Operational glossary
The vocabulary of scaling product businesses.
Plain-English definitions of the terms that recur in Fractional COO engagements, ecommerce operations, supply chain and marketplace work. Written for founders, not for other consultants.
Fractional COO
A senior Chief Operating Officer retained part-time, typically 1 to 3 days per week, embedded inside an SME's leadership team. Functionally identical to a full-time COO but at 40 to 60% of the loaded cost. Most engagements run 12 to 24 months and end when permanent capacity is in place.
Fractional Operations Director
Used interchangeably with Fractional COO in many UK SMEs. Technically a more execution-focused remit (less commercial breadth) but in practice the same model: senior operational leadership retained part-time on a defined day-commitment.
Operational diagnostic
A structured two-week audit across the six operational areas (fulfilment, supply chain, ecommerce ops, marketplace ops, commercial reporting, team structure). Output is a prioritised plan with quantified opportunities. Most Fractional COO engagements start with this.
Contribution margin
Revenue minus the variable cost to fulfil that revenue (COGS + fulfilment + payment processing + channel fees + returns). The single most useful margin metric for ecommerce and product businesses because it isolates what each sale actually contributes after variable costs.
Inventory turn
Annual cost of goods sold divided by average inventory value. Higher turn means less working capital tied up in stock. Healthy turns are 5 to 8 for most product categories; below 4 indicates working capital is locked in slow-movers.
3PL
Third-party logistics. A vendor that stores your inventory and fulfils your orders. Most £1m to £20m ecommerce brands use a 3PL rather than running their own warehouse. Costs are typically charged as per-pallet storage plus per-order pick-and-pack.
FBA
Fulfilment by Amazon. Amazon's logistics service: you send stock to Amazon's fulfilment centres and Amazon picks, packs, ships, and handles returns. Required for Prime eligibility. FBA fees average 15 to 20% of revenue for most categories.
Pan-EU FBA
Amazon's Pan-European FBA programme: you send stock to one EU country and Amazon redistributes inventory across DE, FR, IT, ES and PL. Requires VAT registration in each country. Single biggest operational unlock for most UK Amazon brands.
IOSS
Import One Stop Shop. An EU VAT scheme for low-value goods (under €150) imported from outside the EU. Lets you collect EU VAT at the point of sale rather than having the customer charged on delivery. Essential for UK brands shipping to EU consumers post-Brexit.
AWD
Amazon Warehousing and Distribution. Amazon's separate long-term storage service, used to feed FBA inventory at lower cost. Sits upstream of FBA for brands managing multiple-month inventory cycles.
Brand Registry
Amazon's intellectual property protection programme for brands. Requires a registered trademark. Unlocks A+ content, Brand Story, Sponsored Brands, Vine, and the ability to remove listing hijackers.
OTIF
On-Time-In-Full. A supply chain performance metric measuring the percentage of orders delivered both on time and at the requested quantity. Standard B2B/wholesale KPI; less common in DTC ecommerce but worth tracking in multi-channel businesses.
Landed cost
The total cost of a product delivered to your warehouse: factory cost + freight + duty + customs + insurance + handling. Often 25 to 60% more than the headline factory cost. Founders frequently price products based on factory cost and lose margin they didn't realise they were giving up.
Replenishment planning
The operational discipline of deciding how much of each SKU to reorder and when. Driven by historical demand, lead time, safety stock and forecasted demand. Spreadsheet-based for most brands under £3m, system-driven above that.
Safety stock
Inventory held to buffer against demand spikes or supply delays. Calculated from demand variability and lead time variability. Too much ties up working capital; too little causes stock-outs. ABC classification helps allocate safety stock proportionate to product importance.
ABC classification
A categorisation of SKUs by revenue contribution. A items (top ~20% by revenue, often 70% of revenue) get tight inventory management; B items moderate; C items minimal. Used to focus operational attention where it matters.
SKU rationalisation
Deliberately culling slow-moving SKUs to reduce inventory complexity and free working capital. Most product businesses accumulate SKU sprawl as they scale and benefit from rationalising annually. Typical exercise removes 15 to 30% of SKUs that generate <2% of revenue.
ERP
Enterprise Resource Planning system. The integrated software backbone for inventory, orders, finance and procurement in larger SMEs. Common UK ecommerce options: NetSuite, Microsoft Business Central, Brightpearl, Khaos Control. Usually overkill below £5m of revenue.
WMS
Warehouse Management System. Operational software for warehouse pick, pack, dispatch and inventory accuracy. Often integrated with the ERP and the ecommerce platform. Examples: ShipStation, Mintsoft, Manhattan, Linnworks (which spans WMS and OMS).
OMS
Order Management System. The layer that aggregates orders from multiple channels (Shopify, Amazon, eBay, wholesale) and routes them to fulfilment. Often combined with inventory management. Examples: Cin7, Linnworks, Khaos Control, Brightpearl.
Discovery call
A no-pressure 30-minute conversation to understand the business, the operational pain, and whether a Fractional COO engagement would be a useful next step. Includes a candid view on fit either way. No follow-up sequence; no pitch deck.
Embedded engagement
An operational engagement model where the fractional leader sits inside the leadership team, owns operational outcomes, and is accountable for delivery , as distinct from advisory or consulting models which produce recommendations but do not execute.
S&OP
Sales and Operations Planning. A monthly forum bringing commercial, operations and finance into a single demand and supply conversation. Common above £10m of revenue; rare below £5m. The point at which it becomes worth running formally is usually a Fractional COO recommendation.
Pick path
The physical route a picker takes through a warehouse to fulfil an order. Optimising the pick path (slotting fast-movers near dispatch, batching orders, using zone picking) typically reduces pick time 15 to 25%. A standard early intervention in fulfilment redesign engagements.
EFN
European Fulfilment Network. Amazon's basic cross-border programme allowing UK FBA inventory to fulfil EU orders. Slower delivery than Pan-EU and limited to UK-stocked SKUs. Useful as a starter; superseded by full Pan-EU FBA once volume justifies it.
AEO
Authorised Economic Operator. A UK and EU trusted-trader status that gives customs benefits: deferred VAT, fewer inspections, simpler customs procedures. Worth the application effort for most £5m+ importers.
REACH
EU regulation on chemicals (Registration, Evaluation, Authorisation and Restriction of Chemicals). Affects any product containing chemical substances, including consumer goods, cosmetics, and many electronics. UK has a parallel UK-REACH regime post-Brexit.
UKCA marking
UK Conformity Assessed marking. The UK's post-Brexit equivalent of CE marking for products requiring conformity certification. Sits alongside (or replaces) CE for products sold in Great Britain. Northern Ireland still uses CE.
MOQ
Minimum Order Quantity. The smallest order a supplier will accept. Lower MOQs preserve working capital but increase unit cost. Negotiating MOQ flexibility is a common early supply chain intervention.
Want this applied to your business?
30 minutes on the phone with James. Bring the operational picture, leave with the next two or three things to action.