Essential E‑Commerce Product Manager Glossary: From GMV to AARRR

1. Basic Concepts

GMV (Gross Merchandise Volume) : Total transaction amount, including unpaid and refunded orders. Formula: GMV = sales + cancelled orders + rejected orders + returned orders. Boss's misunderstanding: Assuming GMV equals actual revenue, but refunds can be 30%.

Avoidance tip: Report that actual revenue is about 70% of GMV.

SKU (Stock Keeping Unit) : The smallest unit for inventory control (e.g., iPhone 14 Pro 256GB Silver). Avoidance tip: Do not merge different specifications into one SKU to prevent inventory chaos.

SPU (Standard Product Unit) : Standardized product unit (e.g., iPhone 14 Pro) that may contain multiple SKUs. One SPU corresponds to multiple SKUs (different colors/specs). Used for product detail pages; SKU selected at order time.

2. User Behavior

UV (Unique Visitor) : Number of distinct visitors per day; multiple visits by the same user count as one UV. Boss's illusion: High UV guarantees high sales, which is false.

PV (Page View) : Number of page loads; each refresh counts as a PV. High PV/UV ratio (>3) indicates strong attraction but low conversion.

Bounce Rate : Percentage of sessions where the user leaves after viewing only the entry page. Formula: Bounce Rate = single‑page visits / total visits × 100%.

3. Transaction & Logistics

CVR (Conversion Rate) : Ratio of users who complete a purchase to total visitors. Formula: CVR = (conversions / total visits) × 100%.

Examples: Order conversion rate = number of ordering users / UV; Payment conversion rate = number of successful payments / number of orders.

AOV (Average Order Value) : Average revenue per order (total sales ÷ number of orders). Strategies to improve AOV include related recommendations, tiered discounts, bundling, and free‑shipping thresholds.

ARPU (Average Revenue Per User) : Average revenue contributed by each user over a period.

COD (Cash On Delivery) : Payment upon receipt of goods. Risk: High COD rates in Southeast Asia often accompany high refusal rates, leading to shipping cost losses.

Delivery Rate : Percentage of parcels successfully delivered; also called dispatch or sign‑off rate.

FBA (Fulfillment by Amazon) : Amazon’s logistics service for third‑party sellers, handling picking, packing, and delivery. Beware of high storage fees and unsold inventory.

3PL (Third‑Party Logistics) : Outsourcing logistics functions (transport, warehousing, order processing) to specialized providers such as SF Express or JD Logistics.

4. Marketing & Promotion

CPC (Cost Per Click) : Advertising cost incurred each time a user clicks an ad. Formula: CPC = total ad spend / number of clicks.

CPM (Cost Per Mille) : Cost per thousand ad impressions.

CTR (Click‑Through Rate) : Ratio of clicks to impressions. Formula: CTR = clicks / impressions.

CAC (Customer Acquisition Cost) : Total cost to acquire a new customer. Formula: CAC = (ad spend + labor cost + tech cost) / number of new users.

5. Data & Strategy

RFM Model : Customer segmentation based on Recency, Frequency, and Monetary value.

Recency: Time since last purchase; shorter intervals indicate higher engagement.

Frequency: Number of purchases in a period; higher frequency suggests loyalty.

Monetary: Total spend; higher amounts denote high‑value customers.

LTV (Customer Lifetime Value) : Total revenue expected from a user over their lifetime. Formula: LTV = ARPU × average user lifespan.

AARRR Model : Pirate metrics framework covering Acquisition, Activation, Retention, Revenue, and Referral. Typical funnel illustrated below.