Metrics
Important metrics for ecommerce businesses
What each metric means, how to calculate it with a worked example, and what good and bad look like.
6 metrics
Ad spend and efficiency
How much you can spend on marketing before orders stop making money.
Breakeven Point ROAS
The return on ad spend at which an order covers its costs and makes neither profit nor loss.
BEP ROAS = Revenue per product ÷ (Revenue per product − Total costs per product)
Read moreBreakeven MER
The lowest marketing efficiency ratio your business can run at before it becomes unprofitable.
MER = Total revenue ÷ Total marketing spend
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Margin and order value
What each order brings in and what is left after the costs of selling it.
Customer economics
What a customer is worth against what it cost to win them.
CLV/CAC Ratio
The value a customer brings over their lifetime compared with the cost of acquiring them.
CLV/CAC ratio = Customer lifetime value (contribution) ÷ Customer acquisition cost
Read moreCAC Payback Period
The time it takes to recoup the cost of acquiring a new customer.
CAC payback period = Customer acquisition cost (CAC) ÷ Contribution per order (or per month)
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