There are a lot of eCommerce KPIs to keep track of. If you want a successful online business, this and other metrics are important. But what are these crucial eCommerce KPIs?
We’ve summarized the ones to keep an eye on into a list of 25 with brief descriptions of each. We’ve also included formulas so you can start applying these calculations.
What Are Key Performance Indicators (KPIs)?
eCommerce KPIs are values that you track to determine the success or failure of a particular aspect of your online business’s operation.
Why Are Ecommerce KPIs Important?
KPIs tell you how far along you are to reaching a set objective. These KPIs are rarely one-dimensional numbers. They often work in tandem with one another to get a much more fleshed out picture of your overall performance in an area.
25 Must Track Ecommerce KPIs
1. Conversion Rate
This measures in percentages how many people complete a particular action. This can refer to the completion of a customer journey like when a potential customer becomes a paying consumer. These actions include subscribing to a service, purchasing a product, visiting a website or landing page, and others.
Conversion Rate = # of conversions / # of total interactions x 100
2. Average Order Value (AOV)
Average Order Value measures the average monetary value of orders placed by a purchasing customer on your web store or app. This can measure the average amount spent by an individual, segmented audience, or customers as a whole. You can also factor in specific time periods. This metric can reveal patterns in consumer behavior and inform customer retention and acquisition strategies.
AOV = Revenue / Total Orders
3. Customer Acquisition Cost (CAC)
Customer Acquisition Cost refers to the amount of money and resources (expressed in monetary values) spent on getting new customers within a timeframe. This includes the cost of market research, advertising, sales, and other marketing efforts needed to bring a prospect to conversion.
CAC = Cost of Sales and Marketing / # of Newly Acquired Customers
4. Customer Lifetime Value (CLV)
Customer Lifetime Value is on this list of important KPIs for eCommerce because it helps you gauge the long-term value of a customer. It helps you know how much you stand to earn from a customer within the duration of your relationship. This then informs you which individual or group spends more and what strategies you should implement to keep them with you for as long as possible. Average Order Value is key to calculating CLV.
CLV (Basic Formula) = (AOV x # of estimated purchases within a certain timeframe) x # of months or years the customer is expected to remain with the business.
5. Cart Abandonment Rate
Shopping cart abandonment rate measures in percentages the number of orders or “carts” created but never checked out or fully converted.
Cart Abandonment Rate = (# of completed orders / # of total orders or carts created) – 1 x 100
6. Return on Ad Spend (ROAS)
ROAS measures how much income you earn directly connected to your advertising efforts relative to how much you spent on those ad campaigns.
ROAS Ratio = Revenue from Ad Campaign / Cost of Ad Campaign
7. Gross Profit Margin
Gross profit is the amount of money left over after you take out all the direct costs of creating a product. This is also known as the Cost of Goods Sold (CoGS). Gross Profit Margin is measured as a percentage.
Gross Profit Margin = [(Revenue – Cost of Goods Sold) / Revenue] x 100
8. Net Profit Margin
The Net profit is the amount of money left over after gross profit calculations, business expense deductions and net income calculations. Net income is calculated as (Gross Revenue – Expenses). It is also represented as a percentage.
Net Profit Margin = (Net Income / Sales) x 100
9. Website Traffic
This refers to the number of sessions or visits your website receives through referral links, SERPs, social media channels, etc. There are a number of ways to track web traffic whether daily total visits or visits from specific channels. You can use analytics tools like Google Analytics or SEMRush to make this easier. Website Traffic Growth rate measures in percentages the number of visitors you get on a month over month or year over year basis.
Website Traffic Growth Rate = [(# of sessions this month or year – # of sessions last month or year) / # of sessions last month or year] x 100
10. Bounce Rate
The Bounce rate refers to the percentage of site visitors that land on a page and leave without clicking a link, converting, or going to a second page.
Bounce Rate = # of One Page Visits / # of Total Visits
11. Click-Through Rate (CTR)
Click-through rate measures in percentages the number of times something is clicked relative to the number of times it is shown. This is commonly used for ad campaigns where it measures the number of times an ad is clicked relative to the number of ad impressions (number of times an ad is shown).
CTR = # of Times Clicked / # of Times Shown x 100
12. Cost per Click (CPC)
CPC is a metric connected to Pay-Per-Click or PPC advertising. CPC is the amount an advertiser pays every time someone clicks on their ad displayed on SERPs or search engine results pages. The payment is based on the price of the keyword or phrase used by searchers.
CPC = Cost of Ad / # of Clicks
13. Average Session Duration
This refers to the average amount of time a person spends on your website, app, etc. in a single session. A session lasts until you close the site or browser.
Average Session Duration = Duration of All Sessions / # of Sessions per Time Period
14. Repeat Customer Rate
The Repeat Customer Rate measures in percentages the number of customers that purchase from you a second time within a specific timeframe.
Repeat Customer Rate = (# of Repeat Customer / Total Customers) x 100
15. Email Open Rate
This measures in percentages the number of times an email is opened by a recipient targeted by an email marketing campaign. This is measured against the total emails delivered.
