Glossary

Shopify discount and pricing glossary

Clear definitions of the discount and pricing terms Shopify merchants run into, from volume discounts and quantity breaks to margin-based pricing and AOV.

Showing 120 of 120 terms

Volume discount: A discount that lowers the price as a customer buys more units, set across quantity tiers (for example 10% off at 3+, 15% off at 6+). It is used to increase average order value and units per order.
Quantity break: Another name for a volume discount: the unit price drops automatically when the cart reaches a set quantity. The available breaks are usually shown on the product page to encourage larger orders.
Tiered pricing: Pricing that changes at different quantity or spend levels. It comes in two forms: tiered quantity discounts (a discount per bracket) and tiered unit pricing (a fixed per-unit price per bracket, common for wholesale).
Tiered unit pricing: A model where each quantity bracket has a specific price per unit (for example $9/unit at 1 to 9, $7/unit at 10+). It is widely used for wholesale and B2B buyers.
BOGO (Buy X Get Y): A promotion where buying one or more items unlocks a reward on others, such as buy one get one free, a percentage off, or a fixed amount off a second product.
Bulk discount: A discount applied across many products at once, often combined with bulk price updates that reprice a large catalog in a single action rather than editing products one by one.
Wholesale pricing: Special prices for trade or B2B buyers, usually unlocked by customer tag, segment, or login. It often uses tiered unit pricing so the per-unit price improves with volume.
B2B pricing: Customer-specific pricing for business buyers, gated by tag, segment, login, or purchase history, so only approved accounts see the trade prices while guests see retail.
Margin-based discount: A discount taken out of your profit margin rather than your selling price, so deeper discounts never touch your cost. A profit floor of cost plus a minimum profit keeps every sale above cost.
Profit margin: The difference between an item's selling price and its cost. Net margin per campaign measures the real profit a promotion produces after discounts and shipping, using your Shopify cost prices.
Average order value (AOV): The average amount a customer spends per order. Volume discounts, quantity breaks, and free-shipping thresholds are common tactics for lifting AOV.
Discount stacking and conflicts: When two or more promotions apply to the same products at once. Without conflict detection, stacked discounts can silently combine and erode margin, so catching overlaps before activation matters.
Free shipping threshold: A minimum cart value that unlocks free shipping (for example free shipping over $50). A progress bar that shows how much more is needed is a proven way to raise average order value.
Cart-spend discount: A discount unlocked by total cart value rather than quantity, often in tiers (spend more, save more). It rewards bigger baskets across different products.
Percentage discount: A discount that takes a set percentage off the price, such as 20% off. It is the most common promotion type and scales automatically with the value of the item.
Fixed-amount discount: A discount that takes a set cash amount off, such as $10 off, applied per item or per order. It gives a predictable saving regardless of the price.
Automatic discount: A discount that applies at checkout on its own when a cart meets the rules, with no code to type. It removes friction and usually lifts redemption compared with codes.
Discount code: A coupon a shopper enters at checkout to unlock a saving. Codes are useful for tracking specific campaigns, influencers, or channels.
Coupon: A voucher, usually a code, that grants a discount or perk at checkout. It is often used to reward signups, recover carts, or run time-limited offers.
Order discount: A discount applied to the whole order total rather than a single product, commonly tied to cart value or a code.
Product discount: A discount applied to specific products or variants rather than the entire order, useful for clearing or promoting selected items.
Shipping discount: A discount that reduces or removes the shipping cost, either storewide or above a spend threshold.
Spend-and-save: A tiered offer where a larger cart unlocks a larger saving, such as save 10% over $50 and 15% over $100.
Gift with purchase (GWP): A free item added when a cart meets a rule, used to raise average order value and move selected stock without cutting headline prices.
Free gift: A no-cost product unlocked by a qualifying purchase, often a sample or add-on that encourages larger orders.
Buy one get one free: A BOGO offer where buying one item makes a second free. It clears stock and raises units per order while keeping the headline price intact.
First-order discount: A one-time saving for the first purchase a shopper makes, usually given in exchange for an email or SMS signup.
Welcome discount: A small incentive offered to new subscribers or first-time visitors to convert them into buyers.
Loyalty discount: A reward for repeat or high-value customers, such as members-only pricing or points that convert into savings.
Seasonal sale: A promotion tied to a calendar moment such as Black Friday, back to school, or end of season, planned around expected demand.
Flash sale: A short, deep discount that runs for hours or a single day to create urgency and drive a spike in orders.
Clearance: Reduced pricing used to sell through aging, seasonal, or discontinued stock, often in staged markdowns that stop short of margin.
Markdown: A reduction from the original price, permanent or staged, used to move inventory while protecting a set margin floor.
