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What are key performance metrics for an eCommerce business?

There are several important performance metrics that an eCommerce business should track in order to measure the success and profitability of the business. Here are a few key metrics to consider:

  1. Sales revenue: This is the total amount of money that your business brings in through sales. Tracking your sales revenue can help you understand how well your business is performing and identify trends over time.
  2. Cost of goods sold (COGS): This is the total cost of producing the products that you sell. Tracking your COGS can help you understand your profit margin and identify areas where you may be able to reduce expenses.
  3. Gross profit: This is the difference between your sales revenue and COGS. Tracking your gross profit can help you understand how much money you have left over after paying for the cost of goods sold.
  4. Customer acquisition cost (CAC): This is the cost of acquiring a new customer, including marketing and sales expenses. Tracking your CAC can help you understand the cost of acquiring new business and assess the profitability of your marketing efforts.
  5. Customer lifetime value (CLV): This is the estimated value of a customer to your business over the lifetime of their relationship with your company. Tracking your CLV can help you understand the long-term value of your customers and identify opportunities for customer retention and growth.
  6. Return on investment (ROI): This is a measure of the profitability of an investment or business activity, calculated by dividing the net profit by the total cost of the investment. Tracking your ROI can help you understand the efficiency of your business operations and identify areas for improvement.