders are usually rubber and are more like stamps - instead of engraving them, they have the pattern raised in the rubber so it dips in ink and literally stamps the ink onto the packaging. It's probably the cheapest method of printing but the quality has historically been much worse than Roto Gravure - you'd never do photos with flexo printing. Now there are things like Flexo HD and other types which actually have very good printing quality and are well priced.
FOBWhen the title of the goods passes from the seller to the buyer.
Food Standards AgencyFSAThe agency in the UK responsible for ensuring food safety.
Force MajeureAn act beyond human control, such as lightning, flood or earthquake. You usually see this in a contract or insurance agreement to provide in instances where things are totally out of human hands, and therefore would be deemed unfair to penalise for.
Four P's4PSet of tools to consider in marketing strategy to get the offering right for the consumer. The four P's are product (is the product what they want?), price (is it priced correctly versus expectations and alternatives?), place (where is it best positioned in store? and which stores?) and promotion (how can we make the consumer hear of us?).
Free of chargeFOCFree of charge!
Free or Freight on BoardFOBWhen the buyer takes risk of the goods when it boards the vessel. The seller is just responsible for getting it onto that vessel.
FreightThe word you use to refer to goods being transported. For example, air freight means goods moving via air; ocean freight - you guessed it - means moving goods by ocean. The freight is the goods.
Freight ForwarderThey're basically just international logistics companies. If you tell them you need to get goods from Country A to Country B, they will find out the best deals at the moment (attaching a margin) and organise everything including paperwork, duties and certification. We love them because, while they cost more, they just take out a huge amount of hassle which costs the business more in time.
Frequency of purchaseHow often your average consumer buys your product. It's usually written monthly (for example, four times per month). This is usually analysed alongside penetration to establish breadth and depth of reach.
FSDUFree Standing Display Unit. They are those things you see in shops that are like branded shelves forming additional spacing. So, for example, Bear Nibbles might have an FSDU in the fruit section to make it stand out.
Fuel SurchargeUsually something you see in a distribution/logistics contract pricing arrangement. As diesel prices are always changing, the fuel surcharge is an adjustment that they apply to your price depending on the price of diesel in that given week. For example, they might say your base diesel rate is 100p. If it goes up to 112p, you'll be paying a 12% surcharge on your diesel pricing. Similarly, if it's lower than 100p, you would expect a rebate.
FulfillmentOften used interchangeably with pick & pack. A fulfillment partner will be similar to your logistics partners but they will usually be managing your product on a smaller scale - ie fulfilling an ecommerce order by picking lots of individual products and putting them into a delivery together. Or sending out sample cases to your customers.
Full Container LoadFCLWhen your product fills a given container either by bulk or maximum weight. It's the biggest unit of deliveries - smallest to largest: each, unit, case, pallet, FCL.
Gondola EndThe shelves at the end of the aisle. Being placed there can increase your sales by 3x or more, so it's a great bit of secondary spacing. It's usually reserved for things on promotion.
Gross ProfitBasic list of materials and costs to build a product - usually made up of layers. For example, for a pack of crisps: the finished goods are a box of crisps - the first layer is potato, oil, seasoning, bag, box; the second layer is all the ingredients that make up the seasoning.
GroupageA type of service that means your products are shipped with other brands products - therefore sharing the cost of the shipment between you. It's always cheaper than a dedicated service, however, it means you are at risk of delays from previous drops where other brands are delivered first.
HS Tariff codeHS stands for Harmonised System, an international code referring to the commodity that you're selling. It's used to build legislation and duties around - so certain codes will have certain taxes. You will have a different import and export tariff code - see here https://www.gov.uk/trade-tariff/sections for the list. Often also called Commodity Code.
Inbound LogisticsThe process of moving product or raw materials into your process. For example into a manufacturing facility or warehouse - where you're managing it inbound.
IncrementalityProbably not a legitimate word in the English language but the concept is incredibly important particularly when talking to buyers. It's a measure of the sales you bring to the category above and beyond what would have existed anyway. It comes from bringing new types of customers into the category. For example, if a juice company is not incremental, it would go onto the shelves and just take sales from other juice brands - so the supermarket gets no additional sales as consumers are switching from one brand to another. If it's highly incremental, it would bring people into juicing that weren't previously juicing - new sales! If you do this, you're adding to the revenue of the category and demonstrating you can do this is all a buyer wants.
IndependentA one-off store or a store that is independently owned - for example a corner shop or local pub.
InvoiceA document showing money owed.
Just-in-TimeJITThis type of inventory management means suppliers deliver materials just before their use in the manufacturing process so there is no need to pay for much storage.
