10 Numbers Every Ecommerce Business Must Track

Most ecommerce storeowners are great at developing sales and streamlining operations. But when it comes to improving how much money the company generates they hope and pray it all works out.

But money is king. You must have money to keep in business and grow.

In this post, I will review 10 numbers to monitor monthly to generate more money.

The 10 numbers don’t mean much by themselves. Place them into context to offer a complete financial picture. Monitor each number monthly and compare it to (a) the previous month, (b) the exact same month last year, and (c) your target or price range.

  • Ahead month. Compare each number to the previous month to spot trends and changes.
  • Same month last year. Ecommerce earnings are often seasonal. Assessing the amounts against the same month last year will offer a meaningful comparison.
  • Monthly goal or Price Range. Set a goal for all those amounts on the list. Then compare the budget to actual performance.

10 Essential Ecommerce Numbers

Sales and yields. Track sales and yields (a) by major product line or class and (b) by advertising source.

Take an example of a hypothetical online bike shop. From the table below, notice that the store generated earnings in January of $18,590. That is an improvement over January of this past year, which generated sales of $15,400. It is also more than the budgeted amount of $14,410.

January Sales Ahead Year
Actual
Present Year
Target
Present Year
Actual
Bicycles $9,568 $10,000 $11,258
Components $4,450 $5,000 $6,840
Accessories $392 $400 $492
Total Merchandise Sales $14,410 $15,400 $18,590

Returns should also be monitored as a percentage of sales for each product line. Any gain in the proportion of returns has to be addressed.

Tracking sales by the advertising source helps to evaluate advertising and promotional campaigns.

January Sales by
Advertising Source
Ahead Year
Actual
Present Year
Actual
Google AdWords $2,870 $3,461
Bing Ads $2,460 $3,077
Google Organic $3,280 $3,077
Bing Organic $1,640 $1,923
Email List $820 $1,154
Social Media $410 $769
Referral Partners $820 $1,538
Total Sales by Marketing Source $12,300 $14,999

Number of orders. Tracking the amount of orders by product line and by marketing source is critical because the monetary value assigned to an arrangement can skew results.

By way of instance, say your store generated $10,000 in earnings on two different days. The first day generated one order of $10,000 and on the next day generated 100 orders of $100.

Tracking the amount of orders supplies critical detail. Additionally, it is helpful for computing different metrics like conversion rate, below.

Average order value. As soon as you monitor sales and the amount of orders, you can compute your average purchase value, that’s the normal amount of every sale. The intention is to lure your customers to buy more items per trip.

Average Purchase Value = Revenue ÷ Number of Orders

Cost of earnings. The cost of sales is (a) cost of the solution and (b) other direct costs involved to process the order, such as credit card charges and shipping.

Track the cost of sales as a percentage of total sales and compare to your finances, the previous month, and the exact same month this past year.

January Cost
of Revenue
Ahead Year
Actual
Present Year
Target
Present Year
Actual
Product (Bicycles) 40.0percent 40.0percent 37.2percent
Product (Components ) 30.2percent 30.0percent 22.0percent
Product (Accessories) 6.8percent 7.0percent 10.7percent
Merchant Fees 2.4percent 3.0percent 2.0percent
Shipping Labels 4.3percent 5.0percent 4.0percent
Average Cost of Revenue% 40.4percent 41.2percent 35.0percent

Gross profit margin. Gross profit is only sales minus direct costs. Compute the gross profit margin by dividing gross profit by sales.

Gross Profit Margin = Gross Profit ÷ Earnings

This percentage tells you how much margin, or profit, each item produces.

Track the gross profit margin for the whole shop and for each item line. Your purpose is to increase the gross profit margin for each product monthly. Decreases should be carefully examined.

Visits by marketing supply. Before someone makes a purchase, you must first get her into the shop. Thus it is important to track the amount of visits by marketing supply. This will monitor how each advertising source performs in terms of generating traffic.

Conversion rate. The conversion rate is simply the proportion of visitors that buy your products. Track your conversion rate for the whole shop, and by marketing source.

To calculate the conversion rate for your shop, divide the amount of monthly orders from the amount of monthly visits.

Conversion Rate = Number of Orders ÷ Total Visits

To calculate the conversion rate by advertising supply, divide the amount of orders from every marketing source by the amount of visits for each advertising supply.

The intention is to improve your store’s overall conversion speed.

January Conversion
Rate by Source
Ahead Year
Actual
Present Year
Actual
Google AdWords 2.92% 3.21%
Bing Ads 3.73percent 4.42percent
Google Organic 2.11percent 1.81percent
Bing Organic 2.35percent 2.54percent
Email List 7.87percent 7.32percent
Social Media 4.35percent 3.07percent
Referral Partners 3.73percent 6.25percent
Conversion Rate (entire store) 2.85percent 3.07percent

Marketing costs. Even if you sell the exact same product to two clients, your net profit for every order might not be exactly the same. It is dependent upon how much cash you invested to attract each customer to your shop.

Thus it is important to measure all advertising costs by the source as a percentage of earnings, to monitor how each source is doing.

January Advertising
Costs by Source
Prior Year Actual Current Year Target Current Year Actual
Google AdWords 34.1percent 35.0percent 29.7percent
Bing Ads 36.2percent 35.0percent 31.1percent
Google Organic 30.5percent 30.0percent 32.5percent
Bing Organic 61.0percent 30.0percent 52.0percent
Email List 0.0% 30.0percent 0.0%
Social Media 7.1percent 10.0percent 5.3percent
Referral Partners 9.1percent 10.0percent 6.2percent
Total Marketing Costs by Source% 32.3percent 27.5percent

Overhead expenses. Overhead costs, such as rent and payroll, are largely fixed. These expenses have to be paid regardless of sales volume.

But you should spend money in an overhead cost only if it is going to help create more profit. Otherwise, there’s absolutely no point.

Net profit. Net profit is the amount of money that’s left over from sales when you’ve paid all costs and expenses. This is the best scorecard for your company. Track the net profit monetarily and as a percentage of earnings.

January Net Profit
Calculation
Ahead Year
Actual
Present Year
Target
Present Year
Actual
Merchandise Sales $14,410 $15,400 $18,590
Merchandise Returns $(959) $(1,128) $(1,153)
Merchandise Cost $(4,845) $(5,116) $(5,376)
Other Costs of Sales $(974) $(1,232) $(1,129)
Marketing Costs $(3,974) $(4,124)
Payroll Expenses $(1,725) $(2,000) $(2,150)
General & Admin Expenses $(895) $(500) $(956)
Net Gain $ $1,038 $5,424 $3,702
Net Profit% 7 percent 35 percent 20 percent

A Complete View

In my experience, business owners frequently track a lot of numbers or insufficient. Owners that monitor too many numbers sometimes become overwhelmed and just stop the process because they do not see the value.

Owners that don’t monitor enough end up basing their choices on just a couple of metrics, such as gross earnings or money in the bank. Neither offers a complete picture of the company. Thus these owners wind up making bad decisions.

However, the 10 numbers above provide a comprehensive view. Track them every month. As time passes, your financials will come alive. You will learn which areas of your company are working and which need improving. You may make decisions that enhance profit and earn money.

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