The 12 Most Important Ecommerce KPIs to Track in 2025

Running a successful ecommerce business isn’t just about making sales; it’s about tracking the right ecommerce KPIs to drive sustainable growth and profitability.

Without these metrics, you might be overspending on marketing, losing customers without knowing why, or struggling with cash flow issues.

Every ecommerce KPI acts as your business’s vital sign, giving you a clear picture of sales performance, customer behavior, and overall profitability. By tracking and analyzing them, you can make data-driven decisions to optimize marketing campaigns, enhance the customer experience, and boost your bottom line.

In this guide, we’ll break down the 12 most important ecommerce KPIs, how to measure them, and strategies to improve them.

Along the way, we will cover how doola’s formation and compliance services can help set your business up for long-term success.

What Are Ecommerce KPIs & Why Do They Matter?

Ecommerce KPIs are measurable metrics that provide insights into your business’s health and performance. They help entrepreneurs understand sales trends, customer behavior, and financial stability, ensuring that every decision is backed by data.

By tracking and optimizing these ecommerce KPIs, you can increase profitability, improve customer retention, and scale efficiently.

The 12 Essential Ecommerce KPIs to Track in 2025

Unless you’re tracking the key ecommerce KPIs, you have zero insights into your sales, marketing effectiveness, customer behavior, and overall business health.

By measuring the right metrics, you can make data-driven decisions that improve conversion rates, boost revenue, and optimize profitability.

In this section, we’ll break down the 12 most critical ecommerce KPIs, explain how to measure them, and discuss why they matter.

1. Conversion Rate

The conversion rate measures the percentage of website visitors who complete a purchase. It’s one of the most critical ecommerce KPIs, as it directly reflects how effectively your site turns traffic into revenue.

Why It Matters

A high conversion rate indicates that your website is successfully persuading visitors to make a purchase.

A low conversion rate, on the other hand, could signal issues such as poor user experience, complicated checkout processes, un-competitive pricing, or unconvincing product descriptions.

How to Calculate Conversion Rate

Conversion Rate = (Total Purchases / Total Visitors) x 100

Example Scenario:

Let’s say your ecommerce store receives 10,000 visitors in a month, and 300 of them make a purchase.

Conversion Rate = (300 / 10,000) x 100 = 3%

This means for every 100 visitors, only three are making a purchase. If your industry’s average conversion rate is 4%–5%, a 3% rate may indicate room for improvement in areas like site speed, checkout flow, or product presentation.

✅ Tips for Improving Conversion Rate

Listed below are a few proven tips to boost the conversion rate for your online stores:

1. Enhance Product Pages: Use compelling images, product descriptions, and customer reviews to build trust and highlight value.

2. Create Urgency: Limited-time promotions, countdown timers, and exclusive deals can encourage buyers to take action.

3. Optimize Checkouts: Reduce friction by offering guest checkout, multiple payment options, and a mobile-friendly experience to prevent drop-offs.

By continuously monitoring and optimizing your conversion rate, you can increase revenue without necessarily driving more traffic, maximizing the impact of your existing audience.

2. Average Order Value (AOV)

AOV measures the average amount a customer spends per transaction. This ecommerce KPI helps you understand purchasing behavior and revenue potential per order.

Why It Matters

A higher AOV means you’re generating more revenue from each customer without needing to increase traffic or acquire new buyers. Instead of focusing solely on getting more customers, optimizing AOV allows you to maximize revenue per sale, improving profitability.

How to Calculate AOV?

AOV = Total Revenue / Number of Orders

Example Scenario:

Suppose your ecommerce store generates $50,000 in revenue from 1,000 orders in a given month. Then:

AOV = 50,000 / 1000 = 50

This means your AOV is $50. Each customer spends an average of $50 per transaction. If you can increase AOV to $60, you’d generate an extra $10,000 in revenue without acquiring a single new customer.