Key performance indicatorKPIAnother word for a measure or statistic that you might use to monitor the performance of something. For example, you could create a KPI for yourself which is how many times you turn up to work on time. Create a target (100%) and monitor your performance. They are used in all businesses to see how well they're doing. Revenue is an obvious one but less obvious ones exist, for example, brand awareness.
Landed CostA cost that includes the cost price of the goods plus transportation costs, import fees, taxes, duties and any other costs that came of getting those goods where you needed them. It's important to use landed costs to compare like with like when looking at suppliers.
Last-in-First-OutLIFOIn warehousing, this describes the method for using the newest inventory first - it's rarely used but might be when versions are involved. For example, if a new version of a TV comes out, they will pick the newer stuff before the old version because the old version is now defunct. In accounting, it's a term used to describe an inventory costing method.
Layer padsCardboard sheets the same size as a pallet (1m x 1.2m). They're used between layers when shipping heavier items because they help to redistribute weight within the pallet. You can even get special layer pads and machines that make picking by the layer really quick and easy to reduce picking costs.
Lead timeThe time between when you ask for something and when you get it. When you book an Uber, the lead time is probably roughly four minutes before you get your cab. So if you want new packaging, the lead time will probably be something like six weeks from the point that you send the provider designs (don't quote us on the number, more the concept!)
Logistics costs of goods soldLOGSAll the logistics costs involved in getting your product to the end customer. Different brands calculate this differently but we do it as the cost from your warehouse to the depot of your customer (including any outbound charges, picking charges etc.). If you want to calculate it more simply, just do the delivery charge and take the rest of the costs as your logistics/warehousing overheads.
ManifestDocument that lists the product on the trailer. It's used sometimes in UK but a lot in USA. You would present it to the people in customs, for example, to show whats in the back of your lorry and for them to check against.
MarginThe percentage of profit made on a sale. The formula is simple: (sales price-cost price)/(sales price). E.g. Selling for å£10 something that costs you å£9. Your profit is å£1 and your profit margin is (1/10) = 10%
Metric TonMT1000kg
Minimum life on receiptMLORThe minimum life you have promised to your customer at the point they receive it into their depot. It's usually around 75-80% of the full manufactured shelf life. So if you have a shelf life of 12 months, the MLOR is likely going to be nine months. If you deliver the retailed product below the MLOR (without derogation), it's likely they'll reject it.
Minimum order quantityMOQThe minimum volume of product you are able to order in any one go. This is used, for example, when purchasing from a manufacturer and you need to produce at least one tonne of product to make it worth their while, or it's what you impose on your customers to say they are not allowed to order less than one case at a time... you want your MOQs as low as possible on buy-side and as high as possible on sell-side.
MultipleA large chain of stores (e.g Tesco or Sainsburys) - there's no official list of what counts as a multiple but you'd usually hear it used to refer to the supermarkets.
Net ProfitEvery brand takes this to mean something different (usually dictated by their accountant's opinion) but, for us, this means profit on the order, net of any promotional costs, rebates or other investments.
New product developmentNPDThe process of bringing new products to the market, from concept creation to post-launch review.
Non-conformanceA type of notification that you get from a retailer or wholesaler when you're naughty. Often they come from delivering the wrong product, late or early deliveries, wrong or damaged pallets, incorrect paperwork or other errors in your order. Often non-conformances come with a charge ranging from å£30-250 so it's important you know the risks and avoid them!
On-time-in-fullOTIFA measure used in supply chain to represent the overall success of the supply chain in doing it's job: delivering the right thing at the right time. It's broken down into on time (.was the product delivered when it was asked for?) and in full (ie did they get everything they wanted?).
On-TradeThe sector of pubs and bars.
Out of stockOOSProduct that is requested by a customer but is temporarily unavailable. Also referred to as a stock out.
OutersAnother word for cases that your product is packed into. Can also be called cartons.
OverriderA commercial mechanism used by buyers to benefit from growth. They might say "Ok I'll pay you 50p per unit but if I buy more than 500,000 units from you, I will want any units purchased above that amount to be 40p because I'm giving you so much money at this point. It's not quite a straight rebate - it's usually stepped in multiple layers. You can also apply this logic when you're buying product from your manufacturer.
PalletIn it's simplest form, a wooden platform on which anything can be stored, stacked or moved. It's the thing you see forklifts lifting. However, the term can also be used to refer to a unit of measure of product - it represents the number of cases you can fit on that pallet. e.g a pallet of drinks might be 50 boxes worth of drink (the amount which fill the pallet based on their size and weight) so your POs might say three pallets please (150 cases).
Payment TermsThe length of time and discount established by the purchase order to pay for goods or services. It's either a simple day count (e.g 30 days from invoice date) or involves the end of the month (e.g 30 days end of month). This means the end of the month after 30 days have passed (eg. 15th October invoice would be due 30th November).
