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      Adesso Glossary of Terms

      Table of Contents

      1. Introduction
      2. Adesso-Used Acronyms
      3. Adesso Standard GL Names
      4. Terminology Used in Adesso AI
      5. Distributor Terms
      6. Industry Terms
      7. Trade Definitions
      8. Download

      Introduction

      There are a TON of terms in this industry (it's a CPG thing!). We've bundled all the terms you'll encounter in one place. Search for the word that has you stumped, and we'll give you an answer!

      Adesso-Used Acronyms

      • ABP: Annual Business Plan
      • AP: Annual Planner
      • API: Application Program Interface
      • CPG: Consumer Packaged Goods
      • EBITDA: Earnings Before Interest, Taxes, Depreciation, & Amortization
      • ERP: Enterprise Resource Planning – Financial (Accounting) System
      • FVLP: Forecast Volume List Price
      • HCR: Hosting Change Request
      • KPI: Key Performance Indicators
      • LE: Latest Estimate
      • NSO: Natural Specialty Organic
      • OCR: Optical Character Recognition
      • OSA: Outsourced Systems Administration
      • POS: Point of Sale
      • QB: QuickBooks
      • SOAR (Sales Operating Annual Report): Report in Adesso, also called Sales Operating Plan
      • SOC: System Operations & Controls
      • SOW: Statement of Work
      • TPE (Trade Promotion Effectiveness): Adesso's approach to Trade Promotion Management (TPM), which goes beyond simply managing trade.
      • TPM: Trade Promotion Management
      • TPO: Trade Promotion Optimization
      • TSR: Test Site Request

      Adesso Standard GL Names

      • 4601-ELDP: Every Day Low Price. This would be a deduction/chargeback (MCB) for an extended price reduction for performance detailed in the retailer agreement/contract. (Trade)
      • 4620-Merchandising: Retailers charge an additional fee on everything they sell. The goal is to reduce the need for broker help within the stores, thus reducing the 5% burden most brands pay their broker partners. Many brands choose to put these in an expense line item, arguing they can negotiate these as they scale or that they have reduced their broker commissions for certain retailers due to these fees. We categorize these as Trade Spend under the umbrella of Merchandising Fees. Still, retailers call their programs many different names: In-Store Execution (ISE) fees, Homestore Billing, Shelf Activity Fees, Fair Share, and others. (Trade)
      • 4615-Slotting: These could be case rate or lump sum charges for introductory product placement at either headquarters or retail store level that are paid as a deduction/chargeback (MCB) as detailed in the retailer agreement/contract. (Trade)
      • 4610-Ads/Fees: Running a promotion or being featured in a retailer's promotional material will usually cost an additional fee. TPR Ad Fees typically cover the retailer's administrative costs associated with uploading the promo, ordering additional products, changing tags, and possibly moving products to a different location in the store. (Trade)
      • 4605-Promotions: These are performance-based case rate allowances for short-term price reductions that are typically paid for short-term price reductions based on what the retailer purchases from the distributor for a specified period. These are paid by deduction/chargeback (MCB) as detailed in the retailer agreement/contract. (Trade)
      • 4501-Off-Invoice Discounts: These are deductions/chargebacks (MCB) paid for Off Invoice allowances that were either not provided, are outside the OI period, or represent floor stock protection. (Trade)
      • 4510-Shortages/Overages: As you can imagine, receiving docks have much to manage with thousands of brands, pandemic-related volume increases, staffing and supply shortages, and freight issues. This has resulted in a major deduction problem for all brands: shortages, short-ships, mis-ships, and over-ships are claims that the customer still needs to receive what you invoiced. The customer deducts the shortage on your check and may never communicate if the product was found later, if another product was received instead, or if it reimburses you for volume-related fees (for example, early payment discounts). These are essentially lost sales and should go to Trade Spend. (Non-Trade)
      • 4505-Early Payment Discount: Credit terms that entitle the buyer (distributor/retailer) to a discount on payment made earlier than the invoice maturity date. (Non-Trade)
      • 4630-Other Chargebacks: This account is a catch-all for any other chargebacks that come through that are a part of trade spend but do not have a home in one of the accounts above. We rarely see anything outside the buckets already covered, so you may want to omit this account unless you need it. (Non-Trade)
      • 2625-Spoils/Returns: Damaged or spoiled goods. (Non-Trade)
      • 5000-Repay: A deduction/chargeback viewed as invalid or exceeds the amount agreed to be paid in the retailer agreement/contract. Unauthorized non-trade deductions would be addressed in this category as well. (Repay)