Metric	Before Optimization	After Optimization ⚡
1. Total Orders	1,000	1,000
2. AOV	$50	$60
3. Total Revenue	$50,000	$60,000

✅ Tips for Improving AOV

Here are a few expert tips to boost your AOV:

1. Offer Product Bundles & Upsells: Encourage customers to buy complementary products together at a discounted rate (e.g., “Get a phone case & screen protector for 20% off”).

2. Use Free Shipping Thresholds: Set a minimum order amount for free shipping (e.g., “Spend $75 and get free shipping”), prompting customers to add more items to their cart.

3. Implement Loyalty & Rewards Programs: Offer points, discounts, or perks for spending more, motivating customers to increase their order size.

By focusing on increasing your AOV, you can significantly boost revenue and profit margins without additional customer acquisition costs.

3. Customer Acquisition Cost (CAC)

CAC measures how much you spend to acquire a single new customer. It includes marketing expenses like paid ads, influencer collaborations, and promotional campaigns.

Why It Matters

If your CAC is too high, your business may struggle to turn a profit, especially if customers don’t return for repeat purchases. Keeping CAC in check ensures sustainable growth and maximizes profitability.

How to Calculate CAC?

CAC = Marketing Costs / New Customers Acquired

Example Scenario:

Let’s say your e-commerce business spends $5,000 on marketing and successfully acquires 200 new customers. Using the formula:

CAC = 5000 / 200 = 25

This means you’re spending $25 to acquire each new customer. Now, if your Average Order Value (AOV) is $30, your profit margin is extremely tight, leaving little room for sustainable growth.

That’s why it’s crucial to reduce CAC while increasing AOV.

This ensures that each customer not only costs less to acquire but also brings in more revenue per transaction.

✅ Tips for Reducing CAC

Start implementing the following tips to reduce your CAC:

1. Refine Ad Targeting: Use data-driven insights to reach high-intent customers and avoid wasted ad spend.

2. Leverage Retargeting: Convert engaged visitors who didn’t buy the first time.

3. Boost Organic Traffic: Invest in SEO and content marketing to drive cost-effective customer acquisition. By optimizing your CAC, you ensure that every marketing dollar works harder for your business.

4. Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) estimates the total revenue a business can expect from a single customer throughout their relationship with the brand. A high CLV indicates strong customer loyalty and long-term profitability.

Why It Matters

A high CLV allows businesses to spend more on acquiring customers (CAC) while remaining profitable. It also highlights the importance of customer retention, because keeping existing customers engaged is far more cost-effective than constantly acquiring new ones.

How to Calculate CLV?

CLV = AOV x Purchase Frequency x Customer Lifespan

Example Scenario:

Suppose your Average Order Value (AOV) is $50, and the average customer makes a purchase 4 times per year. If the typical customer stays with your business for 3 years, the CLV is calculated as:

CLV= 50×4×3 = 600

AOV	Purchase Frequency	Customer Lifespan	CLV
$50	4 purchases/year	3 years	$600

If your CAC is $40 and your CLV is $600, your business remains highly profitable over the long run.

✅ Tips for Improving CLV

The following tried and tested strategies will help improve your CLV:

1. Personalized Customer Experience: Use AI-driven recommendations and tailored promotions to boost loyalty.

2. Subscription & Loyalty Programs: Offer subscription boxes, rewards, or VIP perks to encourage repeat purchases.

3. Post-Purchase Engagement: Strengthen relationships through personalized email marketing, re-engagement campaigns, and special offers.

By increasing CLV, you maximize revenue per customer while reducing dependency on costly new customer acquisitions.

5. Cart Abandonment Rate

Cart Abandonment Rate measures the percentage of shoppers who add items to their cart but leave without completing the purchase. A high abandonment rate can indicate friction in the checkout process, unexpected costs, or a lack of trust signals.

Why It Matters

Reducing cart abandonment can significantly increase revenue without needing additional traffic. If 65% of shoppers abandon their carts, even a small improvement can lead to a boost in sales.

How to Calculate It?

