Adult Shops Industry Terminology

ABC Analysis

An inventory categorization method that ranks SKUs by economic value or velocity (A = most important, C = least). Helps prioritize forecasting, stocking, and cycle counts.

We moved A‑class lubricants to daily cycle counts; Seasonal novelties dropped to C to free cash; Our A SKUs get higher safety stock

Address Verification Service (AVS)

A card‑not‑present fraud tool that compares the billing address provided at checkout with the card issuer’s records.

AVS mismatches on high‑ticket items trigger manual review; We tuned our AVS rules to reduce false declines; AVS + CVV checks lowered our chargebacks

Age Gate

A website or app checkpoint (e.g., date of birth confirmation) restricting access to users of legal age in the jurisdiction.

We implemented an age gate before showing product listings; The age gate varies by location for 18 or 21+; Our CMP logs age‑gate consent for audits

Age Verification

Processes and technologies (ID scanning, third‑party verification) to ensure buyers meet legal age requirements.

State laws now require robust age verification for adult sites; We use a vendor that verifies IDs without storing full PII; In‑store scanners verify IDs for regulated products

Average Order Value (AOV)

The average revenue per order, calculated as total revenue divided by number of orders; key for merchandising and promotions.

Bundles and add‑ons raised AOV by 12%; Free shipping thresholds increased AOV to $78; Cross‑selling cleaner with devices boosted AOV

Body-safe Materials

Non‑toxic, compliant materials suitable for intimate consumer products (e.g., medical‑grade silicone, ABS, stainless steel). Often tied to REACH/RoHS and phthalate‑free claims.

We prioritize body‑safe materials in buying guides; Packaging calls out medical‑grade silicone; Supplier declarations confirm body‑safe inputs

Buy Now, Pay Later (BNPL)

Installment payment options (e.g., Affirm, Klarna). Some providers restrict adult categories, so merchant eligibility matters.

We vetted BNPL partners that accept adult goods; BNPL lifted conversion on $150+ carts; Our checkout hides BNPL if the provider declines the category

Chargeback

A forced payment reversal initiated by the cardholder’s bank due to fraud, dissatisfaction, or processing errors.

Discreet descriptors reduced ‘not recognized’ chargebacks; We submit delivery proof in representments; High‑risk MCCs face stricter chargeback thresholds

Consent Management (Data Privacy)

Collecting, storing, and honoring user consent for cookies, email/SMS marketing, and data processing (GDPR/CCPA/TCPA).

Our CMP records granular tracking consent; We use double opt‑in for the newsletter; SMS flows include TCPA‑compliant opt‑outs

Conversion Rate (CVR)

The percentage of visitors who complete a desired action (e.g., purchase). A key metric for CRO across PDPs and checkout.

Simplifying the size guide improved CVR by 9%; One‑page checkout outperformed multi‑step; Trust badges and discreet shipping info boosted CVR

Cost of Goods Sold (COGS)

Direct costs of products sold (purchase price, inbound freight, duties). Used to calculate gross margin.

Including duties in COGS clarified true margins; Vendor discounts lowered COGS by 3%; We re‑costed private label to improve COGS

Customer Lifetime Value (CLV or LTV)

Projected net profit from a customer over their relationship with the brand. Guides retention and acquisition spend.

LTV:CAC target is 3:1; Subscription refills increased LTV; VIP tiers boosted repeat‑purchase LTV

Direct-to-Consumer (DTC)

Selling directly to end customers via owned channels (site, app, store) rather than only through distributors/marketplaces.

DTC margin beats wholesale; We use DTC to launch exclusive lines; DTC data informs product roadmap

Discreet Packaging

Plain, unbranded shipping and billing descriptors to protect customer privacy.

Labels omit product names; Billing shows a neutral company name; Customer service scripts explain discreet packaging

Dropshipping

Fulfilling orders directly from a supplier or distributor to the end customer without stocking inventory.

