David Cummings on Startups

Three Critical Metrics for an Ecommerce Site

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David Cummings

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A friend of mine is starting an ecommerce company so I asked a fellow EO member that owns an e-tail site for any advice. He mentioned SEO, customer service, and more as important to success along with three critical metrics. The metrics aren’t hard but they are incredibly important.

Here are the three critical metrics for an ecommerce site:

  • Unique visitors to the site (web traffic)
  • Conversion rate of unique visitors to customer (average is 1.5% – 2.5%)
  • Average order per customer (the dollar amount spent by the typical customer)

In fact, with these three metrics you can figure out the revenue of an ecommerce company quickly. The metrics aren’t particularly difficult but they drive the business.

What else? What are some other critical metrics for an ecommerce site?

Comments

3 responses to “Three Critical Metrics for an Ecommerce Site”

  1. Adam Avatar
    Adam

    Cost of customer acquisition and customer lifetime value are two other important metrics.

    Reply
  2. Mike Dowdle Avatar
    Mike Dowdle

    Have to disagree with you here. Gross Profit should be #3 on your list. Revenue number is misleading if you’re not able to drive a healthy gross profit. Calculating your profit after inventory cost, bank transaction fees, shipping and keyword costs gives the clearest picture of whether you can attract the visitors and conversion rates to make a profitable business.

    Reply
  3. Kashyap Avatar
    Kashyap

    Three metrics are spot on if you are only concerned with company’s revenue otherwise in addition to what Mike & Adam has mentioned, one should also consider factors such as 1) repeat purchases 2) shopping cart abandon rate 3) CSAT score 4) marketing expense etc.

    Reply

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