Cart Abandonment Rate = (Abandoned Carts / Initiated Checkouts) x 100

Example Scenario:

Say for example, your store had 1,000 initiated checkouts, but 650 customers abandoned their carts before completing the purchase. Using the formula:

Cart Abandonment Rate = (650 / 1000) x 100 = 65%

This means 65% of potential buyers left without making a purchase. A major red flag for lost revenue.

A high cart abandonment rate suggests that many potential sales are slipping through the cracks due to checkout friction or unexpected barriers.

✅ Tips for Reducing Cart Abandonment Rate

We’re listing a few tips to prevent customers from leaving the cart without completing their purchase:

1. Send Automated Abandoned Cart Emails: Remind shoppers about their incomplete purchase with incentives like free shipping or limited-time discounts.

2. Enable Guest Checkout: Avoid forcing account creation to reduce friction.

3. Offer Multiple Payment Options: Provide flexible methods, including Buy Now, Pay Later (BNPL), digital wallets, and credit/debit cards.

4. Display Trust Signals: Use security badges, customer reviews, and clear return policies to build confidence.

A smooth, hassle-free checkout experience can dramatically lower abandonment rates and turn hesitant shoppers into loyal customers.

6. Return on Advertising Spend (ROAS)

ROAS measures the effectiveness of your advertising efforts by calculating how much revenue is generated for every dollar spent on ads. It’s a critical metric for understanding whether your marketing budget is yielding profitable results or draining resources.

Why It Matters

A high ROAS indicates that your ad campaigns are effective and generating strong returns. Conversely, a low ROAS suggests that your ads may not be targeting the right audience, delivering the right message, or appearing on the best-performing platforms.

Optimizing ROAS can lead to more efficient ad spending, increased profitability, and boost business growth.

How to Calculate ROAS?

ROAS = Revenue from Ads / Ad Spend

Example Scenario:

Suppose your e-commerce business spent $5,000 on advertising and generated $20,000 in revenue directly from those ads:

ROAS = 20,000 / 5,000 = 4

This means:

For every $1 spent on advertising, your business earns $4 in revenue.

Now that’s a solid return!

A high ROAS indicates an effective ad strategy, while a low ROAS suggests a need for optimization, such as refining target audiences, improving ad creatives, or testing different platforms.

By continuously analyzing and adjusting your ad strategy, you can maximize ROAS and ensure your marketing dollars are driving sustainable growth.

7. Website Traffic & Source Breakdown

Website traffic measures the number of visitors landing on your online store, while source breakdown identifies where those visitors are coming from—whether it’s organic search, paid ads, social media, referrals, or direct traffic.

Why It Matters

Some sources of traffic bring high-intent buyers, while others generate passive browsers. By analyzing traffic patterns, you can refine your marketing strategies, allocate budget effectively, and optimize for higher conversion rates.

For instance, if organic search drives most of your sales, doubling down on SEO could deliver long-term growth. If paid ads bring traffic but don’t convert well, you may need to adjust targeting or messaging.

✅ Tips for Improving Website Traffic

Start implementing these strategies and you never have to struggle with poor website traffic again:

1. Invest in SEO: Improve site rankings by optimizing product pages, creating valuable content, and building backlinks to increase organic traffic.

2. Leverage Influencers & Affiliates: Partner with industry influencers and affiliates to drive referral traffic and boost brand credibility.

3. Optimize Paid Ad Campaigns: Use data-driven insights to fine-tune audience targeting, bidding strategies, and ad creatives for better ROI.

4. Enhance Social Media Engagement: Drive traffic from social platforms by posting engaging content, running promotions, and interacting with your audience.

5. Monitor & Adjust Regularly: Use analytics tools to track traffic trends, identify top-performing sources, and continuously optimize your strategy.

By understanding where your visitors come from and how they interact with your site, you can make informed decisions that drive sustainable growth and improve conversion rates.

8. Bounce Rate

Bounce rate represents the percentage of visitors who land on your website and leave without interacting further—meaning they don’t click on another page, fill out a form, or make a purchase.

A high bounce rate often signals a disconnect between visitor expectations and your site experience.

Why It Matters

High bounce rate = Lost sales opportunities.

