Placeholder canvas

E-Commerce Key Performance Indicators

Performance is an essential factor that can be used to assess any retail business, particularly if it involves e-commerce transactions. It can be difficult to get an accurate measure of how an e-commerce business is faring if its performance isn’t gauged and studied.

Regardless of the niche or branch of e-commerce your business belongs to, it is important that you continuously monitor its performance so as to know the exact state it is in. This can be done by measuring certain parameters that have been proven to be highly reliable metrics.

These parameters are referred to as performance indicators. Every business has a unique structure with peculiar goals and objectives. It is also worthy to note that the performance indicators that are established for a particular e-commerce business may be inappropriate for another. This is largely due to the fact that e-commerce websites vary in niches, modes of operations, and objectives.

What is a Performance Indicator?

A performance indicator can be described as a measurable parameter that is used to calculate and substantiate the performance of a business entity in relation to its set goals. To dilute this definition for a layman, a performance indicator simply means a measurement of a business’ performance in relation to its set target.

So for instance, if a website sets a target of 10,000 monthly views by the end of its first year, a performance indicator that can be used to measure its performance so far is the number of unique visitors that visit the site daily.

Basically, any parameter that helps to show the performance level of an e-commerce business can be regarded as a performance indicator. There are, however, some performance indicators that are key to the overall success of an e-commerce website; these parameters are referred to as key performance indicators.

What is a key performance indicator?

Almost any parameter can be used as a performance indicator to measure the success rate of an e-commerce platform. This, however, makes a lot of artificially created metrics less trustworthy since they aren’t universally accepted as true measurements for performance. The data that is also assembled from them can’t also be regarded as factual.

KPIs are, however, globally recognized as true indicators of business performance. They are quite accurate since the parameters used in calculating them exist in all facets of business and a variety of e-commerce niches.

Why are key performance indicators important?

When you’re running a business, it is important that you consistently monitor the status of your enterprise…be it structurally, functionally, and financially. It is just erroneous for a business entity, particularly an e-commerce website, to remain functional without consistent assessment of its “health”.

It is quite crucial that you know how your online retail store is faring otherwise it may begin to fail without your knowledge.

KPIs are collections of factual data that show you the real state of your business. They are not formulated by guess-work but are in fact pulled from actual studies of growth parameters associated with your e-commerce website.

The principal function of KPIs may be to inform you of your business’ status, but they also play pivotal roles in providing you with actionable information that you can use to improve your business’ performance.

On their own, KPIs are pretty much ineffective in growing an e-commerce business. When the collected data is, however, used strategically to implement multiple growth strategies, it can have a very positive effect on the e-commerce platform and improve sales by a large margin.

Another important use of KPIs is the training of personnel. With the knowledge of employees expanded, they can act purposefully to help improve the performance of the online store.

There are different categories of KPI, but only 2 are essential for the analysis of an e-commerce website:  Sales and Marketing.

Key Performance Indicators for Sales

KPIs for sales are perhaps the most important performance indicators for e-commerce businesses since they directly measure funds coming in via commercial transactions. While some of these parameters barely scrape the surface of sales data, others delve into details and help e-commerce businesses pinpoint parts of their operations that are adversely affecting their sales.

Here are some KPIs for sales you should always look out for.


It is possible for you to monitor hourly, daily, weekly, monthly, and yearly sales on your e-commerce website. With the information that is retrieved from this KPI, you can accurately know if your sales target is being met.

Gross Profit

The fact that your e-commerce business is making sales doesn’t necessarily mean that it is turning a profit and actually making money for you. To know if your online store is profitable, you must calculate the gross profit, which is the total sales minus the costs of the sold goods.

The Average Order Size

This parameter specifically measures the amount spent on each order by a customer. It is also referred to as average market basket, and it helps you to know which of your customers are able to afford the products you sell.

Average Profit Margin

This is the percentage profit margin of an e-commerce business over a specific time period. It is often just called the average margin and gives a clearer view of your business’ revenue status.

Conversion Rate

The internet users who visit your online store only become active players in your e-commerce business when they have been converted to paying customers. The rate at which this happens is referred to as conversion rate, and it is an important KPI that tells you whether your marketing strategy is working.

If your e-commerce platform is getting decent traffic but still struggling with its conversion rate, then it means that you need to make use of another approach with regards to your marketing strategy.

Number of Transactions

It is important that you consistently keep tabs on the number of transactions being carried out on your website. Using this KPI together with the average order size gives more insights into the purchasing behavior of your customers.

Cart Abandonment Rate

This indicator basically measures the rate at which visitors who add products to carts abandon them before completing the checking out process. It is an important parameter that helps you to know if your checking out process needs to be overhauled for a smoother process.

Customer Orders — New vs Returning

Customer retention is quite critical to the success of an e-commerce site, and its measure can be determined by comparing the number of new customer orders to that of returning customers. If the customer retention of your site is solid, it is bound to grow further and make a lot more profit.