PenetrationThe % of the total available households are buying your brand or are buying from your category (for example, the penetration of teabags is 95% - i.e. 95% of households buy teabags; the penetration of Teabrand might be 20% ie 20% of households are buying Teabrand).
Pick-and-PackThe process of picking goods against customers' orders and then packeding them for onward distribution. For example at scale, it is normal to have a pick and pack partner for e-commerce where for each order, an individual (or machine) needs to pick the relavent items and pack them for delivery.
PickingProcess of selecting product from storage for filling an order. It literally just means finding the right product and taking it off the shelf.
Point of SalePOSTypically refers to materials, brochures, signs, posters, shelf talkers. Can also be used to refer to the point of sale ie the till point itself.
Price marked packPMPA pack that has been marked with the RRP or price on it. You see it a lot in the convenience sector where cans have printed onto the can "å£0.59" or where Kitkats have a price on their multipack. Customers in convenience are proven to much prefer buying PMP because it gives them comfort that the price has not been artificially inflated by the store manager.
Profit and Loss StatementP&LA financial report which shows the profit or loss of a business or project, taking into account revenue and expenditures. For example, operations, you might have a project P&L where it costs you to stack a pallet higher but you save in distribution and storage costs so your P&L comes out with a net gain (profit).
Profit on returnPORProfit on return is a very common acronym in cash and carries - it refers to the profit / margin the independent shop will be making on your product based on their purchase price and sale price. ie if they buy a price marked pack at å£1 and it is marked å£1.50, their POR will be 33%
Proof of DeliveryPODA document signed at the point of delivery and shows what was on the delivery, the name of the person that signed for it, and the time and date of the delivery. It's used to prove that the delivery was successful, useful when it comes to disputes.
Purchase OrderA type of document containing a purchase request, i.e. an order for goods or services. So PO #250 might be a document sent to your orders email for 200 cases of your product to go to Tesco on the 4th March at 19:00. Then when you have made the delivery, you would send them an invoice which is basically "We've delivered PO #250 as you requested - here is the amount you owe us for this"
Range review dates & periodsSpecific dates that retailers work to make changes to their range. It's often twice per year that the range will be reviewed, different for each retailer and often even category within the retailer. The buyer will very rarely make changes to their range outside of these windows so make sure you know them, otherwise you might have to wait another six or 12 months to see your product on shelves.
Rate of saleROSThe number of units or the £ value sold in an average store in a given week. It's the best measure of how quickly products your products sell once in store. The maths is simple to work it out - if you sell 200 units across your 10 Waitrose stores in a given week, your ROS is 20 (you may want to further break this out to say your London ROS is 30). However, it's all totally nominal in isolation - it's only interesting when you compare with other brands in the same category. For exampe, if your ROS is 20 and your biggest competitor's is 10 then you are working the shelf twice as hard as them. This is what buyers are desperate for. Ne careful to look at ROS in £ and in units because a cheaper product will likely sell more units but might not be making more money
RebateMoney refunded on the invoice value. Rebates come in many shapes and sizes, for example, it could be you charging the retailer x% less because of a promotion, or the retailer asking for a 2% off invoice value if they pay the invoice early, or you asking for a kick-back from your manufacturer if you order more than x pallets worth. It's always worth thinking about your money including the rebate because otherwise you have a false sense of value.
Recommended retail price/recommended selling priceRRP/RSPRecommended retail price / recommended selling price - essentially the same thing. This is the price that you as a supplier recommend should be spent on your product. You have to be careful with RRP due to competition law - you cannot tell buyers what price to put your product at - rather you can say things like "in line with the rest of your premium jams".
RemittanceThis is a document that closes the invoice chain of documents. Starts with a PO ("please can we order this"), then there's a POD ("Delivery has been made successfully"), then there's an invoice ("Now you have your products please can you pay us?") and finally there's a remittance advice ("Yes I paid you yesterday for invoice number 123 and 124"). They're critical for your bank reconciliation because you might get 10 payments from a customer per week - you need to know which payment was for which invoice(s).
RetrofundA type of promotional mechanism which means refunding the promotional rebate based on sales. For example, if you agree 50p off per unit, and the retailer ends up selling 3,000 units, they would retrofund the å£1,500. It is different from a normal rebate because normal rebates are usually based on a time period or what the customer has bought in that period (rather than what they have sold on). This type of funding is most common with major multiples.
Return on investmentROIA way of measuring for every £1 you spend on something, how much you get back. For example, if a £25k billboard campaign increases your sales by £50k, your ROI is two.
RevenueThe money made from a sale. It's normal to make this net revenue by taking off any overriders, rebates or promotionals that may have artificially inflated the revenue figure.
RH&DThis stands for Receipt, Handling and Despatch. It's a totally normal cost in a warehouse contract - representing the time it takes to take the goods off the lorry and put away in the warehouse and then, when they're needed for an order, to take them back off the racking and load into a lorry again.