Price drop: A visible reduction from a previous price, often paired with a compare-at price to signal the size of the saving.
Sale price: The temporary reduced price a product sells at during a promotion, shown against its regular price.
Compare-at price: The higher reference price shown struck through next to the sale price, used to communicate how much a shopper saves.
MSRP: The manufacturer suggested retail price, the price a maker recommends sellers charge. It is often used as the reference point for a discount.
Storewide sale: A promotion that applies across the whole catalog, usually a single percentage or amount off everything for a set period.
Collection discount: A discount scoped to a Shopify collection, so an entire category can be promoted without tagging products one by one.
Bundle discount: A saving unlocked when specific products are bought together, used to lift order value and pair slower items with popular ones.
Mix-and-match bundle: A bundle where the shopper picks any qualifying items to reach a set price or discount, adding flexibility over a fixed bundle.
Cost price: What an item costs you to buy or make, entered in Shopify as the cost per item. It is the basis for margin and profit reporting.
Landed cost: The full cost of getting a product to your door, including the item, shipping, duties, and fees. It gives a truer margin than product cost alone.
Markup: The amount added to cost to set the selling price, expressed as a percentage of cost. A $10 item sold at $15 carries a 50% markup.
Margin vs markup: Margin is profit as a share of the selling price, while markup is profit as a share of cost. The same dollar profit shows a smaller margin than markup percentage.
Keystone pricing: A simple rule of doubling the cost to set the retail price, giving a 50% margin. It is a common starting point for retail.
Cost-plus pricing: Setting price by adding a fixed markup to cost. It is predictable but ignores demand and competitor pricing.
Value-based pricing: Setting price by the value customers place on a product rather than its cost, which allows higher margins for differentiated goods.
Dynamic pricing: Adjusting prices in response to demand, timing, or customer segments rather than holding one fixed price.
Psychological pricing: Setting prices that read as cheaper, such as $9.99 instead of $10, to nudge perception and conversion.
Charm pricing: The tactic of ending prices in .99 or .95 so they feel lower, a form of psychological pricing.
Price anchoring: Showing a higher reference price first so the actual price feels like a better deal, common with compare-at pricing.
Price elasticity: How much demand changes when price changes. Elastic products lose many sales from small increases, while inelastic ones lose few.
Unit price: The price per single unit, useful when the same product sells in packs or tiers so shoppers can compare value.
Minimum order quantity (MOQ): The smallest quantity a buyer must purchase, common in wholesale to make an order worth fulfilling.
Minimum advertised price (MAP): The lowest price a brand allows resellers to advertise, used to protect brand value and reseller margins.
Price floor: The lowest price a product may sell at, often set at cost plus a minimum profit so discounts never dip below margin.
Profit floor: A guardrail that keeps every discounted sale above cost plus a set minimum profit, so deeper promotions never lose money.
Break-even price: The price at which a sale covers its cost exactly, producing no profit and no loss. Discounts below it lose money.
Net terms: An agreement that lets business buyers pay within a set period after delivery, such as net 30 for 30 days.
Net 30: A payment term giving a buyer 30 days to pay an invoice, common in B2B and wholesale relationships.
Purchase order (PO): A document a business buyer issues to commit to buying agreed goods at agreed prices, often paired with net terms.
Price list: A set of prices assigned to a customer group or market, so approved buyers see trade prices while others see retail.
Customer tag: A label attached to a customer record in Shopify, used to unlock gated prices, segments, or promotions for specific accounts.
Customer segment: A group of customers defined by shared traits or behavior, used to target pricing and promotions precisely.
Gated pricing: Prices visible only to logged-in or approved customers, keeping trade or member rates hidden from the general public.
Trade account: A business customer account approved for wholesale terms and pricing, usually after an application or verification step.
Resale certificate: A document that lets a business buy goods tax-free for resale, often required to open a wholesale account.
Tax-exempt pricing: Prices shown without tax for qualifying B2B or tax-exempt buyers, based on their status or region.
Dropshipping: A model where a store sells products shipped directly by a supplier, so margins are thin and price floors matter.
Units per transaction (UPT): The average number of items in each order. Volume discounts and bundles are used to raise it.
Conversion rate (CVR): The share of visitors who complete a purchase. Clear pricing, offers, and thresholds all influence it.
Customer lifetime value (LTV): The total profit a customer generates over their whole relationship with a store, used to judge how much to spend acquiring them.
Customer acquisition cost (CAC): The average cost to win one new customer, including ad and promotion spend. It is weighed against lifetime value.
Return on ad spend (ROAS): The revenue earned for each unit of ad spend. Discounts affect it by changing both conversion and margin.
