E-commerce KPIs You Need to Track
There are several categories of KPIs that you can pull from to track and measure the performance of your e-commerce business. Choosing which to monitor and when can be overwhelming. Here are a few things to keep in mind before you get started.
Start small, with something that can be accomplished in a reasonable amount of time and with the least amount of resistance.
Choose based on your business goals, i.e., boosting sales, streamlining operations, improving. customer service.
Given that you're in the business of selling, some common e-commerce KPIs are Net and Gross Profit, Average Order Value, Website Traffic and Conversion Rate. If you're looking to uncover how your business is REALLY doing, these KPIs are straightforward and easy to track consistently.
Gross and Net Profit Margin
Gross: Revenue minus the cost of goods sold (expenses directly related to the sale), divided by revenue, multiplied by 100.
Net: Find your net profit by subtracting all operating costs from your gross profit. Divide that by your total revenue; multiply by 100.
Average Order Value (AOV)
The average spent per order. The formula is, Total Revenue / Number of Orders.
Website Traffic and Conversion Rate:
Track the number of visitors to your website or social media page. This can indicate the
effectiveness of your online presence and marketing efforts. Of those visitors to your website, how many convert to customers?
When you have the data from these important metrics you make strategic decisions towards your goals.