It could indicate slow page load times, poor mobile responsiveness, unclear navigation, or irrelevant content. If visitors leave without exploring, your chances of converting them into loyal customers drop significantly.

Example Scenario:

Take the example of an online store selling eco-friendly skincare products. The brand runs a paid ad targeting people searching for “organic face moisturizer.” If users click the ad and land on a generic homepage instead of a dedicated moisturizer product page, they may bounce immediately.

However, if the landing page directly matches their search intent—with product recommendations, customer reviews, and a seamless checkout option—the chances of them staying and purchasing increase.

✅ Tips for Reducing Bounce Rate

You can easily bring your bounce rate down by implementing these techniques:

1. Improve Site Speed: Slow-loading pages frustrate visitors. Use tools like Google PageSpeed Insights to optimize load times.

2. Mobile Responsiveness: With most traffic coming from mobile devices, a mobile-friendly design is crucial. Test and optimize for different screen sizes.

3. Landing Page vs. Visitor Intent: Align page content with what users are searching. If they click on an ad for a specific product, take them directly to the product page.

4. Internal Linking: Guide visitors to related content or products through strategic internal links to keep them engaged longer.

5. Use Clear CTAs (Calls to Action): Make navigation intuitive with compelling CTAs that encourage visitors to explore further.

By reducing bounce rates, you not only improve user engagement but also increase the likelihood of converting visitors into loyal customers.

9. Customer Retention Rate

Customer retention rate is a key ecommerce KPI measuring the percentage of customers who continue to buy from your store over a specific period. It reflects how well your business nurtures long-term relationships and keeps customers coming back instead of losing them to competitors.

Why It Matters

Acquiring a new customer can cost 5–7 times more than retaining an existing one. Repeat customers tend to spend more, purchase more frequently, and are more likely to recommend your brand to others.

A strong retention strategy not only boosts lifetime customer value (CLV) but also ensures sustainable revenue growth.

How To Calculate

Retention Rate = [(Customers at End of Period – New Customers) / Customers at Start of Period] x 100

Example Scenario:

Let’s say an online sneaker store has 1,000 customers at the start of the quarter. By the end of the quarter, if 750 of those customers have made at least one more purchase:

Retention Rate = (750 / 1,000) × 100 = 75%

This means 75% of their existing customers continued to shop with them, indicating strong customer loyalty.

✅ Tips for Improving Customer Retention Rate

Listed below are a few proven ways to retain your customers:

1. Implement Loyalty Programs: Reward repeat customers with points, discounts, or exclusive perks.

Example: “Earn 10 points for every $1 spent and unlock VIP discounts.”

2. Offer Personalized Recommendations: Use customer data to suggest relevant products based on past purchases.

3. Enhance Customer Support: Provide quick, helpful, and friendly customer service via chat, email, and phone.

4. Post-Purchase Engagement: Send thank-you emails, request reviews, and offer incentives for future purchases to keep customers engaged.

5. Seamless Subscription Model: Offer subscription plans for products customers frequently purchase (e.g., monthly coffee deliveries or skincare refills).

By focusing on retention as an ecommerce KPI, you’re not just making one-time sales; you’re building a loyal customer base that drives long-term growth.

10. Net Promoter Score (NPS)

NPS is a critical ecommerce KPI that measures customer satisfaction and loyalty. It helps businesses understand how likely customers are to recommend their products or services to others.

A high NPS means strong customer advocacy, while a low NPS could indicate areas for improvement in customer experience.

How to Calculate NPS

NPS is often determined through customer surveys that ask:

🗨️ “On a scale of 0-10, how likely are you to recommend our brand to a friend or colleague?”

Based on responses, customers are categorized into three groups:

Customer Category	Score (0-10) 🗨️	Meaning
✔️ Promoters	9-10	Loyal customers who love your brand and actively recommend it.
✔️ Passives	7-8	Satisfied but not enthusiastic customers who may switch to competitors.
✔️ Detractors	0-6	Unhappy customers who could damage your reputation through negative word-of-mouth.