Email Open Rate = (# of Emails Opened / # of Emails Sent Within a Campaign) x 100
16. Email Click-Through Rate (CTR)
Both CTR and Email CTR are eCommerce KPIs that measure the percentage of people that engage with links. With Email CTR it specifically measures how many times email recipients click on links within your emails.
Email CTR = (# of People Who Have Clicked a Link / Total Emails Sent Within an Email Campaign) x 100
17. Social Media Engagement
Social Media is a valuable channel for marketing, finding and building audiences, and improving your presence online. As such, there are several social media KPIs to track engagement. These include shares, reactions, favorites, comments, impressions, conversions, and more.
18. Social Media Follower Growth
This tracks how many new followers you gained in a set period. This is often used to measure the effectiveness of ad campaigns, content, schedule, and other factors.
Follower Growth Rate (in Percentage) = (# of Followers at the Beginning of a Set Period / # of Followers at the End of the set Period) x 100
19. Average Customer Rating
Ratings is one of the most important KPIs for eCommerce. They signal to potential customers the trustworthiness and quality of what you offer. This is usually measured on a scale of 1 to 5. To calculate this, you can assign point values to each star rating. For example, a 5-star rating is 5 points.
Average Rating = Added Point Values of Total Ratings / # of Possible Ratings (which would be 5 for a 5-star rating as exemplified above.)
20. Product Page Conversion Rate
This measures the rate of conversion of not only those who visit your product pages but also purchase products.
Product Page Conversion Rate = (# of Conversions / Total Page Visitors) x 100
21. Inventory Turnover Rate
Inventory turnover refers to the rate that inventory is replaced. This measures how efficiently a company sells their inventory over a period of time. This is found by first calculating COGS (Value of Inventory at Start of Period + Expenses – Value of Inventory at End of Period) and Average Inventory Value [(Value of Inventory at Start of Period + Value of Inventory at End of Period) / 2].
22. Fulfillment and Shipping Time
There are several order fulfillment KPI metrics to take into consideration. The rate at which orders are shipped and fulfilled on time and the accuracy of orders are some of the most important ones to consider.
On-Time Shipping or Fulfillment Rates (in Percentages) = (# of On-time Shipments or Order Fulfillments / Total Orders Shipped or Fulfilled Over the Same Timeframe) x 100
23. Customer Satisfaction Score (CSAT)
Sellers can acquire these scores through customer feedback surveys. You would usually present these surveys at the end of a customer journey. You would typically pose it as a question, like “How satisfied are you with your experience with us/this product/this service/this website/ etc. ?”. The customers then answer on a scale from satisfied (4-5) to dissatisfied (1-3).
CSAT Formula (in Percentage) = (# of Satisfied Customers / Total # of Answers) x 100
24. Number of New Customers
This KPI is very similar to conversion rate except it only applies to first-time buyers. This also takes time period into consideration.
Number of New Customers = (# of First-Time Buyers / # of Total Orders) x 100
25. Abandoned Cart Recovery Rate
The abandoned cart recovery rate is the last item on our list of KPIs eCommerce sellers should track. This measures the number of abandoned carts, or the orders that customers picked back up and fully converted. Sellers usually accomplish this through targeted email reminders.
Abandoned Cart Recovery Rate = (Total Abandoned Carts / # of Salvaged Orders) x 100
Frequently Asked Questions on eCommerce KPIs
1. How can you measure and improve customer retention in e-commerce?
Provide the best customer experience possible. If they have a negative experience, make sure that the customer service needed to resolve the issue is a positive experience.
2. How often should you review and analyze e-commerce KPIs?
Regularly. We recommend at least once a month or even more depending on how fast business is going.
What Is EcomBalance?
EcomBalance is a monthly bookkeeping service specialized for eCommerce companies selling on Amazon, Shopify, Ebay, Etsy, WooCommerce, & other eCommerce channels.
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You’ll have your Profit and Loss Statement, Balance Sheet, and Cash Flow Statement ready for analysis each month so you and your business partners can make better business decisions.
Interested in learning more? Schedule a call with our CEO, Nathan Hirsch.
And here’s some free resources:
- Monthly Finance Meeting Agenda
- 9 Steps to Master Your Ecommerce Bookkeeping Checklist
- The Ultimate Guide on Finding an Ecommerce Virtual Bookkeeping Service
- 6 Reasons Accurate Ecommerce Accounting is Crucial for Your Business
- Accounting Basics 101: What Small Business Owners Must Know
- Generally Accepted Accounting Principles (GAAP) Cheat Sheet
- How to Read a Balance Sheet & Truly Understand It
Final Thoughts on Ecommerce KPIs
There you have it! Hopefully this list of KPIs for eCommerce sellers to track will level up the way that you do business. This isn’t an exhaustive list. However, these are metrics that you can start measuring. Then you can gain valuable insights that will fuel your next great business decision.
