Common Terms & KPI Definitions

Learn more about the metrics and key productivity indicators displayed on WorkstandIQ dashboards.

Sales Terms


  • The income generated from sales transactions before the cost of goods and other expenses are considered.

Profit Margin

  • A product’s sale price minus its cost.
  • This number will be different for each product and is usually expressed as a percentage.
  • If a product costs $60, but you sold it for $100, you made $40, or a 40% margin.

Gross Profit Margin

  • Profit margin averaged across all the products sold.

Conversion Rate

  • The percentage of visitors who buy something at your store.
  • If 2,000 people visit your store in a week, but 400 buy, your conversion rate is 20%.

Average Transaction Value (ATV)

  • The average amount your customers are spending per transaction, and is expressed as a dollar amount.

Units Per Transaction (UPT)

  • The average number of items your customers are buying per transaction, and is expressed as a quantity.

Inventory Terms

Inventory Management

  • The system a retailer uses to make sure the right inventory is in the right place, at the right time, and in the right quantity.
  • As a part of this, the retailer is making sure that ordering, shipping, handling, and related costs are kept under control.

Cost of Goods Sold (COGS)

  • The direct cost, in dollars, of a product or products in a retailer's inventory.

Average Inventory at Cost

  • The average amount of inventory on hand over the course of a year, calculated in dollars


  • The process of sourcing, negotiating, and strategically selecting goods for your retail shop.

Purchase Order

  • A document used to communicate a purchase to an employer. It can be used to approve, track, and process purchases as well.
  • A purchase order usually indicates types, quantities, and agreed prices for products or services, as well as delivery dates.


  • The number of times a product completes a cycle of moving from warehouse to sales floor to checkout in a year.


  • Unlike a promotional sale, a markdown is a permanent price reduction due to a product’s inability to be sold at its original price to move the inventory and make room for new products.

Dead Stock

  • Sometimes called dusty inventory, dead stock is merchandise that has never been sold or has been in stock for a while.
  • This could be because a particular item is just seasonal, but other times it’s because the product simply isn’t in demand.


  • The difference between the amount of stock that a retailer has on the books and the actual stock available.
  • Its inventory loss is due to employee theft, shoplifting, administrative error, vendor fraud, or damage.

Lot Size

  • Also called order quantity, this is the quantity of an item you order for delivery on a specific date.

Inventory Turnover

  • The average number of times that inventory on hand is sold or used during a specific time period.
  • Generally, a high stock turn is good — it means you’re selling a lot without stocking too much.
  • To calculate it, divide the cost of goods sold by the average inventory.

Quantity on Hand (QOH)

  • The amount of physical inventory that a retailer has in possession.

Quantity on Order (QOO)

  • The amount of inventory in open purchase orders or manufacturing orders.

Quantity Discount

  • An incentive offered to a buyer to purchase a certain quantity for a decreased cost per unit.

Carrying Cost

  • Also known as holding cost is primarily the cost associated with inventory investment and storage.