NPS = %Promoters−%Detractors

Let’s say your Shopify store surveyed 500 customers, and the responses were:

• 250 Promoters (9-10 scores) → 50%

• 150 Passives (7-8 scores) → (Not included in calculation)

• 100 Detractors (0-6 scores) → 20%

Using the formula: NPS = 50%−20% = 30

A NPS of 30 is considered good but has room for improvement.

✅ Tips for Improving NPS

Here’s how you can boost your NPS:

1. Enhance Customer Support: Quick, personalized assistance builds stronger relationships.

2. Deliver Exceptional Product Quality: Consistently high-quality products turn customers into promoters.

3. Act on Feedback: Address complaints and improve areas that customers highlight.

4. Create a Loyalty Program: Reward returning customers and incentivize referrals.

5. Engage With Customers: Send follow-ups, thank-you messages, and exclusive offers to build a connection.

By prioritizing NPS as an ecommerce KPI, you’re not just measuring satisfaction; you’re fostering customer loyalty that fuels sustainable growth and word-of-mouth referrals.

11. Refund and Return Rate

The refund and return rate measures the percentage of total orders that customers return or request a refund for. A high return rate can signal issues with product quality, inaccurate descriptions, sizing problems, or poor customer expectations.

Tracking this ecommerce KPI is crucial for minimizing losses and improving customer satisfaction.

How to Calculate

Refund and Return rate = (Refunded Orders / Total Orders) x 100

Example Scenario:

Let’s say your Shopify store processed 1,000 orders last month, but 80 of them were returned or refunded due to sizing issues or product defects.

Return & Refund Rate = (80 / 1,000) × 100 = 8%

This means 8% of your total sales resulted in returns, which could indicate an opportunity to improve product descriptions, quality control, or customer expectations.

✅ Tips for Reducing Refund & Return Rates

You can slash your refund and return rates down in the following ways:

1. Enhance Product Descriptions: Use high-quality images, detailed specs, and size charts to set clear expectations.

2. Improve Quality Control: Test products before shipment to minimize defects and dissatisfaction.

3. Offer Virtual Try-Ons or Size Guides: If you sell apparel or accessories, provide AI-powered tools for better sizing accuracy.

4. Streamline the Return Process: Make returns hassle-free with clear policies while gathering feedback on why customers return items.

5. Analyze Return Reasons: Track return data to identify patterns and proactively address common issues.

Always analyze your refund and return rates as ecommerce KPIs so you can enhance customer satisfaction to drive long-term profitability.

12. Gross and Net Profit Margins

Gross and net profit margins are essential ecommerce KPIs that measure your ecommerce business’s profitability. They help determine how efficiently you’re generating revenue after covering costs, ensuring long-term sustainability and growth.

How to Calculate

Gross Margin = (Revenue – COGS) / Revenue x 100

Net Margin = (Net Profit / Revenue) x 100

Example Scenario:

Let’s say you run an online apparel store and generate $50,000 in revenue per month. Your cost of goods sold (COGS) is $20,000, and after deducting all expenses, your net profit is $8,000.

Using the formula:

Gross Margin = (50,000 – 20,000) / 50,000 × 100 = 60%

Net Margin = (8,000 / 50,000) × 100 = 16%

This means that while 60% of your revenue covers direct product costs, only 16% remains as profit after all other expenses.

✅ Tips for Improving Profit Margins

One of the critical ecommerce KPIs, profit margins can go up using the following techniques:

1. Reduce COGS: Negotiate better supplier deals or switch to cost-effective production methods.

2. Increase Average Order Value (AOV): Offer upsells, bundles, or free shipping thresholds.

3. Optimize Marketing Spend: Focus on high-ROI marketing strategies like email automation and retargeting.

4. Monitor Financials Regularly: Use bookkeeping software or professional services to track profitability accurately.

Want to maximize your e-commerce profits while staying compliant with taxes? Let doola handle your formation and tax compliance so you can focus on scaling your business!

