Clothing Wholesalers Industry Terminology

ABC Analysis

A method of ranking SKUs by their contribution to sales or margin (often 80/20) to prioritize forecasting, replenishment, counting, and service levels.

Class A styles (top 20% of SKUs) get weekly forecast reviews and priority allocation.; Move C-class basics to make-to-order to lower holding costs.; Use ABC to set cycle count frequency: A daily, B weekly, C monthly.

Advance Ship Notice (ASN)

A pre-shipment EDI document (typically 856) that details what’s shipping (carton/pallet contents, quantities, barcodes) so the customer’s DC can plan and receive faster.

Send the 856 ASN by EDI before the truck departs.; The DC rejected the load because the ASN carton counts didn’t match.; ASN compliance improved our receiving speed by 30%.

Available to Promise (ATP)

The quantity of inventory that can be committed to new orders after accounting for current stock, WIP, inbound POs, and existing allocations.

CSR checked ATP before confirming the in-season reorder.; Marketing can presell only the ATP for the new capsule drop.; ATP drops after we reserve units for key accounts.

Backorder

Unfilled order quantity that will be shipped later when inventory becomes available, typically controlled by cancel dates and allocation rules.

We partial shipped and placed the remaining sizes on backorder.; Set a cancel date to prevent stale backorders.; Backordered units will auto-release when the replenishment receipt posts.

Bill of Lading (BOL)

A legal document issued by a carrier acknowledging receipt of goods, detailing shipment specifics and serving as evidence of contract of carriage (and sometimes title).

The carrier needs the BOL number to trace the trailer.; Use a straight BOL for domestic prepaid shipments.; Dispute the OS&D with photos and the signed BOL.

Bulk Pack

A packaging method where items are packed together without pre-defined size ratios or retail units separated; opposite of prepack/ratio pack.

Pack tees in bulk by color to cut packing time.; Retailer requires inner packs, not bulk pack, for each size.; Bulk pack reduces carton count but increases store-level touches.

Chargeback

A fee or deduction imposed by retailers for non-compliance with vendor requirements (labeling, routing, EDI timing, packaging, OTIF failures).

We got a chargeback for missing GS1-128 labels.; Late ASN triggered a $2500 compliance chargeback.; Renegotiated the routing guide to reduce chargebacks.

Cross-Docking

An operation where inbound goods are transferred directly to outbound shipments with minimal storage time, improving speed and reducing handling.

Flow the seasonal jackets through cross-dock to meet MABDs.; ASN-driven cross-dock minimizes put-away.; We cross-dock imports straight to key accounts.

DC (Distribution Center)

A warehouse facility used to receive, store, process, and ship wholesale orders; may include value-added services like ticketing, kitting, and rework.

Move the fast movers to a forward pick area in the DC.; The East Coast DC handles eCom and wholesale separately.; Our 3PL DC offers value-added services like ticketing.

Dead Stock

Inventory with little or no sales velocity that ties up working capital; often cleared via markdowns, jobbers, or off-price outlets.

Liquidate dead stock through off-price channels.; Convert dead stock fabric into private-label packs.; Use ABC+ageing to flag dead stock early.

Dropship

A fulfillment model where the wholesaler ships orders directly to the consumer on behalf of the retailer/marketplace, rather than to the retailer’s DC.

We fulfill retailer eCom orders via dropship from our DC.; Dropship requires parcel-ready packaging and branded packing slips.; EDI 846 and 855 updates keep dropship inventory in sync.

EDI (Electronic Data Interchange)

Standardized electronic messaging between trading partners (e.g., 850 Purchase Order, 856 ASN, 810 Invoice, 855 PO Ack, 860 PO Change) that automates order-to-cash.

We exchange 850 POs, 856 ASNs, and 810 invoices via EDI.; Add 855 PO Acknowledgment to confirm ship windows.; 997s are failing due to segment formatting errors.

Ex Works (EXW)

An Incoterm where the seller makes goods available at their premises; the buyer bears all costs/risks from pickup onward, including export formalities.

EXW Shanghai—buyer handles export and main carriage.; We prefer FOB over EXW to avoid origin hassles.; EXW quotes exclude export customs clearance.

Fill Rate

The percentage of ordered quantity (or lines/orders) shipped as requested; a key service-level KPI for wholesale accounts.

We improved unit fill rate from 92% to 97% this season.; Line fill rate slipped due to size S/M shortages.; Retailer bonuses kick in at 98% order fill rate.

FOB (Free on Board)

An Incoterm indicating the seller delivers goods loaded on the vessel at the named port; risk and costs transfer there. Often misused in domestic contexts.

FOB Ningbo—risk transfers at vessel rail.; For domestic terms, clarify FOB origin vs destination.; Our cost sheet is built FOB factory plus inland to port.

GS1

The global standards body for product identification and barcoding, including GTINs, UPC/EAN, SSCC, and data carriers.

