Ecommerce Sales Tracking: 15 Important Metrics You Should Check to Track Your Store Performance
Sales tracking is the process of monitoring and analysing the performance of your sales activities. This includes tracking metrics such as revenue, sales volume, profit margins, customer acquisition, and conversion rates.
Sales tracking is an important practice for any type of business, regardless of size or industry, because it provides valuable insights into the effectiveness of the company's sales strategies and helps identify areas for improvement.
In this post, we’ll explain more about eCommerce sales metrics, highlighting 15 eCommerce metrics and KPIs to follow.
The importance of sales tracking
By tracking sales performance, businesses can gain a better understanding of their customers' buying habits and preferences, as well as the effectiveness of their marketing and sales efforts. This enables you to make data-driven decisions about how to allocate resources, improve sales processes, and increase revenue, ultimately, you get the data you need for transforming your business.
Sales tracking can also help businesses identify trends and opportunities in the market. For example, if a particular product or service is consistently performing well, a business may decide to invest more resources into promoting and developing that product. Conversely, if a product or service is not performing well, a business may decide to discontinue or modify it.
What are eCommerce metrics?
eCommerce metrics are a set of key performance indicators (KPIs) that businesses use to track the performance of their online stores. Your eCommerce metrics formula will help you measure the effectiveness of your eCommerce strategies and identify areas for improvement.
There are several benefits to tracking eCommerce metrics for businesses, including:
- Data-driven decision-making - Tracking eCommerce metrics provides businesses with valuable data to help them make informed decisions about their sales strategies, marketing campaigns, and overall business operations.
- Improved profitability - By tracking metrics such as gross profit and customer lifetime value, businesses can identify areas for improvement and make changes to optimise their profitability.
- Increased customer satisfaction - Metrics such as customer satisfaction and return rates can help you identify and address issues that may be impacting the customer experience.
- Better resource allocation - Customer acquisition cost and revenue per visitor are metrics that can help you identify which marketing channels and campaigns are most effective and allocate your resources accordingly.
- Competitive advantage - By tracking metrics and making data-driven decisions, businesses can gain a competitive advantage in the crowded eCommerce space.
- Improved inventory management - The like of inventory turnover is a metric you can use to ensure you are stocking the right products and managing your inventory effectively.
Types of eCommerce financial metrics
Financial metrics are some of the most important eCommerce metrics to track. There are several financial metrics that eCommerce businesses should track to measure their financial health and profitability. Here are some of the most important types of eCommerce financial metrics:
- Gross Merchandise Value (GMV) - GMV is the total value of merchandise sold through an eCommerce website, without taking into account any discounts, returns, or refunds. It's a measure of the overall sales volume of an eCommerce business.
- Revenue - Revenue is the total amount of money a business earns from its sales, after accounting for any discounts, returns, or refunds.
- Gross Profit - Gross profit is the total revenue minus the cost of goods sold (COGS). It measures the profitability of a business's sales before accounting for other expenses.
- Net Income - Net income is the total revenue minus all expenses, including COGS, operating expenses, and taxes. It measures the overall profitability of a business after accounting for all expenses.
- Average Order Value (AOV) - AOV measures the average amount of money a customer spends per order. It's a key metric for understanding customer behaviour and identifying opportunities to increase sales.
- Cost of Customer Acquisition (CAC) - CAC measures the cost of acquiring a new customer. It includes all marketing and advertising expenses related to attracting new customers.
- Customer Lifetime Value (CLV) - CLV is the total amount of money a customer is expected to spend over the course of their relationship with a business. It's a key metric for understanding the long-term value of a customer and identifying opportunities to increase customer loyalty and retention.
By tracking these financial metrics, eCommerce businesses can measure their financial performance and make informed decisions about how to allocate resources and optimise their sales strategies for profitability.
15 Important metrics to track the eCommerce performance
There are a variety of metrics that eCommerce businesses can track to measure their performance and identify areas for improvement. Here are 15 important metrics to track to create your own eCommerce metrics formula:
- Conversion rate - The percentage of visitors who make a purchase.
- Average order value (AOV) - The average amount of money spent per order.
- Cart abandonment rate - The percentage of site visitors who put items in their shopping basket but do not complete their purchase.
- Customer acquisition cost (CAC) - The cost of getting a new customer, including advertising and marketing expenses.
- Return on investment (ROI) - The ratio of revenue generated to the cost of investment, such as marketing campaigns or product development.
- Gross merchandise value (GMV) - The total value of merchandise sold through the eCommerce store.
- Customer lifetime value (CLV) - The total value a customer is expected to bring to the business over the course of their relationship.
- Customer retention rate - The percentage of customers who make a repeat purchase.
- Revenue per visitor (RPV) - The average amount of revenue generated per visitor.
- Site traffic - The number of visitors to the eCommerce store.
- Cost per click (CPC) - The cost of each click on a paid advertisement.
- Bounce rate - The percentage of people who abort your site after viewing just one page.
- Time on site - The amount of time visitors spend on the eCommerce website.
- Inventory turnover - The rate at which products are sold and replaced within a certain period of time.
- Customer satisfaction - The level of satisfaction of customers with the products and services provided by the eCommerce store.
By tracking these metrics, eCommerce businesses can gain insights into their performance, make data-driven decisions, and optimise their strategies for increased sales and profitability.
Importance of ecommerce metrics for your business
All in all, tracking eCommerce sales metrics and the various types of eCommerce financial metrics mentioned is critical for the success of any online business.
By tracking metrics such as conversion rate, average order value, and customer acquisition cost, businesses can gain insights into their performance, identify areas for improvement, and optimise their strategies for increased sales and profitability.
With the increasing competition in the eCommerce space, tracking these metrics can give businesses a competitive edge and help them stay ahead of the game.
If you regularly monitor these 15 important metrics, you can ensure you are on track to achieving your sales and growth targets.
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