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The Most Important KPIs for an Ecommerce Business

The Most Important KPIs for an Ecommerce Business

The most important KPIs for an ecommerce business. As an ecommerce store owner, your goal is to grow your brand and generate more revenue. Marketing can help you achieve both. However, it is crucial to take stock of your current performance in order to decide where to spend your time and money, as well as find areas to improve. This is accomplished by zeroing in on the important KPIs for any ecommerce business.

KPIs, or key performance indicators, are essentially metrics that you can track to know your business’ current state of affairs. They can help you figure out where you stand in comparison to your goals and where to prioritize your time.

Let’s take a look at some of the most important KPIs for an ecommerce business to track and analyse.

Traffic KPIs

Website Traffic

Your website traffic is one of the most basic and important KPIs for your ecommerce business. It must be monitored as frequently as possible to track the effects of your marketing efforts. While it’s great to look at your overall website traffic, you should consider looking into the traffic from each campaign you’re running too.

For this, you’ll need to insert UTM parameters into your URLs. In addition to that, you’ll have to track each UTM parameter separately. If you have multiple campaigns running at the same time, it can be difficult to monitor multiple UTM parameters simultaneously.

To make this process simpler, you can use UTM.io. Not only will you be able to build individual UTMs, but you will also be able to store past links and create templates to build links faster and with better accuracy. This is especially important if you are creating a lot of campaign links or operate a large or remote team. Syncing UTM parameters can be difficult, but it is critical to have good campaign data.

Mobile Traffic

Over 48% of all web traffic originates from mobiles. This means there’s a high chance that nearly half of your traffic could be coming from smartphones.

Due to this reason, mobile traffic is an important KPI for your ecommerce business, and you must measure it.

It can give you an idea of the percentage of your traffic to your website that originates from mobiles. You must also ensure that your store is optimised for mobiles to ensure that your customers have a seamless shopping experience.

Pay Per Click (PPC) Traffic

If you’re running PPC ads for your ecommerce business, you must track this KPI. PPC ads can be fairly expensive to run, and if you’re not getting enough traffic from them, you might be wasting your marketing budget.

By monitoring your PPC traffic, you can figure out the performance of your ads. Based on this KPI, you can make changes to your ads and increase the incoming traffic to your ecommerce business.

Time on Site

If your ecommerce business is getting loads of visitors, but they’re in your store for a short duration, you may be staring at a problem. To find out, you need to track the time on site. Through this KPI, you can figure out the duration of your customers’ visits on your website.

The average time spent by your customers on your website is a clear indicator of your website’s capacity to engage your customers. If this number is low, you need to dig further. Using UTM parameters, you should be able to find out where these visitors are coming from and from what campaign.

They may be clicking through an ad or other piece of content and landing on a page that is not relevant. Make some small tweaks to the landing page to match these ads more closely and you can drastically improve engagement and conversion.

Bounce Rate

The bounce rate is a great indicator of the performance of your ecommerce business’ landing page. This KPI for ecommerce businesses measures the number of visitors who left your website after visiting only one page.

If your bounce rate is high, you should look into the factors that may be prompting them to leave your website for another. You might need to optimise your landing page design to improve this rate.

New Customers vs. Returning Customers

Through this KPI for ecommerce business, you can figure out whether the majority of your customers are new or returning. Typically, a returning customer is more valuable than a new one as they can help drive loyalty, word-of-mouth marketing, and more.

One of the most common mistakes that business owners make is that of focusing on getting new customers. While this can help in the short term, you need to have repeat customers to sustain your ecommerce business in the long-term.

You can use this KPI along with the CPA to understand how much it costs you to get new customers for your ecommerce business.

Chat Sessions Initiated

If you’ve got a chatbot or live chat support on your ecommerce website, you should measure this KPI. It gives you an idea of how many of your visitors approached the virtual assistants to get their queries resolved.