Gross margin: Revenue minus cost of goods, shown as a percentage of revenue. It measures how much each sale contributes before overhead.
Net margin: The profit left after all costs, including discounts, shipping, and fees, expressed as a share of revenue.
Contribution margin: What a sale contributes toward fixed costs and profit after its variable costs, useful for judging whether a promotion pays off.
Margin erosion: The slow loss of profit when discounts stack, thresholds are set too low, or costs rise faster than prices.
Discount depth: How large a discount is, such as 10% versus 40% off. Deeper discounts lift conversion but cut margin faster.
Redemption rate: The share of issued discounts or codes that shoppers actually use, a measure of how compelling an offer is.
Sell-through rate: The share of received stock sold in a period, used to judge whether pricing and promotions are moving inventory.
Gross merchandise value (GMV): The total value of goods sold before discounts, refunds, and fees, a top-line measure of store volume.
Cart abandonment: When a shopper adds items but leaves before buying. Shipping-cost surprises and unclear pricing are common causes.
Repeat purchase rate: The share of customers who buy more than once, a signal of loyalty that discounts and rewards aim to grow.
Churn: The rate at which customers stop buying or subscriptions lapse, the opposite of retention.
Upsell: Encouraging a shopper to buy a higher-value version of a product, lifting order value at the point of decision.
Cross-sell: Suggesting related or complementary products to add to a cart, raising the number of units per order.
Threshold: A cart value or quantity that unlocks a reward, such as free shipping over $50 or 15% off at 6 units.
Progress bar: An on-site indicator showing how close a cart is to unlocking a reward, a proven nudge toward larger orders.
Countdown timer: A visible clock on a promotion that signals it will end, using urgency to prompt faster decisions.
Urgency: A tactic that pushes shoppers to act now, using timers, limited windows, or low-stock signals.
Scarcity: The perception that supply is limited, such as low-stock labels, which raises the felt value of buying now.
Sale badge: A label on a product image or card that flags a discount, drawing the eye to promoted items.
Announcement bar: A banner across the top of a store used to promote a sale, code, or shipping offer.
Campaign: A planned promotion with a goal, audience, offer, and schedule, measured on the profit it produces rather than revenue alone.
Evergreen promotion: An always-on offer, such as standing volume tiers, that runs continuously rather than for a fixed window.
Promotion schedule: The start and end times set for an offer, used to launch and retire sales automatically.
Shopify Functions: Shopify's system for custom back-end logic, including the discount logic that powers modern discount apps at checkout.
Shopify Scripts: A legacy Shopify Plus tool for custom checkout logic, now being replaced by Shopify Functions and checkout extensibility.
Shopify Plus: Shopify's enterprise plan for high-volume merchants, adding advanced checkout, B2B, and automation features.
Checkout extensibility: Shopify's modern, app-based way to customize checkout, replacing older script-based edits.
Metafield: A custom field that stores extra data on a product, variant, or customer, often used to target pricing and promotions.
Variant: A specific version of a product, such as a size or color, each with its own price, SKU, and inventory.
SKU: A stock keeping unit, the unique code that identifies a product variant for inventory and pricing.
Collection: A group of products in Shopify, used to organize the catalog and to scope discounts to a category.
Draft order: An order a merchant builds manually, useful for wholesale quotes and custom pricing before sending an invoice.
Point of sale (POS): Shopify's in-person selling system, where the same catalog and many discounts carry into physical stores.
Shopify Markets: Shopify's tool for selling internationally, managing currencies, pricing, and duties across regions.
Liquid: Shopify's templating language used to build themes and display data such as prices and discounts on the storefront.
Theme app extension: A way for apps to add features to a storefront, such as a discount widget, without editing theme code directly.
Shopify Flow: A Shopify automation tool that triggers actions from store events, such as tagging customers to unlock pricing.
Webhook: An automated message Shopify sends when an event happens, letting apps react to orders, carts, or customer changes in real time.
Discount combinations: Shopify's rules for whether product, order, and shipping discounts can apply together, key to avoiding unwanted stacking.
Order tag: A label added to an order, used to mark how it was discounted or fulfilled and to power automations.
Shopifolk: The affectionate in-house nickname Shopify uses for its employees. It appears across internal communications, engineering and organization names, and public employer branding to build a sense of community, belonging, and shared identity.
Merchant: The term Shopify uses for the store owners and businesses that sell on its platform, the audience discount and pricing tools serve.
Shopify Partner: A developer, agency, or expert in the Shopify ecosystem who builds stores, apps, or themes for merchants.
Built for Shopify: A quality standard and badge Shopify grants apps that meet its highest bars for performance, design, and integration.
Shopify App Store: The marketplace where merchants find and install apps such as discount, pricing, and profit tools.

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