Register UPCs with GS1 to get a company prefix.; GS1 standards govern GTIN, barcodes, and SSCC labels.; Retailer onboarding requires GS1 membership.

GS1-128/SSCC Label

A standardized logistics label using the GS1-128 barcode to encode an SSCC (Serial Shipping Container Code) and other shipment data on cartons/pallets.

Apply GS1-128 carton labels with 20-digit SSCCs.; Walmart requires SSCC on each master carton.; ASN carton IDs must match SSCC labels.

GTIN (Global Trade Item Number)

The GS1 identifier for trade items (e.g., GTIN-12, GTIN-13) used to uniquely identify products across systems and trading partners.

Each style-color-size needs a unique GTIN.; UPC-A is a GTIN-12, EAN-13 is a GTIN-13.; Map GTINs to SKUs in the ERP.

Hangtag

A product tag attached to apparel conveying brand, price, size, fiber content, and compliance information; often retailer-specified.

Retailer requires price on the hangtag at top right.; Eco-fiber claims must be substantiated on hangtags.; Switch to recycled hangtags to meet sustainability goals.

Harmonized System (HS) Code

The international tariff classification code used to determine duties and trade compliance; in the U.S. implemented as HTSUS.

Classify the hoodie under HS 6101.; Wrong HS code increased duty by 8%.; Check yarn content and construction for correct HS.

Incoterms

ICC-defined international trade terms (e.g., EXW, FOB, CIF, DDP) clarifying delivery points, risk transfer, and cost responsibilities between buyer and seller.

Customer insists on DDP, but we quote FOB port.; Use Incoterms 2020 in all POs.; CIF includes insurance; FOB does not.

Inner Pack

A standardized bundle of identical units inside a master carton, used to simplify handling, counting, and compliance with case-pack rules.

Pack 6 units per inner, 4 inners per master.; Retailer prohibits mixed-size inners.; Update ASN to include inner-pack quantities.

Inventory Turnover (Turns)

A measure of how quickly inventory sells through over a period; higher turns indicate better capital efficiency and fresher assortments.

Basics target 8–10 turns; fashion targets 4–6.; Improve turns by reducing lead time and raising fill rates.; Turns = COGS / average inventory.

Landed Cost

Total cost of a product when it arrives at the buyer’s facility, including product cost, freight, insurance, duties, customs, and compliance fees.

Our landed cost rose due to fuel surcharges and duties.; Quote WSP from landed cost plus margin.; Include compliance fees in landed cost models.

Lead Time

The time from order placement to receipt (production, transit, customs, and internal processing); critical for buy cycles and service levels.

Vendor lead time is 60 days plus 25 days ocean.; Shorten pick-pack lead time to hit MABD windows.; Use air for hot styles when lead time risk is high.

Line Sheet

A wholesale sales document listing styles, colors, sizes, images, wholesale price (WSP), and order parameters used in market appointments and line reviews.

Send the line sheet with wholesale prices and pack sizes.; Buyers want fabric content and MOQ on the line sheet.; Update the line sheet when colorways drop.

MABD (Must Arrive By Date)

Retailer-specified delivery window by which goods must arrive at the DC or store to support events and planograms; central to compliance programs.

Book earlier sailings to meet MABD before promos.; Late to MABD caused an OTIF penalty.; MABD is set at the DC appointment level.

MAP (Minimum Advertised Price) Policy

A supplier policy governing the lowest price resellers may advertise (not necessarily sell) an item for; helps prevent price erosion across channels.

MAP is $49; retailers can sell lower but can’t advertise lower.; Enforce MAP on marketplaces to protect brand equity.; MAP holidays align with door-buster events.

Margin (Gross Margin)

Sales minus cost of goods sold, often expressed as a percentage; a core measure of profitability at the style and account level.

Target a 40% gross margin at WSP.; Margin compression from freight led to a price increase.; Negotiate cost to preserve margin on basics.

MOQ (Minimum Order Quantity)

The smallest quantity a vendor or wholesaler will produce or sell for a given style/color/size, often driven by manufacturing efficiency.

Factory MOQ is 600 per color.; We set wholesale MOQs at 1 prepack per style-color.; MOQ exceptions apply to exclusive collabs.

MSRP

Manufacturer’s Suggested Retail Price; the reference retail price communicated to the channel, often used for promotions and perceived value.

WSP is $25 with MSRP $50 (keystone).; We removed MSRP for marketplaces with dynamic pricing.; Markdowns are taken off MSRP in promotions.

Net Terms (e.g., Net 30)

Payment terms defining when invoices are due and any early-pay discounts (e.g., 2/10 Net 30); affect cash flow and credit risk.

Account is Net 45 with 2/10 discount.; Switch new customers to prepaid until trade credit is approved.; Late payments extend DSO beyond target.

OTB (Open-to-Buy)

A merchandise budgeting control that sets how much inventory value can be purchased within a period, based on planned sales, markdowns, and on-hand.

