Wholesale Terms for Beginners -Part 1

When working with wholesalers for the very first time, you will most likely come across wholesale terms, abbreviations and acronyms that you aren’t familiar with. So in order to have a better relationship with your wholesale supplier, it’s best to understand what these terms mean. Yes, learn it before you ask the supplier for the definition! Plus, it will make you look more professional to the supplier.

So.. Net 30, MAP, FOB, MOQ, QOH..etc what do all of these things mean?

MAP – acronym for Minimum Advertised Price

MAP stands for “minimum advertised price”. That is the lowest possible price a product can legally be advertised for online and offline. When a wholesale supplier has a MAP policy in place, that is a legal document! It defines the lowest possible price you can advertise a product for. The policy also outlines the penalties for violating that minimum advertised price policy.

NOTE: Wholesale suppliers and brand owners do monitor what their retailers are doing when they have strict policies like these in place. So don’t violate them!

MSRP – stands for Manufacturer’s Suggested Retail Price

A MSRP is the price that the manufacturer suggests you sell the product for. These prices are figured out based on what the cost is to make the product and by research what the current market can handle.  The MSRP is intended to help you set price levels and is not mandatory.  Within reason, you can modify your price to compete with other sellers in your niche when you need to.

TIP: Don’t make the mistake of being the lowest price seller.  You will start a price war where everyone ends up with no profit margin left.  This way nobody wins.  If your Dealer Price List does not provide the MSRP, ask your supplier for a MSRP List.  The MSRP can be used as a quick method to see which products offer you better profit margins.

SKU – is short for Stock Keeping Unit

I’m sure you have heard this before, and you knew what it was, but you didn’t know what it stood for! Stock Keeping Unit “SKU“, as the name suggests, is a number (kind of like your social security number, but with letters too) that wholesalers assign to products to keep track of their stock levels. So when a supplier says they have 2000 products, they will usually in the industry say they have 2000 SKU’s.

NOTE: A product in different colors will have different SKU numbers. There will be one SKU for every color. SKUs are unique to each product description, not just the product itself. For example, a supplier could have mittens, they are all the same style and material, but they give you 3 color options. Each color option, will have it’s own SKU.

We here at WorldwideBrands.com have been communicating with wholesalers and retailers for over 20 years! We KNOW what these terms mean and ask our listed suppliers some of this information when researching them for a listing in our B2B Directory of Certified Wholesalers. Asking about MAP policies and what their SKU counts are, helps us to understand how big their business is, and what they require from their dealers.