Additionally, you should measure the number of chat sessions that were ended successfully to determine the performance of your virtual assistants. You must also analyze the chats to find the most common customer questions and problems and make provisions to solve them directly. This can help you improve the user experience you’re delivering.

Sales KPIs

Total Sales

Total sales is yet another important KPI you must measure for the success of your ecommerce business. It gives you an idea of the total revenue that you’ve generated in a certain time period.

You could check the total sales for varying durations, such as a day, week, month, or even a year. If you discover that your product sells more during a certain time of the year, you might decide to spend more on marketing during that same period to maximize growth. You may also want to supplement with additional distribution channels when sales are slower or do a promotional event.

Number of Sales

This is one of the most obvious KPIs to track for your ecommerce business. The number of sales can give you an idea of your growth across a certain time period. This can help you assess your performance and optimise it.

You can choose various time periods to get a better picture of how your ecommerce business works too.

For instance, the annual sales will give you an idea of the overall performance of your website. On the other hand, quarterly sales will show you the seasonality in your business.

Monthly sales can help you gauge the performance of your marketing campaigns quickly. Lastly, through hourly sales, you can figure out the real-time performance of your campaigns.

Additionally, by viewing this KPI along with others, such as website traffic, you can ascertain how well your website is converting visitors. Alternatively, you could use it with the average order size.

Average Order Size

This KPI shows you the average spend of your customers for every order that they place on your website. It’s one of the most vital KPIs for ecommerce businesses because it gives you a fair idea of your payback period and ROI.

The higher the average order size, the faster will you be able to cover your CPA and get a better ROI. This can help your business become profitable quickly.

On the other hand, if the order sizes are small, you might need to look into strategies to increase the average order value.

Conversion Rate

The conversion rate of your website is one of the most vital KPIs for the success of your ecommerce business. This KPI shows you the real performance of your ecommerce business in converting visitors into customers.

The higher your conversion rate, the better it is for your website and your revenue.

The conversion rate can be derived by dividing the number of customers by the visitors and then multiplying it by 100. Just like the other KPIs, you must use the conversion rate in conjunction with other metrics to get the whole picture.

Cart Abandonment Rate

This is another KPI that ecommerce business owners must track. Through it, you can discover how many of your users are adding your products to their shopping carts but not purchasing them.

You should always work on lowering this number as much as possible.

Higher cart abandonment rates can mean that your checkout process may be difficult or confusing. You may need to analyze its performance and figure out how it can be improved to reduce the cart abandonment rate. This can help you optimise the bottom of your sales funnel.

You could also send out automated emails to your visitors when they abandon their carts. In these emails, you can remind them that they’ve forgotten the products that they had added to their carts.

TAt the same time, you can provide a call-to-action in the email that takes them right to the checkout page. To make the offer sweeter, you can add a coupon or discount code in the email.

If your cart abandonment rate is high, it means that a lot of your budget is being wasted on getting customers to the checkout page. However, it’s not reaping enough returns.

You can use the cart abandonment rates with the CPA to figure out the impact that it can have on your revenue.

Churn Rate

The churn rate of your ecommerce business is an important KPI to find out how quickly customers are leaving your business. However, this is really only applicable to businesses with a subscription or recurring revenue model. If you don’t have a subscription based model, then Returning Customers is a better focal point.

If your churn rate is high, you can expect to lose more customers quickly. This also means that there could be some issues with your customer retention strategy, and you might need to improve it.

If you don’t act fast, your customer count might start dwindling faster than you are acquiring new customers, so you should track this metric carefully and frequently.

Email Subscribers

This KPI for ecommerce businesses gives you the number of subscribers of your emails. The higher this number, the better it is for your brand as you’ll be able to reach a bigger audience through your emails and market your products more.

However, you must check the demographics of your subscribers to understand if they’re a part of your target audience. Additionally, you should keep refining this list regularly by removing fake email addresses and the ones where your emails are bouncing back. Personal product selection software (PPS) enable you to target personal product selections for each individual consumer without needing to blandly segment audiences. This enables you to achieve the highest level of return from any MARTECH solution available.