      Terminology Used in Adesso AI

      • Admin Fee: A fee or charge that a manufacturer may impose on a retailer to cover the administrative costs associated with managing trade promotions. This fee is often part of the overall financial arrangements negotiated between manufacturers and retailers to effectively support and execute promotional activities. (Deal Type)
      • Bill Back Rate: The percentage or amount a manufacturer agrees to reimburse or "bill back" to a retailer for a specific promotional activity or discount provided to the end consumer. This reimbursement is typically based on the sales volume generated by the retailer during the promotional period. (Deal Type)
      • Display: A promotional presentation or arrangement of products within a retail space to attract attention and drive sales. Displays are a key element of trade promotions and are strategically designed to enhance the visibility and appeal of specific products during a promotional period. Here are some key points related to displays in trade promotion management. (Deal Type)
      • Distribution Allowance (Dist Allow): A financial incentive or reimbursement that manufacturers provide retailers for achieving or maintaining a certain level of product distribution. This allowance encourages retailers to stock and promote the manufacturer's products more prominently within their stores. (Deal Type)
      • Everyday Low Price (EDLP): A pricing strategy where a retailer offers consistently low product prices without relying on frequent sales or promotions. This strategy is in contrast to the High-Low pricing strategy, where prices are initially set higher but discounted during promotional periods. (Deal Type)
      • Feature: A prominent presentation or display of a product within a retail environment to attract customer attention and drive sales. Featuring a product involves showcasing it in a way that distinguishes it from regular product placements, often through special displays or arrangements. (Deal Type)
      • Feature & Display: Featuring a product involves giving it special prominence and attention within the retail space to highlight its unique attributes, promotions, or other distinguishing factors. A display involves the visual presentation of products in a way that captures shoppers' attention. It can include various arrangements, such as end-cap displays, point-of-purchase displays, or thematic presentations. (Deal Type)
      • Missed OIs: Adesso term for an invoice discount that was missed when the invoice was sent and was deducted later in the sales process (usually as a deduction). (Deal Type)
      • Off-Invoice Rate: A deduction or reduction in the invoice price of a product at the time of sale. The off-invoice discount is applied directly to the product's selling price on the invoice, reducing the amount the buyer has to pay. (Deal Type)
      • Scan: The process of capturing and recording sales transactions using barcode scanning technology at the point of sale (POS). Scanning barcodes on products allows for the automatic and accurate tracking of sales data, which is crucial for evaluating the performance of trade promotions. (Deal Type)
      • Slotting: Securing favorable product placement or visibility within a retail store. It involves negotiating with retailers to allocate specific shelf space, end-cap displays, or other prominent locations within the store for a product during a promotional period. (Deal Type)

      Distributor Terms

      • Free Fill: Product sold to the retailer at "no charge" to gain distribution at said account
      • MCB (Manufacturer Charge Back): Charge to a manufacturer based on the quantity of cases shipped to a retailer

