E-commerce marketing is a very different ballgame from other types of marketing. If you only focus on your sales numbers, then you will have a hard time to identify what is working in your business and where you need to improve.
To get an accurate indication of how your e-commerce marketing is performing, you need to keep track of a number of key performance indicators (KPIs). Here are the KPIs we suggest you track:
- Conversion Rate
The conversion rate of an e-commerce website is straightforward: divide the number of visitors by the number of sales. According to research, the average conversion rate of an e-commerce website is between 1% and 2%, so even if you’re hitting the mark, you can’t expect super high conversions.
- Gross Margin
To calculate the gross margin of your e-commerce business, subtract the cost of the products you have sold by your sales. If you have a high gross margin, then you will have more money left for operating and running your business than a company with a low gross margin. The industry you are in, the products you are selling and a number of other factors can impact the gross margin you are aiming for. Use Shopify’s simple gross margin calculator to help get you started.
- Average Order Value
Your e-commerce business’ average order value can be calculated by dividing the total number of orders on your site per month by the website’s revenue for the month. This information can give you valuable insights about your customers’ spending habits and the way they make decisions depending on price.
WSI OMS offers a wide variety of digital marketing services related to e-commerce marketing, including content marketing and website design. Contact us for more information today.