Cost of Goods Sold (COGS)

COGS is yet another essential KPI for your ecommerce business that you shouldn’t fail to track. Through it, you can find out the cost incurred by you to sell a product.

This cost includes everything from manufacturing to employee wages and utilities. It can also be one of the toughest to track and calculate, but it is crucial to know in order to ascertain the true profit margin on your products.

Product Affinity

Product affinity is an important KPI for ecommerce business that can help you with upselling. You can check out the products which are being purchased together, and accordingly, cross-promote them.

These products can be listed as bundles on your ecommerce store to improve the average order size.

Product Relationship

This is yet another essential KPI for your ecommerce business. The product relationship tells you which products are viewed after another. This can help you ascertain if they can be used together for upselling and increasing the average order size.

Inventory Levels

Monitoring your inventory levels is crucial to ensure that you have products to supply to your customers continuously. Additionally, this KPI for ecommerce businesses can help you figure out how long a product sits before getting sold.

You need to reduce this figure to ensure that you don’t end up stocking up too many products, especially if they’re physical products.

Inventory levels can also help you measure how quickly your products are being sold. This can help you ascertain how many units you’d need to order to fulfill the demand

Profit/Loss KPIs

Customer Lifetime Value (CLV)

When it comes to ecommerce stores, your revenue matter a lot. To find your most valuable customers, you can check their Customer Lifetime Value (CLV).

This gives you the sum of the purchases by customers from your business over their lifetime with your business. It’s due to this reason that it’s an extremely important KPI for your ecommerce business.

Cost Per Acquisition (CPA)

Cost Per Acquisition (CPA) is yet another important KPI for your ecommerce business. It gives you a clear idea of the cost incurred by your business to get a lead or acquire a customer. If this figure is higher than your average CLV, you might be running into losses.

Return on Ad Spend (ROAS)

The Return on Ad Spend is one of the most essential KPIs for your ecommerce business. It can be derived by dividing your marketing revenue by the total marketing costs.

If this ratio is less than 1, you might be running into huge losses. Try to maximize it as much as possible. The higher this ratio, the better your chances of being profitable.

Gross Profit

This is one of the simplest KPIs for ecommerce businesses that all stores must follow. It can be found by subtracting the total cost of the goods from the sales. This gives a rough idea of your store’s profitability.


The value-per-visit gives you the average monetary value that every customer visiting your ecommerce store represents. You can find this KPI by dividing the total revenue of your website by the number of visitors.

Average Margin

The average margin is one of the most important KPIs for your ecommerce business, and it represents your profit margin over a certain time period.

Your Market Share

To find this KPI, you need to track two different parameters. One is the size of your market, and the other is the size of your market. You can figure out your market share by dividing the size of your market by the total market size and multiplying it by 100.

While this doesn’t show you the performance of your ecommerce store directly, you can find out how much room you have to grow in your market.

If your market is too small and you’ve already captured a significant chunk of it, you might need to move to another market. This is because the potential for growth will be very limited.

Along with this, it helps you identify how many competitors there currently are in your industry. The greater the number of competitors, the less your chances of capturing a greater market share.

Average Market Price

While most of the KPIs for ecommerce businesses deal with your website, this one takes into account your entire market.

You should monitor your competitors’ pricing and find the average price of the entire market. Compare this price with your price to figure out if your pricing is below or above the average pricing of your competitors.

Final Thoughts

To grow your ecommerce business, it’s crucial to measure all of the critical KPIs. The success of your website depends a lot on how you monitor these KPIs and make the required changes to your strategies.

From your website traffic to the number of live chat sessions initiated by your visitors, you must track it all. By analysing these metrics, you’ll be able to upsell your products, increase your sales, and also your market share.

Remember, the success of your ecommerce business depends upon you providing a good user experience, and monitoring the KPIs above can help you achieve that.

What are other important KPIs for ecommerce businesses do you track? Let us know in the comments.

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