10 Key Metrics for Tracking and Improving eCommerce Profitability

The world of eCommerce is a battlefield where victory is hinged on razor-thin margins. Sure, generating sales is important, but true success lies in understanding what drives revenue, what eats into it, and where you can optimise for a healthier bottom line.

Enter eCommerce metrics. By diligently monitoring key performance indicators (KPIs), businesses can glean valuable insights into customer behaviour, operational efficiency, and marketing effectiveness. These insights pave the way for making data-driven decisions that fuel profitability.

We’ve crunched it down to 10 key metrics that every eCommerce brand should track if you want to improve profitability:


1. Conversion Rate (CVR%)

This metric measures the percentage of website visitors who complete a desired action, such as making a purchase. A high conversion rate indicates a well-designed website and effective marketing efforts.

2. Average Order Value (AOV)

AOV represents the average amount a customer spends per order. Strategies like product bundling and upselling can increase AOV, leading to higher revenue per transaction.

3. Customer Acquisition Cost (CAC)

CAC measures the average cost of acquiring a new customer. This includes marketing spend, advertising costs, and sales team expenses. Analysing CAC helps determine if your customer acquisition efforts are sustainable. For a deeper dive into CAC, check out this informative guide on "Customer Lifetime Value (CLV) Definition" (Qualtrics).

4. Customer Lifetime Value (CLV)

CLV represents the total revenue a customer is expected to generate throughout their relationship with your business. Making efforts to retain existing customers who have a high CLV can be more cost-effective than constantly acquiring new ones.

5. Shopping Cart Abandonment Rate

This metric tracks the percentage of website visitors who add items to their cart but fail to complete the purchase. Identifying reasons for cart abandonment, such as high shipping costs or a complex checkout process, allows you to address these issues and recover lost sales.

6. Gross Profit Margin

This metric reveals the profitability of your products after accounting for the cost of goods sold (COGS). Analysing gross profit margin helps identify products with low margins that might need price adjustments or cost reductions.

7. Net Promoter Score (NPS)

NPS measures customer loyalty and satisfaction. By asking customers how likely they are to recommend your brand to others, you gain valuable insights into your brand perception and can implement strategies to improve customer experience.

8. Customer Churn Rate

This metric tracks the percentage of customers who stop doing business with you within a given period. Understanding customer churn helps you identify areas for improvement in customer retention strategies.

9. Return on Ad Spend (ROAS)

ROAS measures the advertising revenue generated for every dollar spent on advertising campaigns. Analyzing ROAS allows you to determine the effectiveness of your marketing efforts and optimise spending for maximum return.

10. Inventory Turnover

This metric tracks how often your inventory is sold and replaced within a specific period. A healthy inventory turnover indicates efficient inventory management, reducing storage costs and the risk of holding onto outdated products.

By closely monitoring these key metrics, eCommerce businesses can gain a deeper understanding of their financial health and identify areas for improvement. Analysing trends over time allows you to measure the effectiveness of implemented strategies and make data-driven decisions on where to go next.

Remember: The most important metrics for your business will depend on your specific industry, target audience, and business goals. Some of these may be more important to your brand specifically – or you might be able to add another 10 on top of these that you track every day! There's no one-size-fits-all approach to tracking eCommerce metrics.

However, by focusing on these 10 proven key performance indicators, you'll be well on your way to gaining valuable insights that drive profitable growth for your brand in the dynamic world of eCommerce.

Want more? These resources are helpful for exploring how to boost your store's success:

  • Marketing Automation explores strategies to optimise customer journeys and potentially increase AOV and CLV.
  • Towards Data Science dives into the world of Machine Learning, a powerful tool that can be leveraged to analyse vast amounts of eCommerce data and uncover hidden patterns that can inform strategic decision-making.

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