How to Track and Optimize These Ecommerce KPIs

Effectively tracking and optimizing ecommerce KPIs requires a data-driven approach that aligns with business goals. Here are a few simple steps to follow:

1. Start by identifying key metrics such as conversion rates, average order value (AOV), and customer acquisition cost (CAC).

2. Use analytics tools like Shopify reports, Google Analytics, or third-party dashboards to monitor real-time performance.

3. Regularly analyze trends, A/B test marketing strategies, and adjust pricing, promotions, and user experience based on data insights.

4. Ensure financial KPIs, like net profit margins and tax liabilities, are factored into decision-making to maintain sustainable growth.

This is where doola’s e-commerce tax experts can help. Beyond helping businesses set up the right financial structure, doola ensures that you stay compliant with sales tax regulations while maximizing deductions and optimizing your financial health.

Common Ecommerce KPI Mistakes Businesses Make

Tracking key ecommerce KPIs is a business imperative, but many online sellers fall into common pitfalls that skew their data, misguide decision-making, and hinder growth.

Here are some common ecommerce KPI mistakes ecommerce businesses make:

❌ Focusing on Vanity Metrics: Prioritizing numbers like website traffic or social media likes without analyzing conversion rates or revenue impact.

❌ Ignoring Customer Lifetime Value (CLV): Overemphasizing short-term sales while neglecting long-term customer relationships and retention.

❌ Not Segmenting Data: Treating all customers the same instead of analyzing segments based on purchasing behavior, demographics, or engagement.

❌ Failing to Track Profitability: Looking at revenue growth without factoring in costs, margins, or return on investment (ROI).

❌ Setting Unrealistic or Undefined Goals: Measuring ecommerce KPIs without clear benchmarks, leading to unfocused business strategies.

❌ Not Adapting to Market Trends: Sticking to outdated KPIs and failing to adjust based on changing consumer behavior and industry shifts.

❌ Overcomplicating KPI Tracking: Using too many KPIs, making it difficult to focus on actionable insights and decision-making.

Avoiding these ecommerce KPI mistakes ensures that ecommerce businesses track meaningful data, optimize strategies, and drive sustainable growth.

Power Your Ecommerce Success With doola’s Formation and Compliance Services

Building a thriving ecommerce business goes beyond tracking KPIs; it requires a solid legal foundation, seamless compliance, and strategic financial management.

That’s where doola flips the script with the following offerings:

1. Business Formation: Whether you need an LLC, C-Corp, or S-Corp, doola handles the entire registration process, ensuring your business is legally structured for growth.

2. Registered Agent Services: Stay compliant with state requirements by using doola’s registered agent services, ensuring you never miss important legal notices.

3. EIN and Tax ID Registration: Easily obtain your Employer Identification Number (EIN) to open a business bank account, hire employees, and handle taxes efficiently.

4. Sales Tax Compliance: Ecommerce businesses must register and comply with state-specific sales tax laws. doola ensures you’re registered in the best states and helps manage ongoing compliance.

5. Bookkeeping & Financial Management: From real-time bookkeeping to catch-up accounting, doola keeps your finances in check so you can focus on growing your ecommerce store.

6. Annual Reports & Compliance Filings: Avoid penalties and legal issues by staying up to date with annual filings, business renewals, and compliance requirements.

Tracking the right ecommerce KPIs is only half the battle; ensuring your business is legally sound and financially optimized is the key to long-term success.

Book a free consultation today and take the first step toward a profitable, compliant, and scalable ecommerce business.

FAQs: Ecommerce KPIs

How can I measure my ecommerce conversion rate?

Use Google Analytics or Shopify’s built-in reports to track conversions.

What tools can I use to track ecommerce KPIs?

Top tools include BigCommerce Reports, Google Analytics, Shopify Analytics, and third-party tracking software.

How do I reduce my cart abandonment rate?

Here are a few useful tips:

• Optimize checkout flow

• Offer multiple payment options

• Use abandoned cart email reminders

How often should I review my ecommerce KPIs?

Regularly, at least weekly for key ecommerce KPIs and monthly for in-depth analysis.