We have $500k OTB left for in-season denim.; Reduce OTB after spring sell-through missed plan.; OTB gates late adds from sales team.

OTIF (On Time In Full)

A delivery performance metric measuring whether shipments arrive by the required date and with complete quantities; widely used by large retailers.

OTIF below 95% triggered fines.; Improve OTIF with earlier cutoffs and safety stock.; Account scorecards weight OTIF heavily.

Pick and Pack

Warehouse processes for selecting items from storage and packing them into shipment cartons according to order requirements and compliance rules.

Batch pick by wave, then pack by order.; Shift to zone picking for style-color efficiency.; Pick to light improved pack accuracy for prepacks.

PO (Purchase Order)

A buyer’s formal order specifying items, quantities, prices, terms, and delivery windows; forms the basis for fulfillment, invoicing, and compliance.

Send PO acknowledgment (855) within 48 hours.; The 860 PO change updated ship window and quantities.; Don’t ship without a released PO.

Prepack (Size Ratio Pack)

A predefined size assortment (e.g., S-M-M-L) packed together to simplify ordering, picking, and replenishment for multi-size apparel.

Ship 1-2-2-1 ratio prepacks per color.; Retailer requires 8-unit prepacks for tops.; Update ASN to reflect prepack composition.

QA/QC (Quality Assurance/Quality Control)

Systems and inspections ensuring products meet specifications and legal standards; includes in-line and final inspections, testing, and documented tolerances.

Adopt AQL 2.5 for final inspections.; QA caught stitching issues before bulk shipment.; Set tolerances in the tech pack to guide QC.

Replenishment

The process and rules for restocking inventory to targeted levels, often using POS/forecast data and min/max or service-level policies.

Basics run on weekly auto-replenishment rules.; CRP with POS data reduced stockouts.; Raise min/max for black tees ahead of back-to-school.

RFID (Radio Frequency Identification)

Radio tags and readers used to identify items or cartons without line-of-sight; boosts inventory accuracy and receiving speed, often tied to ASNs.

Source-tag with RFID to enable carton-level ASN.; RFID cycle counts improved accuracy to 98%+.; Retailer mandates RFID tags on all apparel.

Retailer Vendor Compliance Guide

A retailer’s detailed requirements for EDI, labeling, packaging, routing, appointments, and delivery; non-compliance often results in chargebacks.

The compliance guide specifies GS1-128 label placement.; Missing floor-ready ticketing violated the guide.; We review updates to the routing guide quarterly.

Sell-Through

The percentage of shipped units sold to consumers over a period; a key indicator of demand health and re-buy decisions.

Week 2 sell-through hit 60% on the capsule.; Boost sell-through with in-season reorders and size rebalance.; Low sell-through signals markdown risk.

SKU (Stock Keeping Unit)

The internal identifier for an item variant (typically style-color-size in apparel); used for inventory, pricing, and analytics.

Each style-color-size is a unique SKU.; Rationalize SKUs to reduce complexity.; Map GTINs to SKUs in the ERP.

Style-Color-Size Matrix

The grid of product variants that defines how styles are offered across colors and sizes; drives ordering, packing, and allocation.

Build the buy using the style-color-size matrix.; Ensure full-size runs for key doors.; Prepack ratios reflect the size matrix by region.

Tech Pack

A comprehensive product specification document (BOM, measurements, construction, trims, labeling) used to ensure consistent manufacturing.

Factory needs the tech pack with BOM and specs.; Update grade rules and tolerances in the tech pack.; QC checks against tech pack measurements.

Third-Party Logistics (3PL)

An external logistics provider that performs warehousing, fulfillment, and transportation services for the wholesaler.

Outsource B2B and dropship to a 3PL DC.; 3PL onboarding includes EDI and label certification.; Our 3PL offers VAS like ticketing and kitting.

UPC (Universal Product Code)

A GTIN-12 barcode format widely used in North America for retail scanning; each variant requires a unique UPC.

Retailer scans UPC-A at POS.; Assign a unique UPC to each style-color-size.; Verify UPCs match GTIN-12 in GS1 records.

Vendor-Managed Inventory (VMI)

A replenishment model where the supplier monitors retailer inventory/POS and creates stock transfers or orders to agreed service levels.

We replenish basics via VMI using weekly POS.; VMI raised in-stock while lowering the retailer’s inventory.; Define service levels and min/max in the VMI agreement.

Wholesale Price (WSP)

The price charged by the wholesaler to the retailer, set to achieve target margins after landed cost and compliance fees.

WSP set at $24 to maintain 55% margin.; Account requests a WSP discount for volume.; Keystone is a 2x multiple of WSP to MSRP.

WMS (Warehouse Management System)

Software that manages warehouse operations (receiving, put-away, slotting, picking, packing, shipping, inventory accuracy, and reporting).

Our WMS supports wave picking and ASN carton IDs.; Integrate WMS with EDI for real-time 856s.; Slotting optimization in the WMS cut travel time.