Tracking the Right eCommerce KPIs
Monitoring the performance of an eCommerce business is something you should ideally set up from the very beginning. It will have multiple serious implications for your success in the long run but it’s not something you can expect to work well without putting some serious effort into it.
In fact, many eCommerce entrepreneurs inevitably discover the same truth – that this is one of the most important aspects of running this kind of business. At the same time, however, it can also be the most challenging one for a number of reasons.
Choosing the right eCommerce provider is crucial. A good eCommerce platform will provide you with a number of ways to analyze the performance of your business. Creating your own website and using a builder like WooCommerce, will give you full control on how your store will look and function.
If you already have a website to use as a store, it never hurts to have more ways of finding your product online to create an omnichannel presence. Selling platforms such as eBay or Amazon should be used as additional selling channels if you aren't starting with them. Just eBay.com has around 180 million active users, and some of them might have not heard about you yet. Think about it as part of your marketing.
So let’s say that we have a webpage as a store, and we decided to start an eBay store. What’s next?
The Importance of Objective Analysis in your eCommerce Business
It’s easy to have the wrong idea about your own business if you’re not relying on data and hard facts. People tend to overestimate their own success, especially when they don’t see any obvious issues on the table. And using your intuition might not work as well as relying on numbers and statistics.
Collecting data and facts about the operation of your company is the only true way to achieve long-term success. And considering how many opportunities you have to do that thanks to modern technology, you really have no excuse for underdelivering on that front. Let’s take a look at what are the important aspects of our eBay based store.
Identifying Critical KPIs
So you set up your eBay store, and it’s starting to do pretty well. To make sure you optimize the processes and bring in profits, you must track KPIs (Key Performance Indicators). They will be different for every store out there based on what you want to sell.
The most important thing is to understand what information is useful for you, in order to build a better store and have loyal customers. There are some general KPIs that will make sense for most eCommerce businesses out there. These are just starting points though.
Perhaps the most important KPI for any eCommerce business, in general, is your gross profit. Basically, how much you’ve made after subtracting the cost of the goods that came out of your own pocket. This is your “true profit”, so to speak – although before taxes. It’s important to keep a close eye on it for obvious reasons.
But try not to treat it as a universal indicator for the current state of your eCommerce business. This is a common mistake among beginners that can lead to incorrect decisions. Just because your gross profit is going down for a while doesn’t mean that you’re doing something wrong. There are many factors that can affect this number.
Your conversion rate is the percentage of people that end up buying something. It’s normal for businesses – especially online ones – to have a relatively low percentage here.
Studies indicate that 2-3% is more than reasonable for a typical online business. At the same time, it’s a useful KPI because it can alert you of problems after you’ve changed something.
Since we want to increase this rate, we have to look and improve each aspect of our eCommerce business. How does your listing look? Do your email designs look professional? How fast do you respond? It’s important to keep track of all these things, and how your customers react to them.
All of that might be a lot to handle, especially if you are just starting out. Luckily, there are tools that let you track these metrics. For example, 3Dsellers created several tools to improve and help you follow your business progress. And even better - everything is in one place, so you don’t have to use 10 different websites.
Analyzing the fluctuation of your total sales over a period can allow you to predict certain market trends in the future. Sometimes, these trends will not be very obvious at a glance. For example, certain surges in your sales might be tied to events that you don’t even know about.
It can also be helpful when planning ahead, was the previous Christmas holiday good for sales? Then maybe you should push Christmas emails and marketing even more. Was your eBay store successful doing some holiday in another country? Then try to do more country or language-based email marketing.
The important thing to remember here is that you should only consider your total sales figure in the context of other KPIs. By itself, it doesn’t mean much.
Cart Abandonment Rate
This is not the opposite of your conversion rate, even though some people often mistakenly use the two interchangeably. Cart abandonment rate refers to the specific cases where someone has placed items in their cart, only to leave them behind for an unknown reason. It happens to all online businesses so don’t freak out.
Decreasing your abandonment rate is not easy, because it’s tied to various factors that can be unpredictable. But if you notice a strong upward trend in that figure, then you know something is not right. It’s a useful red flag that can indicate general problems with your store.
If it’s your own site then maybe the design or layout is tricky for customers. If it’s an eBay store then maybe there’s a problem with your descriptions or shipping options. Either way, it’s a good statistic to keep in mind while trying to improve your shop.
Selling something is just part of the job.Your store success depends on how happy your customers are with shipping and delivering. You need to make sure the goods come to them in one piece and in time. And while determining the store success from this KPI is difficult, it’s a good rule of thumb - the less your customers have to wait the happier they are.
And it’s not the easiest thing to track and maintain. While at the beginning it might be easy to handle a couple of sold items, if your goal is to grow, it can get frustrating fast. There might be problems with shipping to a certain location, or maybe the package is going to be late and you want to inform your customer.
In situations like these, it is important not only to know how to act but also act fast. If you need a tool to optimize this process or have everything in one place, this Shipping Tracker has you covered. It makes tracking and responding to problems really easy by creating automated update messages to your customers based on the couriers' triggers.
How much time a person spends at your site on average can also be a useful indicator. It’s not going to show you a lot but it’s important when seeing what works for your customers. Different stores will have different expectations for this, and there’s no universal rule.
Keep in mind that this is not something you want to see going up without an end. While keeping people browsing for longer is obviously useful, there are limits and caches. If session lengths start shooting up too much, this could indicate problems with your design and navigation.
Remember that even if users browse your store longer, that doesn’t mean that they will buy something. So combine this data with other KIP for the best results.
Emails are the backbone of any good online store. It’s not only a way to have a better connection with your customers but also a great tool to track how your business is doing in different situations.
There are different statistics we can get from emails: open rate, bounce rate, click rate, etc. We will not go in-depth about them here, lets better focus on things that can help us with our eBay store.
Personalizing emails that you send is a very important part. Using the name or other information will make the email look more personal, have that human touch to it. And a customer that feels important will likely shop at your store again.
But you can also use emails to track certain things, like positive or negative feedback, purchases, shipping, and Bids. That’s where the tool ThankYou Emails comes in handy - with it, you can personalize your emails and track different statistics to see where you should improve.
eCommerce KPIs - Choose What to Track
These are some good starting points to analyze the performance of your store - whether it’s located on your website or on a selling platform, like eBay. The main things to keep your attention on, how much you’re profiting – both in general as well as per individual user – and how well you’re engaging people coming to your site.
This can be indicated by a number of factors, such as session length, abandonment rate, and conversion rate. While tracking emails, listing designs and overall look and feel of your store will help to create loyal customers.
Using this kind of data wisely can allow you to progress much faster than the majority of your competitors. So double-check what you need to track and good luck making your store the best there is.