Roto gravureA print production method commonly used in flexible materials. It uses metal "cylinders" and engraves your design onto the cylinder. The cylinder is then rolled in ink and then over your packaging and effectively does the opposite of a stamp and prints your design onto the packaging. Outside of digital printing methods (which are astronomical at volume), roto gravure has the highest print quality so is great for photography, but you definitrly pay for it.
Serial Shipping Container CodeSSCCUsed for pallet referencing in the way a barcode is used on smaller units. It has more information embedded into it - the 18 digits includes an extension digit, GS1 Company Prefix, Serial Reference, and Check Digit.
Service Level AgreementSLAA contract between a service provider and the customer that stipulates and commits the service provider to a required level of service
Shelf-ready packagingSRPOuters‰ (the boxes your products are in) that are specially designed for storage on shelf. They usually have perforations which make it super quick and easy for the shelf stackers to tear open and put on shelf, without having to take each product out. If you walk down the aisles, you will notice that most products are in trays of sorts - this was once an SRP box which has since had the top half ripped off.
Short datedStock that's below it's minimum life - not necessarily gone bad but just below what you've agreed with your customers - usually 75% of shelf life.
Shrink wrapThe cling film type plastic that you wrap pallets with in order to keep the boxes together.
Stock keeping unitSKURefers to each separate product you have in your range (usually demonstrated by different barcodes) - for example, you might have the following different but similar SKUs: cheese and onion 40g, cheese and onion 40g price-marked, cheese and onion 40g Arabic language, salt and vinegar 40g... it's pronounced SKEW.
Stock OutsOOSWhen you run out of stock and are asked by customers for some but don't have it. Worst feeling ever.
Tender documentA document that you send out asking suppliers to bid for your business, usually be a short presentation to say you're looking for. For example, for a box supplier you would say these are the specs, these are the must-haves and then you invite them to give you quotes and tell you why they're great for it.
Tesco Product NumberTPNTesco talk about products in TPNs rather than barcode or product name - don't bother enquiring about anything on a store level without knowing your TPNs. The buyer will have given them to you when you got set up on the system but you could always get them from Tesco Link or ask.
ThroughputThe rate at which a machine produces. For example throughput could be 20 bags per minute or 500 bottles per hour. It will be different for different recipes and SKUs.
Trading standards officerTSOUsually used outside of London to refer to the people responsible for overseeing trading standards and upholding the regulation. They're scary - we recommend you befriend your local one and then hope you don't hear from them again.
Transit TimeThe time between a shipment of a product and it's delivery i.e the total amount of time it is in transit.
TrappingA term used in printing to refer to the shadows that appear around objects as a result of natural movement that takes place when printing different colours. For example the CMYK printing method might find the C has shifted 1mm from the K and therefore there is a slight part where there is C but no K. This creates trapping.
TurnkeyThis is the idea of buying something ready made and ready-to-go. E.g a turnkey agreement with the factory means they sell it to you ready to sell on. All you have to do is "turn the key". This compares with purchasing all the separate materials in a more fragmented way.
UpstreamThe direction in a supply chain opposite to the flow of materials. For example, from the manufacturer, upstream means up to the raw materials suppliers
Value Added TaxVATA tax of 20% in the UK on certain goods and services.
VolumetricA term used in distribution to refer to the price being based not just on the weight but on a calculation taking into account weight and volume because a giant marshmallow might only way 1kg but it could take up the entire trailer so they need to take this into account in pricing. If you are a light product, you should check if your couriers prices volumetrically - most of them do.
Warehouse Management SystemWMSComputer software designed specifically for managing stock in a warehouse. You want to be sure anyone you work with has a proper WMS system, otherwise they won't be able to manage your stock effectively. WMS usually covers everything from stock receipt and booking in, to storage, stock rotation, stock picking and stock dispatch. Basically the whole chain.
When it's gone it's goneWIGIGA type of promotion that clears stock and then when it is cleared, the promotion ends. Very useful method for short dated clearances or end of season goods.
WholesalerSometimes called distributors, they buy products and sell them on to many other accounts. For example, a wholesaler will buy a large number (say, 500) of cases from you, and then sell a case of each to 500 smaller stores. They can therefore negotiate cheaper prices with you and take a cut when they sell them on. Going through wholesalers will get you a lot further than trying to go direct to stores.
Work-in-ProcessWIPInventory that is work-in-progress - i.e. not completed. It could be used to describe, for example, packaging which has labels stuck onto it but hasn't yet been filled - or a drink that hasn't yet been bottled.
Year On YearYOYe.g 15% YOY means 15% growth between the two years in comparison.
Year To DateYTDThe year up until today, i.e. 1st January to today.