Chapter 2 Core Concepts & Glossary
This is the chapter to read first if you are new. Master these terms and every later chapter becomes easy.
2.1 Product Hierarchy
| Term | Meaning |
|---|---|
| Category | Product category, the top grouping of products |
| Brand | Brand the product belongs to; can have an annual target |
| Brand Category | Sub-category under a brand |
| Product (SPU) | A product. In this system the smallest manageable unit is the SKU — there is no separate SPU parent |
| SKU (spec) | Stock-keeping unit, the smallest buy/sell unit, with a unique code |
| SKU code | Business-unique code; the join key across stock / orders / finance |
In this system a "product" is a SKU. Creating a product = creating a SKU.
2.2 Pricing
| Price | Where maintained | Notes |
|---|---|---|
| Purchase price | Entered when creating a supply-chain order | Follows the order; used as cost at settlement |
| Sale price | Product detail → Price | Standard price, written to the price table |
| Discount price | Product detail → Discount | Promo price, selectable when creating a sale order |
| Historical price | Auto-recorded by system | Trace past price changes per SKU |
2.3 Trading Parties
- Supplier (and supplier category): the source of goods; you create supply-chain orders to suppliers.
- Merchant / Store (and merchant category): the downstream buyer; you create sale orders to merchants.
A merchant is not an internal user. Merchants log in via the Merchant Purchase Portal (Chapter 9).
2.4 Document Types
| Document | Meaning |
|---|---|
| Supply-chain order | Purchase order to a supplier (10-state) |
| Sale order | Sales order to a merchant (7-state) |
| Return order | Sales return document (4-state) |
| Stock-in / Stock-out doc | Generated by warehouse in/out operations |
| Transfer doc | Generated by cross-warehouse transfer |
| Invoice (AP / AR) | Payable / receivable invoice, registered in finance |
| Tax invoice | Tax document, collected in tax-invoice management |
2.5 Five-dimension Stock
Stock is not a single number. It is split along five dimensions:
st=>start: Stock of one SKU
a=>operation: Dim 1 - SKU spec
b=>operation: Dim 2 - Warehouse
c=>operation: Dim 3 - Expiry date / batch
d=>operation: Dim 4 - Source supply-chain order
f=>operation: Dim 5 - Shelf position
e=>end: One precise stock unit
st->a->b->c->d->f->e
A specific stock record = one unique combination of SKU × warehouse × expiry × source supply-chain order × shelf position.
That is why the same SKU can show different quantities in different warehouses, at different shelf positions, or with different expiry dates.
2.6 Three Stock Values
st=>start: Physical stock
op=>operation: Subtract sale-occupied (frozen)
io=>inputoutput: Available stock
cond=>condition: Enough available?
ok=>end: Accept order (freeze qty)
no=>end: Reject / reduce qty
st->op->io->cond
cond(yes)->ok
cond(no)->no
| Value | Meaning |
|---|---|
| Physical stock | Actual quantity physically in the warehouse |
| Sale-occupied (frozen) | Quantity locked by sale orders not yet shipped |
| Available stock | Physical − Occupied = what you can still promise to a new order |
When a sale order is confirmed, available stock drops immediately (the quantity is frozen). It is released after stock-out.
2.7 Snapshot
When you create an order, the product information (name, price, volume, etc.) on that order line is frozen as a snapshot. Later changes to the master product (e.g. a price edit) do not change already-created orders.
This protects historical orders: the price you agreed at order time stays on the order, even if the catalog price changes later.
2.8 State Machines
Every core document has a state machine — an ordered set of states, moved forward by business actions. These three are the most important in the manual.
Supply-chain order (10 states)
st=>start: 0 Applied (draft)
sub=>operation: 1 Pending approval
ap=>condition: Approved?
s2=>operation: 2 Approved
s3=>operation: 3 Ordered
s4=>operation: 4 Shipped
s5=>operation: 5 Arrived port
s6=>operation: 6 Cleared customs
s7=>operation: 7 In transit
s8=>inputoutput: 8 Stocked in (partial batches allowed)
e=>end: 9 Settled (freight allocated, cost written back)
st->sub->ap
ap(yes)->s2->s3->s4->s5->s6->s7->s8->e
ap(no)->st
Sale order (7 states)
st=>start: 0 Applied (draft)
sub=>operation: 1 Pending approval
ap=>condition: Approved?
s2=>operation: 2 Approved
s3=>inputoutput: 3 Ordered (stock frozen)
s4=>operation: 4 Stocked out
s5=>operation: 5 Delivered
e=>end: 6 Settled (payment cleared)
st->sub->ap
ap(yes)->s2->s3->s4->s5->e
ap(no)->st
Return order (4 states)
st=>start: 0 Returning
s1=>operation: 1 Stocked back (warehouse)
s2=>operation: 2 Price confirmed
e=>end: 3 Refunded (finance)
st->s1->s2->e
Sale settlement (state 6) requires the order stocked out (≥4) and its linked supply-chain order settled (state 9). See 8.5 / 11.7.
2.9 Cross-border Specifics
| Term | Meaning |
|---|---|
| Container / Container no. | Shipping container; unique tracking id |
| Port arrival | Container arrives at destination port |
| Customs clearance | Released by customs |
| Transit | Moving from port to warehouse after clearance |
| Volume (m³) | Per-unit volume; basis for freight allocation & loading |
| Freight allocation | Freight split to each SKU's cost by volume ratio |
| Loading calculation | Estimate how much fits, by box type & available volume |
Volume is the most error-prone field with the worst consequences — freight allocation and loading both depend on it. Fill the real per-unit volume (m³).
2.10 Finance Concepts
- Finance type: payment method (cash, bank transfer, a payment channel…). Every payment/receipt links to one.
- Accounts Payable (AP): money owed to suppliers (from supply-chain orders).
- Accounts Receivable (AR): money merchants owe us (from sale orders).
- Settlement: confirm cost (supply) or revenue (sale), write back to records.
- Turnover & annualized return: derived from sale settlement (profit, turnover rate, annualized return).
2.11 Tax Concepts
Tax is computed automatically by:
- the merchant's region / tax zone (tax rate), and
- the SKU's has_tax flag (whether tax applies).
Tax types include GST / PST / QST / HST, configured per province in System Admin → Region & Tax-rate Management.
Get the tax zone right when creating a merchant — wrong zone = wrong tax everywhere.
2.12 Timezone & Currency
- Business timezone: transactions are timestamped in the system's business timezone.
- Currency: multi-currency is supported; exchange rates are maintained in System Admin → Exchange-rate Query and used for foreign-currency trades.
Chapter Summary
- Product hierarchy: category / brand / SKU (SKU is the smallest unit).
- Pricing: purchase (on order) / sale / discount (on product detail) / historical (auto).
- Parties: supplier (purchase) and merchant (sale).
- Stock = SKU × warehouse × expiry × source order × shelf; three values: physical / occupied / available.
- Snapshot freezes order-line info; state machines drive documents forward.
- Cross-border: container / customs / transit / volume / freight allocation.
- Finance: AP/AR, settlement, turnover. Tax: by region rate + has_tax.
Next: Module Map & Relationships — where each concept lives in the menu.