      Industry Terms

      • API (Application Programming Interface): a way two or more computer interfaces speak, also called Interfaces.
      • ACV (All Commodity Volume): The percent of the market carrying a specific item.
      • BOGO (Buy One Get One Free): A promotional sale price allowing the consumer to buy one item for a second one free.
      • Case Stack Deal: Promotion given to stores that buy multiple cases of an item. Adesso recommends something other than this type of deal.
      • COGS (Cost of Goods Sold): Measures the "direct cost" of producing goods or services. It includes material cost, direct labor cost, and direct factory overheads and is directly proportional to revenue. As revenue increases, more resources are required to produce the goods or services. COGS is often the second line item on the income statement, coming right after the sales revenue. COGS is deducted from revenue to find gross profit.
      • Coupon Handling: Charge incurred by a manufacturer by a coupon clearinghouse, usually $0.08.
      • CPG (Consumer Packaged Goods): Items consumers use daily require regular replacement.
      • Demos: A store demonstration is an interaction between a manufacturer and a consumer. Most demos are done at the store level, providing a chance to taste the product and make a purchase.
      • EDLP (Everyday Low Price): A term used by a retailer who sets one price and does not discount.
      • EDV (Everyday Value): A term used by a retailer who sets one price and does not discount
      • ERP (Enterprise Resource Planning): An accounting software system such as QuickBooks, NetSuite, SAP, and MS Dynamics.
      • FDM (Food/Drug/Mass Merchandise): The trade channel specializing in food, beverages, medicine, and household products.
      • FOB (Freight on Board): The price a distributor pays when they pick up the product at the manufacturer.
      • FSI (Free Standing Insert): A Manufacturer's Coupon placed in a newspaper or magazine.
      • HBC (Health and Beauty Care): Non-food consumer packaged goods associated with improving health and appearance, also known as HABA (Health and Beauty Aids).
      • HIP Pocked Deal: Deal given to a retail rep or broker only for select accounts.
      • Intro Deal: Deal given to a distributor when a product is first authorized.
      • IRC (Instant Redeemable Coupon): A printed form coordinating many product demonstrations. These are cents off or discounts that are immediately offered at the checkout.
      • IRI (Information Resources Inc.): A company that collects sales data and sells reports to manufacturers.
      • Landed Cost: Distributor Cost for a distributor that picks up the product includes freight charges.
      • Leadtime: The time in days that a manufacturer needs to deliver a PO to a distributor.
      • P&L (Profit & Loss): A financial statement that evaluates a company's revenues, costs, and expenses.
      • POG (Plan-O-Gram): The layout of products on a store's shelves.
      • POS (Point of Sale): The location where a customer pays for goods (for example, a cash register or online shopping cart).
      • ROI (Return on Investment): A measurement of profitability on an investment by comparing profit or loss to its cost.
      • SKU (Store Keeping Unit): An identification code for a store or catalog item used to track stock levels.
      • Slotting: Fee paid to distributor or retailer to stock a given item.
      • SPIFS: A reward (usually money) is paid to a representative for selling a manufacturer's product.
      • SPINS: A company that collects sales data (specifically natural channels) and sells reports to manufacturers
      • Spoilage: Product that cannot be sold, whether through expired code date, damage, etc.
      • SPP (Sales Per Point): Determines the volume sold per sales point.
      • SRP (Suggested Retail Price): A pricing strategy where manufacturers recommend product prices.
      • Street Monies: Monies representatives have, at their discretion, to spend to drive sales volume.
      • TPR (Temporary Price Reduction): When a product's price is reduced for a certain period.
      • Unsaleables: Products that cannot be sold, whether through expired code date, damage, etc.
      • UPC: Universal Product Code, which is the bar code on a product.

      Trade Definitions

      • Line Drives: Promoted groups or line-priced items are called Promoted Product Group (PPG). A set of Universal Product Codes (UPCs) that are priced and marketed together – usually to promote items of similar size together vs. individual promotions.
      • Lump Sum/Fixed Fees: Includes End-Caps, Displays, Shipper, and Case Stacks. These would be a set amount (not a case rate) as a deduction/chargeback (MCB) for merchandising performance detailed in the retailer agreement/contract. Examples would be Ad Fees, Display Allowances, and other in-store performance.
      • Indirect Retailer: A third-party selling goods and services to consumers.
      • OI (Off invoice): A discount is given when an order is placed.
      • Post Audit Trade: Any deductions/chargebacks (MCB) addressed in a delayed fashion (typically up to 24 months) for any performance that is missed or not deducted/charged back by the customer. These should be validated against the distributor or retailer agreement/contract.
      • Promoted Group: Line drives or line-priced items are called Promoted Product Group (PPG). A set of Universal Product Codes (UPCs) that are priced and marketed together – usually to promote items of similar size together vs. individual promotions.
      • Scan Down: Promotion is given to retail where the manufacturer pays for a product "scanned" during a specific period.
      • Slot Fund: A pool of financial resources set aside to secure favorable product placement or visibility within a retail store.
      • Trade Fund: A pool of financial resources a manufacturer or supplier sets aside to support various promotional activities and incentives offered to retailers or distributors. These funds are allocated to execute and facilitate trade promotions, marketing campaigns, and other initiatives that aim to boost the sales and visibility of the manufacturer's products within the retail channel.

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      Adesso Glossary of Terms