5 Metrics to Track of When Running an Ecommerce Store

If you’re not keeping track of your ecommerce store metrics, you may not know if you’re sinking or swimming. To determine your success, you need to analyze your performance and compare progress over time. With so many performance metrics to monitor, it can get overwhelming to try to make sense of it all.

To help you, we’ve compiled a list of the 5 key ecommerce metrics that you should be focusing your attention on. These metrics are equally as important whether you are trying to take your ecommerce store to the next level or you’re doing your due diligence to buy an existing ecommerce store through a digital exchange. Regardless of how you acquired your store, the figures from the data you collect will give you the big picture of the health of your website, allowing you take strategic measures towards meeting KPI’s.

1. Gross Margin

Also known as gross profit margin, gross margin refers to the percent of revenue that is the actual profit prior to adjusting for operating costs. Running your own business costs money; there are bills to be paid in the form of salaries and overhead. And you’re probably spending on marketing too. Ultimately, these numbers show you if the costs of running your store are more than sales you’re making.

2. Shopping Cart Abandonment Rate

To calculate the Shopping Cart Abandonment Rate, divide the total number of completed purchases by the number of shopping carts created. Take the result and subtract it from 1. Then multiply by 100 for the abandonment rate.

Calculating the Shopping Cart Abandonment Rate in this way allows you to understand the shopping behavior of your store website visitors and customers. This metric is a good indicator of how effective your check-out process is. Alternatively, if an ecommerce store you are looking to purchase has an unnecessarily high Shopping Cart Abandonment Rate, then you might want to reconsider your purchase or at least look at the factors that are causing this.

Oftentimes, many online shoppers abandon their carts when check-out proves to be too complex, or it gives them reasons to suddenly not trust the site. A poor check-out experience may be the reason your sales are so low despite having excellent products.

3. Percent Returning Customers

To calculate the Percent of Returning Customers, divide the number of return customers by the total number of customers and multiply by 100.

Business owners hear all the time how it’s cheaper to get past customers to purchase again than it is to find new ones. Because Percent of Returning Customers is the percentage of repeat customers, you will also have a metric that establishes the level of loyalty your customers have towards your brand.

4. Revenue by Traffic Source

Sources such as referral, paid search, organic search, or social are all used to direct traffic to your ecommerce site. By knowing which traffic source contributes to most of your revenue, you’ll know which channel is the most effective. These metrics are also of high importance when looking to purchase an ecommerce store, as you’ll need to know which gaps in traffic source a site has if you plan on spending money on marketing.

Knowing how these traffic sources work together allow you to identify new trends in consumer behavior that you can leverage. You’ll be saving yourself time and money when you focus on a channel that you know has a reliable stream of customers.

5. Conversion Rate

The conversion rate is perhaps the most important ecommerce metric of all. Conversion rate is the percentage of visitors that land on your website which result in a transaction or sale. To calculate your conversion rate, take the total number of transactions and divide by the number of visits.

The average commerce conversion rates are 1% – 2%. However, to get a more accurate understanding of your conversion rates, you should be asking what your specific conversion rates are for segments such as desktop/mobile, new/return customers, and search traffic vs. other sources.

It’s essential for you to understand your ecommerce store metrics so you can understand the people behind your transactions. This is important whether you are trying to get a better sense of how your own storefront is doing or you are looking to purchase an existing store. When you can recognize the behavior behind the analytics, you will gain a whole new perspective which will allow you to strategize how to run and market your ecommerce store better.

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