We drop‑ship oversized items from the vendor; SLAs require tracking within 24 hours; We audit packaging for discretion in drop‑ship orders

Electronic Data Interchange (EDI)

Standardized electronic exchange of business documents (purchase orders, ASNs, invoices) between trading partners.

EDI cut PO errors with distributors; ASNs improved receiving accuracy; We mapped EDI 850/856/810 with our ERP

European REACH/RoHS Compliance

Regulatory frameworks restricting hazardous substances (REACH) and certain electronics chemicals (RoHS) in the EU/UK.

We request REACH SVHC and RoHS declarations; Non‑compliant SKUs are blocked from EU; Compliance badges reassure customers

Fulfillment Service Level Agreement (SLA)

Target commitments for order processing, ship‑by times, accuracy, and delivery speed.

Our SLA is ship within 24 hours on weekdays; We track pick/pack accuracy at 99.7%; Peak season SLAs include cutoff times

Google Ads Adult Content Policy

Platform rules governing what adult‑related ads and creatives are allowed, restricted, or disallowed.

We tailored creatives to allowed categories; Geo‑targeting reflects local restrictions; Disapprovals dropped after policy training

Gross Margin vs Net Margin

Gross margin = (Sales − COGS)/Sales; Net margin considers all expenses. Both inform pricing and profitability.

Gross margin on private label is 65%; After ads and ops, net margin is 12%; Margin waterfalls highlight leakage

GS1/GTIN/UPC

Global barcode standards (GS1) and identifiers (GTIN/UPC) used for product tracking, listings, and retail readiness.

We purchased GS1 prefixes for new lines; Marketplaces require valid GTINs; Scannable UPCs speed POS checkout

High-Risk Merchant Account

Payment processing tailored for industries with elevated risk (adult categories). Often higher fees and stricter underwriting.

We were approved under a high‑risk processor; Rolling reserves apply to new merchants; Processor requires 3DS on cross‑border

HS Code Classification

Harmonized System tariff codes assigned to products for international trade, duties, and customs clearance.

We classified massagers under the correct HS code; Misclassification caused a customs hold; Landed cost varies by HS and destination

Importer of Record (IoR)

The party legally responsible for ensuring imported goods comply with regulations and for paying duties/taxes.

Our 3PL acts as IoR in the UK; Without an IoR, shipments were rejected; We set IoR policies for cross‑border returns

Ingress Protection (IP) Rating

Standard indicating dust/water resistance (e.g., IPX7). Relevant for devices customers may expect to be water resistant.

PDPs list IP ratings to set expectations; IPX7 enabled bath‑safe claims; Returns dropped after clarifying IP levels

Influencer Marketing Compliance (FTC Endorsement Guides)

Rules requiring clear, conspicuous disclosures (#ad) and truthful claims in sponsored content.

Creators used approved disclosures; We substantiated all performance claims; Compliance checks reduced takedowns

Inventory Turnover

How many times inventory is sold and replaced over a period; indicates stock efficiency.

Turn on A SKUs is 10x/year; Slow turns triggered markdowns; We improved turns by tightening assortments

Just-in-Time (JIT) Inventory

Strategy to receive goods close to the time they’re needed, reducing holding costs.

JIT cut backroom stock by 20%; Vendor reliability is key for JIT; We balanced JIT with safety stock on A SKUs

Keystone Pricing

A simple pricing rule of doubling the wholesale cost to set retail price; adapted based on category dynamics.

We keystone low‑ticket items; Premium devices exceed keystone; MAP may override keystone

Kitting and Bundling

Combining multiple SKUs into a single sellable unit for value or thematic merchandising.

Clean‑care bundles raised AOV; We pre‑kitted gift sets at the 3PL; Bundles require unique SKUs for inventory

Lead Time

Time from placing a purchase order to goods being received. Includes production and transit.

Ocean freight added 25 days to lead time; We extended forecasts for Lunar New Year; Long lead items get earlier POs

Loss Prevention and Shrink

Measures to reduce inventory loss from theft, damage, or errors; shrink is the percentage lost.