Cost of Goods Sold

Also referred to as COGS for short, this KPI tells you the cost incurred on each product that is sold on your e-commerce platform. The indicator is composed of important elements that go into the production of a commercial item including wages, manufacturing costs, and overhead costs.

Available Market Share vs Retailer’s Market Share

This KPI lets you know how your business is doing by comparing the market you presently control to that still available.

Product Affinity

This isn’t your conventional performance indicator. It basically informs you of products that are often purchased together. Having this knowledge allows you to streamline your marketing strategy for such products.

Product Relationship

This KPI is used to study the products that are consecutively viewed and purchased. It also helps you to define a marketing strategy for your e-commerce site.

Inventory Levels

Information about the inventory of your e-commerce site is quite important since it lets you know the stock you have at hand and provides useful data on the products you sell. Among such information is the number of days each product has spent in your inventory.

Competitive Pricing

A consistent review of pricing policy is a must if you want your e-commerce business to thrive in the midst of its competitors. To do this, you must analyse your prices and place them side by side with your competitors’.

Customer Lifetime Value

This KPI tries to measure the worth of a customer to your business and basically lets you know the loyalty levels of all your customers.

Revenue Per Visitor

Remember that the amount spent by each customer on your website varies, which is why it is necessary to keep records of the revenue that comes in from each customer you sell to on your platform. RPV helps you to address this and gives you a clear picture of the customers that still need to be subjected to a marketing campaign.

Churn Rate

This is an indicator that determines if your e-commerce business is failing. It basically informs you of the rate at which customers are cancelling orders and switching to another brand.

Customer Acquisition Cost

This metric is basically used to assess the effectiveness of your marketing strategy by showing you the marketing costs you incur on each customer you successfully convert.

Key Performance Indicators for Marketing

Principally, the success of your marketing strategy can be gauged by assessing the rise in revenue that follows. This, however, isn’t enough to know the exact impact a marketing strategy has on an e-commerce site.

There are several KPIs for marketing that can accurately measure the effects of a marketing campaign on a business. Here are some of them:

Site Traffic

This basically tells you the number of total visitors to your site. An increase suggests that your marketing strategy is in full effect and working perfectly.

Number Visitors — New vs Old

This KPI gives a measure of the number of new visitors to your e-commerce website in relation to those returning for subsequent visits. This parameter doesn’t really say much unless you engage in a marketing campaign that specifically targets returning visitors. If this is the case, then the number of returning visitors should be higher.

Time on Site

This lets you know the amount of time spent by visitors on your website. Ultimately, you want your visitors to stick around on your website as it improves your chances of converting their visits into sales. One way to achieve this is to have landing pages and also a blog on your site to keep your visitors engaged.

Bounce Rate

Your site’s bounce rate is basically the rate at which visitors leave your website after only viewing a page. It is an important KPI that helps you assess the quality of your site. A very high percentage simply means that your e-commerce store is poorly built or perhaps defective.

Pageviews Per Visit

This is the number of pages in your online store that a visitor views on one single visit. A high value often suggests that your visitors engage in a lot of activities on your website.

Average Session Duration

This calculates the average time spent on your site by a visitor in one visit.

Traffic Source

The sources of traffic to an e-commerce website include direct, organic (search engine), social media, and referral (backlinks).

Mobile Traffic

Your traffic on mobile devices is also important, and carrying out a thorough analysis lets you know if you need to make your site more responsive.

Number of Newsletter Subscribers

This KPI helps you to gauge the success of your email marketing campaign. A higher value means your campaign was a success.

Subscriber Growth Rate

It is important for you to consistently measure the rate at which your subscriber list is growing. The data provided by this KPI can be used to execute an even more effective email marketing campaign.

Email Open Rate (EOR) and Email Click-through Rate

These two KPIs basically tell you the rates at which your emails are opened and the links within are clicked by your subscribers. Having knowledge of this information is crucial as it helps you craft better content for your email marketing endeavor.


This is the rate of unsubscriptions in your email list

Average Click-through Rate

This measures the percentage of visitors to your e-commerce site that clicks on links within your site.

Pay Per Click Traffic Volume

If you choose to engage in PPC marketing, this KPI helps keep a tab on the amount of traffic you are generating from it.

Ads CTRs

The click-through rates for banners and other ads on your site play an important role in a site’s revenue. It also lets you know the percentage of your visitors that are clicking the ads on your site.

Affiliate Performance Rates

Finally, this KPI helps you measure the performance of your site’s affiliate program, which can also be used to assess the overall success of your website. Once you decide which of these key performance indicators are important to your business, you can start optimizing them. To supercharge your WooCommerce store and improve these indicators, check out our WooCommerce solution based on AWS.

Want faster WordPress?

WordPress Speed Optimization

Try our AWS powered WordPress hosting for free and see the difference for yourself.

No Credit Card Required.

Whitelabel Web Hosting Portal Demo

Launching WordPress on AWS takes just one minute with Nestify.

Launching WooCommerce on AWS takes just one minute with Nestify.