Stock terms, in plain English

Carriage / delivered price

The cost of a product including the supplier’s delivery charge. Always compare wholesalers on the delivered price, not the list price — "free delivery over £250" is a price, just a hidden one.

Cost price

What you pay the supplier for one unit, excluding VAT you can reclaim. Every margin calculation starts here, which is why keeping cost prices up to date matters more than almost any other admin job in the shop.

Dead stock

Products that haven’t sold in weeks or months but still occupy shelf space and tied-up cash. The cruel part: it looks tidy. A full shelf of slow movers feels like a stocked shop and behaves like a savings account paying negative interest.

EPOS

Electronic Point of Sale — your till system (Square, Zettle, Lightspeed, EPOS Now and others). Modern EPOS records every sale digitally, which is what makes live stock tracking possible without manual counting.

Facing

One visible product front on the shelf. Giving a line two facings instead of one is a real decision: it sells more of that line at the cost of whatever lost the space.

FIFO (first in, first out)

Rotating stock so the oldest items sell first — new delivery goes behind the existing stock, not in front. The single cheapest waste-reduction technique in retail.

Gross margin

Profit as a percentage of the selling price (ex VAT). Sell at £1.00 ex-VAT with a 65p cost and your margin is 35%. Suppliers often quote markup instead, which uses cost as the base and sounds bigger — know which one you’re being told.

Lead time

The days between placing an order and the stock arriving on your shelf. Reorder points exist because of lead time: you order before you run out by exactly this much warning.

Line

One distinct product in your range — "Coke Zero 500ml" is a line; the cola category might hold twenty. Range reviews are decisions about lines: which earn their facing and which don’t.

List price

The supplier’s standard price before any discounts, promotions, or retro deals. Your real buying price is often lower — track what you actually pay, not the list.

Markup

Profit as a percentage of cost price. A 65p cost sold at £1.00 ex-VAT is a 54% markup but a 35% margin — same money, different denominator. Accountants and banks talk margin; many wholesalers talk markup.

Minimum stock level

The quantity at which a product should trigger a reorder — also called the reorder point. Set it as daily sales × (lead time + a safety buffer), not as a guess.

Multipack / outer

The case quantity a wholesaler sells in — a 24-can tray, a 10-pack of crisps boxes. Stock systems must know whether you sell the outer or the single, or every count is wrong by a factor of the case size.

Price-marked pack (PMP)

A product printed with its selling price by the manufacturer (e.g. "£1.25" on the pack). PMPs reassure customers on value but cap your margin — you can’t reprice around a number printed on the packet.

Range review

A periodic decision about what to stock: which lines stay, which get delisted, what new lines take the space. Done with sales data it takes an hour; done by eye it mostly protects whatever’s been there longest.

Reorder point

See minimum stock level — the stock quantity at which you place the next order so the new delivery lands before the shelf empties.

Retro / retrospective discount

A supplier rebate paid after the fact for hitting a volume or display target. Real money, but invisible in shelf-edge margin maths — track it separately or you’ll misjudge lines.

Safety stock

Extra buffer above expected demand to cover late deliveries and surprise busy days. The cost of safety stock is cash and shelf space; the cost of none is empty shelves. Set it per line, not as one blanket rule.

Sell-through

The percentage of stock received that actually sells (rather than being wasted, stolen, or marked down). Seasonal and short-dated lines live or die by sell-through.

Shelf-edge label (SEL)

The price ticket on the shelf strip under each facing. Legally and commercially important: unpriced stock sells worse, and stale labels after a reprice cause till disputes.

Shrinkage

The gap between the stock you should have and the stock you can count — theft, damage, waste, and till errors combined. UK convenience retail typically runs 1–2% of sales; the first step to reducing it is measuring it.

SKU

Stock Keeping Unit — a unique identifier for one product variant. "Blue Razz Ice 10mg" and "Blue Razz Ice 20mg" are different SKUs even though they’re one flavour. Barcodes usually serve as SKUs in small shops.

Stocktake

A physical count of what’s actually on the shelves, compared against what the records say. With till-synced stock software, the annual all-day stocktake becomes rolling spot-checks of a category at a time.

Stock turn

How many times per year you sell through your average stock holding. Higher is generally better — money tied up in slow stock is money not earning. Fresh categories turn weekly; hardware might turn twice a year.

VAT (in stock maths)

Value Added Tax — 20% standard, 5% reduced, 0% on most groceries. The golden rule of margin maths: the VAT in your shelf price was never your money, so margins are always calculated on the ex-VAT price.

Waste / wastage

Stock that leaves the shop without being sold at full price — out-of-date, damaged, or marked down. Measured weekly it’s a controllable cost; unmeasured it’s a quiet leak that compounds all year.

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