When running an e-commerce business, it’s important to keep an eye on your performance to see how your business is doing. E-commerce metrics are a big part of this.
There are a number of different e-commerce key performance indicators (KPIs) that help your e-commerce business get a bird’s-eye view of its success. In this article, we are going to walk you through the top 15 Key metrics you need to track on your e-commerce store according to Davie Fogarty, the CEO, and Founder of The Oodie, a 9-Figure e-commerce brand.
Davie also owns a bunch of other 7-figure e-commerce brands including Pupnaps, Calming Blankets, and The Australian Furniture Warehouse which all generate over $200 000 in sales per month. And below are the things he tracks for his brands doing over $200 000 in sales a month.
1. MER or Marketing Efficiency Ratio (Track Daily)
This simple calculation is revenue/ad spend. It is your guiding metric to ensure you are profitable with your advertising variable cost. Davie plots his MER like below:
2. Gross Margin (track daily)
This is always good to watch daily especially if you have lots of SKUs and test lots of offers. Ensure your COGs data is set up properly in Shopify and you can easily view it in Shopify or export it to another dashboard.
3. Revenue forecasts vs. actuals (weekly or monthly meeting)
This is important to ensure your marketing, ops, and finance teams are aligned. If you are down or up on the forecast, why? This will ensure you are allocating capital correctly and will allow you to forward plan resources.
4. Stock position (weekly or monthly)
This needs to be tracked on an SKU level. If an SKU changes in demand quickly, you need to spot that change early and adjust your inputs or future orders. If you aren’t good at Excel, you can use tools like Inventory Planner.
5. Cashflow forecasts (weekly or monthly)
If you are starting out, chances are your accountants and bookkeepers might not want to do this report. It takes time, however, it is probably the most important thing they can put together. Make sure your taxes are accounted for.
6. Content output volume and effectiveness (daily or weekly)
If you are running the majority of your ad spend through Facebook or TikTok, chances are your feedback loop of your creative team and media buyer is your biggest lever (aside from the product).
7. AOV, EPV, and conversion rate tests & wins (weekly or monthly)
This includes new funnels and split tests (offers, angles, and designs).
8. Email % of sales (monthly)
You want to know how your campaigns and your flows are tracked individually as a percentage of revenue. It is good to pair this with a monthly report of what split tests were done.
9. Customer Service cost per service (monthly)
Customer service is important to building a brand, but you can’t let expenses run wild. Calculate it via customer support spend/number of tickets. You can also calculate the cost of support per order via spend/number of orders.
10. Average resolution time (monthly)
This is a good indication of efficiency changes or being under-resourced. Unfortunately, outliers can blow this metric quite quickly.
11. Review summary (monthly)
This is just as important as NPS in my opinion because fluctuations on trusted review sites like Trust Pilot can drastically affect conversion rate and your brand equity.
12. Net Promoter Score — NPS (monthly)
This is an easy metric to measure and gets your customer service team excited. Send surveys after the person's problem has been resolved.
13. SEO movement (monthly)
This won't be applicable to everyone, but if you have an SEO program running, it should be moving in the right direction monthly as it is a long-term play.
14. Summaries via a report (monthly or weekly)
You need your agencies and each department to provide weekly or monthly recaps of what they did, wins, and losses. This can be shared throughout the company and ensure learnings are shared.
15. Fulfillment effectiveness (weekly or monthly)
It is important to keep your 3PLs accountable. You need to track dispatched on time and have some form of accountability for their stock management and what they are billing you.
Conclusion
The good news is that as an entrepreneur, you don’t need to keep lots of tabs to track every number to grow your store. Davie recommends using a tool called Klipfolio to create the tracking dashboards when possible. If not, then Excel might do the trick.