Locked cases for high‑value items; Cycle counts revealed receiving errors; Staff training reduced shrink to 1.2%

Merchandising Planogram

A schematic showing product placement on shelves/displays to optimize sales and compliance.

New planograms group by material and price; Eye‑level slots reserved for A SKUs; We A/B tested endcap planograms

Merchant Category Code (MCC)

Four‑digit code assigned by card networks to categorize a business; adult categories affect processing and ad policies.

Our MCC requires enhanced fraud tools; Some wallets decline our MCC; MCC impacted interchange rates

Minimum Advertised Price (MAP)

A policy from brands specifying the lowest price resellers may publicly advertise.

We built MAP monitoring alerts; Promo codes stay within MAP rules; Violations risk losing authorized status

Minimum Order Quantity (MOQ)

The smallest quantity a supplier will sell per order or per SKU.

MOQ for private label is 1,000 units; We negotiated lower MOQs for new colors; High MOQs affect cash and storage

Net Payment Terms (Net 30/60)

The period a buyer has to pay an invoice in full after the invoice date.

We secured Net 45 with our distributor; Early‑pay discounts beat financing costs; Late fees apply after Net 30

Obscenity Law and the Miller Test

Legal standard used in the U.S. to judge obscenity; guides what can be displayed/marketed publicly.

Counsel reviewed window displays under Miller; We tailored signage by municipality; Staff training covers content boundaries

Omnichannel Retail

Integrated shopping experience across online, mobile, and stores (inventory visibility, BOPIS, consistent pricing).

Store pickup drove repeat visits; Unified promos across channels boosted trust; Omnichannel returns increased conversions

Order Management System (OMS)

Software that orchestrates orders across channels, inventory, payments, and fulfillment.

OMS auto‑routes to closest warehouse; Split shipments handled via OMS; Pre‑orders managed with allocation rules

Payment Card Industry Data Security Standard (PCI DSS)

Security standard for handling cardholder data; requires controls to protect payment information.

We use a PCI‑compliant gateway with tokenization; Annual SAQ completed by IT; No card data stored on our servers

Phthalate-Free Claim

A marketing and compliance statement indicating products are made without certain plasticizers; must be truthful and substantiated.

COAs back our phthalate‑free claims; We avoid vague ‘non‑toxic’ language; Labels specify tested materials

Point of Sale (POS)

In‑store hardware/software to process transactions, manage inventory, and issue receipts.

POS hides sensitive product names on receipts; Omni‑POS syncs stock in near real time; Age checks enforced at POS

Private Label

Products manufactured by a third party and sold under the retailer’s brand.

Private label lifts margin by 15 pts; We own packaging and quality specs; DTC site features private label first

Product Liability Insurance

Coverage that protects against claims arising from product defects or harm.

Policy limits increased with new devices; Vendors must add us as additional insured; Certificates tracked in vendor onboarding

Quality Assurance/Quality Control (QA/QC)

Processes to ensure products meet spec and are defect‑free before sale.

AQL sampling at the factory; Incoming QC checks electrical safety; QC metrics tie to supplier scorecards

Return Merchandise Authorization (RMA)

A documented process to approve and track returns/replacements within policy constraints.

Defects require an RMA within 30 days; Intimate items have limited returnability for hygiene; RMA data feeds warranty analysis

Three-D Secure (3DS)

An authentication protocol (e.g., 3DS2) adding a verification step to reduce fraud and liability on online payments.

3DS cut cross‑border fraud by 40%; We trigger 3DS for high‑risk orders; Liability shift applied after 3DS success

User-Generated Content (UGC) Moderation

Policies and tools to review customer reviews, Q&A, and images for compliance with platform and legal standards.

Filters block explicit imagery in reviews; We moderate claims for accuracy; Clear guidelines keep UGC brand‑safe

Zoning Restrictions (Secondary Effects Doctrine)

Local rules governing where adult‑oriented businesses may operate, often requiring buffers from schools or residences.

We checked zoning before signing the lease; Signage size limited by local ordinance; Hours of operation set by permit