Glossary
Shopify and ecommerce terms, explained
Plain-language definitions of the terms behind our apps, with a straight answer first and links to the guides that go deeper.
AI product photography
AI product photography is the use of an AI image model to make product photos out of images you already own, most often by redrawing a flat-lay or ghost-mannequin garment onto a generated human model. It suits anything worn on a body and gives a catalogue a model image per product without a studio day. What it produces is a plausible garment rather than a measured one, which is why it belongs alongside real photography instead of replacing it.
Break-even ROAS
Break-even ROAS is the return on ad spend where a campaign stops making money. Divide 1 by the share of revenue you keep after every cost except the ad itself: keep 40 cents on the dollar and you break even at 2.5x, keep 20 cents and you need 5x. Above that line the order pays for its own advertising and leaves something over. Below it you are buying revenue at a price you cannot afford, and because margin differs by product, one store-wide ROAS target is too high for some campaigns and far too low for others.
Chargeback
A chargeback is a payment dispute: the cardholder asks their bank to reverse a charge, claiming fraud, an item not received, or a product not as described. For the merchant it is expensive on every axis - if the dispute is decided against you, you lose the disputed amount, pay a dispute fee on top, and the goods have usually shipped already. On Shopify, disputes through Shopify Payments appear in your admin with a deadline to respond.
Contribution margin
Contribution margin is what a sale leaves after the costs that move with it: the product, the payment fee, the shipping you absorb, the packaging, the discount and the ad spend that bought the order. Fixed costs such as rent, salaries and software stay out, because they do not change when one more order arrives. What is left is what that order contributes toward those fixed costs, and then toward profit. On a Shopify store it decides what you can pay for a click, whether a discount code still works, and whether a free shipping threshold pays for itself.
Cost of goods sold (COGS)
Cost of goods sold (COGS) is the direct cost of the products you actually sold: what you paid your supplier per unit, plus the per-unit cost of getting each one ready to ship. Rent, salaries, software and ad spend are real costs that sit outside COGS. On Shopify the number lives in the Cost per item field on each variant, and Shopify uses it for exactly one job: gross profit in its profit reports, calculated as net sales minus cost.
Customer lifetime value (CLV / LTV)
Customer lifetime value (CLV or LTV) is what a customer is worth to your store across all their orders, not just the first one. Most tools measure it in revenue or spend; the stricter version measures it in profit, after product costs, fees, shipping and returns, because a customer who orders often but only buys discounted, returned or thin-margin items can have a high revenue LTV and a poor real one.
Duplicate product images
Duplicate product images are the same or near-identical images used across multiple products, or repeated on a single product. They pad your media library, slow pages down, and weaken your image search results because Google keeps seeing the same picture. Finding them takes a scan that compares what the pictures look like, because the copies that cause the most trouble have been resized, re-saved or renamed along the way.
Gross profit
Gross profit is revenue minus the cost of the goods you sold, before any other expense comes out. Shopify calculates it for you as net sales minus cost of goods sold, where net sales is your sales after discounts and excludes tax, shipping, duties and fees. The catch is that Shopify only counts a sale in that calculation when the variant already had a Cost per item filled in at the moment it sold, so a store with gaps in its cost data reads a gross margin higher than the real one.
Image alt text
Image alt text is a short written description of a picture, typed into the box Shopify labels Alt text and read aloud by screen readers to shoppers who cannot see it. Search engines read the same description to work out what a photo shows, which is how product images end up in Google Images. On Shopify the description is saved to the image itself rather than to one page, so what you write once follows that photo everywhere it appears in your store.
Net profit
Net profit is what a store keeps after subtracting every cost from its revenue: product cost, payment fees, shipping, returns, taxes, ad spend and fixed costs. It is different from revenue, which is total sales, and from gross profit, which is sales minus product cost only. A store can have high revenue and still make no net profit.
Overselling
Overselling is accepting an order for units you do not have, so the money arrives and the shipment cannot follow. On Shopify it has two causes: nothing holds a unit during checkout, since stock only moves from Available to Committed when the order is created, so two people can buy the same last one. And the count itself is often wrong, usually a warehouse sync, a second sales channel, or a multi-location total counting stock your online store cannot ship from. Both are fixed the same way: stop selling a few units above zero rather than at zero.
Profit margin
Profit margin is profit expressed as a percentage of revenue, so a store that keeps $20 of a $100 sale has a 20% margin. Gross margin only subtracts the product cost; net margin subtracts every cost, including fees, shipping, returns, ads and overheads. Net margin is the honest one, because it is the share of each sale that actually reaches you.
QR code ticket
A QR code ticket is an event ticket printed with a QR code that stands for one named attendee. Scanning it opens a private check-in link on a staff phone, which finds that person on the guest list and marks them as arrived, so the ticket and the guest list entry are the same thing. Whether the same code can be scanned twice is a setting the organiser chooses, not something built into QR codes. The picture itself carries no name and no card details, only a long random code.
ROAS (return on ad spend)
ROAS, or return on ad spend, is revenue divided by ad spend: a 3x ROAS means $3 of revenue for every $1 spent. On its own it says nothing about profit, because that revenue still has to pay for the product, the fees, the shipping and the returns. A ROAS only becomes readable once you divide 1 by the share of revenue you keep before ad spend: keep 40 cents on the dollar and 3x is profitable, keep 25 cents and the same 3x loses money.
Safety stock
Safety stock is a buffer of inventory you keep in reserve so you do not sell out during a demand spike, a slow reorder, or the timing gaps that cause overselling. Your safety-stock level is the point at which you stop selling a product, rather than selling all the way to zero. Shopify does have a Safety stock bucket you can move units into by hand, which takes them out of Available, but it has no rule that holds a floor for you as stock moves.
Shop-by-brand page
A shop-by-brand page is one storefront page listing every brand a store carries, each entry linking to that brand's products. Most are alphabetical with a search box and a letter index, because the shopper who opens one already knows the name and is trying to stop scrolling. Shopify has no native version: the brand sits on each product in the vendor field, and the directory gets built from those values by a collection per brand, by a bit of hand-written theme code, or by an app that reads them for you.
Shopify product vendor
In Shopify, the vendor is the brand or manufacturer of a product, set in the product's Vendor field. Shopify uses it for filtering and for vendor-based automatic collections, but it does not create a customer-facing "shop by brand" page on its own. A brand-page app turns your vendors into a browsable directory.