Reference
Distribution AI Glossary
The language of modern distribution — defined for operators, not software vendors.
Backorder Management
The process of tracking, communicating, and fulfilling orders for items not currently in stock, including partial shipments and customer notifications. Effective backorder management keeps customers informed while minimizing fulfillment delays and protecting margin on split deliveries.
Branch-Level Pricing
Pricing rules and margin adjustments applied at the individual branch or location level, often varying by customer relationship, local competition, or inventory position. Branch-level pricing allows regional managers to respond to market conditions without overriding company-wide pricing policy.
Commodity Pricing Volatility
Frequent fluctuations in the cost of raw or commodity-based materials — lumber, steel, copper — that require real-time price updates to maintain accurate quoting. Managing commodity pricing volatility is critical for maintaining margin when cost inputs change faster than quote cycles.
Counter Sales
Walk-in or phone-based sales handled at the branch counter, typically high-volume, time-sensitive transactions requiring instant product lookup and pricing. Counter sales reps often handle dozens of transactions per shift, making speed and accuracy in the quoting system essential.
ERP Workflow Layer
Software that sits on top of an existing ERP to automate the manual work between transactions — quoting, order entry, procurement, dispatch — without replacing the ERP itself. An ERP workflow layer extends the value of existing systems while reducing the time employees spend on repetitive tasks.
Lost Sale Capture
The practice of recording quotes that did not convert to orders, enabling analysis of win/loss patterns, competitor pricing, and product gaps. Lost sale data is one of the most underutilized sources of competitive intelligence in distribution.
Proof of Delivery (POD)
Documentation confirming that materials were delivered to the job site, often required for invoice approval and dispute resolution. POD typically includes a signed receipt, timestamp, and delivery photos, and is increasingly captured digitally to speed up billing cycles.
Quote-to-Order Conversion
The workflow that moves an accepted quote into a confirmed sales order, including pricing lock, inventory reservation, and handoff to fulfillment. A smooth quote-to-order conversion reduces errors and ensures customers receive exactly what was quoted at the agreed price.
SKU Enrichment
The process of appending missing or incomplete product data — dimensions, specs, manufacturer codes, images — to existing SKU records, enabling faster and more accurate quoting. SKU enrichment is foundational to AI-powered quoting, where incomplete data leads to pricing errors and customer confusion.
Takeoff
A quantity and materials estimate derived from construction drawings, used as the basis for a materials quote. Common in lumber, framing, roofing, and millwork, takeoffs can range from simple hand counts to complex multi-page estimates for large commercial projects.
Unstructured RFQ
A quote request that arrives outside a structured system — via email, phone, or handwritten note — requiring manual interpretation before pricing. Common in lumber and building materials where contractor relationships are informal and high-volume, unstructured RFQs are one of the biggest sources of quoting delay.
Will-Call
An order fulfillment method where the customer picks up materials at the branch rather than receiving delivery. Requires different staging and confirmation workflows than delivery orders, and is common for contractors who need materials same-day to keep jobs moving.
Account Stratification
The practice of segmenting customers by revenue, margin, or strategic value to prioritize sales effort and service levels accordingly. Account stratification helps inside sales and branch managers focus time on the accounts that drive the most profitable growth.
Contract Pricing
Pre-negotiated pricing agreements tied to specific customers, often volume-based, requiring the order entry system to apply the correct price at the time of order. Misapplied contract pricing is one of the most common sources of margin leakage in industrial distribution.
Cross-Dock
A fulfillment method where inbound product from a supplier is transferred directly to an outbound shipment without being stored, reducing handling and lead time. Cross-docking is common for large or time-sensitive orders where warehouse storage would add unnecessary cost and delay.
Dead Stock
Inventory that has not moved within a defined period and is unlikely to sell, tying up working capital and warehouse space. Dead stock often accumulates from over-purchasing, failed promotions, or product line changes, and requires active management to liquidate or return.
Distributor Rep (Rep Firm)
An independent sales agency that represents multiple manufacturers within a territory, acting as an intermediary between the manufacturer and the distributor. Rep firms are compensated on commission and play a key role in training distributor sales teams on new product lines.
Emergency Order
An unplanned, time-critical order required to prevent production downtime or equipment failure, typically carrying premium pricing and expedited fulfillment. Emergency orders test the speed and reliability of a distributor's sourcing and logistics network.
Inside Sales Rep (ISR)
A sales role that handles inbound quotes and orders primarily by phone or email, as opposed to field reps who visit customer sites. ISRs process high volumes and are the primary users of quoting and order entry workflows, making system speed and accuracy directly tied to their productivity.
Line Card
A distributor's list of manufacturers and product lines they are authorized to sell. Determines product breadth and is a key factor in competitive positioning — a strong line card signals credibility and reduces the need for customers to source from multiple distributors.
MRO (Maintenance, Repair, and Operations)
A category of industrial products — fasteners, safety equipment, tools, lubricants — purchased for facility upkeep rather than for resale or direct production use. MRO purchasing is often decentralized and high-frequency, creating significant opportunity for vendor consolidation and managed inventory programs.
Ship-and-Debit
A pricing program where a distributor sells a product at a lower price than the manufacturer's standard cost, then submits a claim to the manufacturer for the difference. Ship-and-debit programs are common in industrial distribution and require disciplined tracking to ensure claims are submitted and approved accurately.
Technical Sell
A sales motion that requires application knowledge to recommend the correct product — common in industrial distribution where the wrong part causes equipment failure or safety risk. Technical selling differentiates distributors who invest in product expertise from commodity players competing on price alone.
Vendor-Managed Inventory (VMI)
An arrangement where the distributor monitors and replenishes a customer's stock levels automatically, reducing stockouts without requiring the customer to place individual orders. VMI deepens the customer relationship and increases switching costs, making it a strategic tool for locking in long-term accounts.
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