The year is well underway and if you’re like most ambitious merchants, your e-commerce business is probably running like a well-oiled machine. But are you ready for the increase in traffic, sales, customer inquiries, and general chaos that Q4 brings?
Don’t let the second half of the year slip by without taking time to pause, evaluate, and gear up for an amazing H2.
Not sure where to start? We’ve got you covered with e-commerce KPIs for every area of your business.
Mid-Year E-commerce Checkup:
- Product Development and Sourcing
- Storage and Warehousing
- Marketing and Advertising
- Customer Service
- Payments and Technology
- Funding and Financial Planning
Why an E-commerce Checkup Now?
After the holidays, most e-commerce businesses hunker down, assess the year’s performance, and adjust for the coming year. But the reality is one annual e-commerce checkup likely isn’t enough.
If something goes wrong in early Q2, do you really want to let it lie undiscovered for almost a year?
The first half of the year is a great time to test new growth tactics and the mid-year e-commerce checkup allows you to refine those strategies before going full speed ahead into the busy second half.
E-commerce Checkup Tips for 6 Key Areas of Your Business
1. Product Development and Sourcing
Let’s start at the beginning with your product portfolio.
Whether you’re creating and refining your own products, or sourcing a curated selection for your online store, it’s essential to keep a pulse on this area.
🔑 KPIs to Check:
Product Ratings
Ratings and reviews are your best indicators of how customers are perceiving your products. Quantitative ratings are also great for providing a quick reading of your current strengths and weaknesses.
✅ How to Nail It in H2:
If you need more ratings and reviews to increase your visibility in Q4, now is the time to ask for them. Once the reviews are rolling in, act on any feedback you receive. This increases loyalty among your existing customers while helping you generate credible social proof to win sales from new customers.
Return Rates
Ratings reflect what customers say; return rates reflect what customers do. By measuring the percentage of products returned, you can quickly catch product quality issues or inaccurate listings.
✅ How to Nail It in H2:
If you’re seeing lots of returns, your products aren’t meeting customers’ expectations. This is likely for one of two reasons: Either your product quality is suffering, or expectations weren’t properly set during the sale. If quality hasn’t changed but returns are up, spend time optimizing your product listings with detailed information, images, and size guides.
Cost of Goods Sold
COGS measures the costs of producing or acquiring the products you sell. Keeping tabs on this metric is a good gut check to make sure you’re still sourcing efficiently and keeping profit margins healthy.
✅ How to Nail It in H2:
There are two levers you can pull to impact COGS: production costs and pricing. Negotiating better deals with suppliers and streamlining your supply chain can make a big difference here. Don’t forget to keep an eye on your other brands’ pricing strategies to make sure you’re staying competitive.
2. Storage and Warehousing
You already know inventory management is one of the biggest challenges in the game of e-commerce. High storage fees and complex warehousing processes can quickly eat into your Q4 margins. Here are some ways to increase efficiency and boost customer satisfaction.
🔑 KPIs to Check:
Inventory Turnover
This ratio shows how many times you sell and replace your inventory during a given period. It’s calculated by dividing the cost of goods sold by the average value of inventory for a specific product.
✅ How to Nail It in H2:
If your inventory is hanging around in the warehouse for a long time, it can drive warehousing costs way up. Focus on demand forecasting and identifying key patterns in your seasonality.
Order Accuracy
This metric is your percentage of error-free orders. Striving for high accuracy leads to higher customer satisfaction, fewer returns, and reduced costs to re-ship incorrect orders.
✅ How to Nail It in H2:
Analyze any past stockouts or overstocks and look for ways to improve your replenishment strategy ahead of Q4. Inventory planning tools like Flieber or Syrup can help you improve your order accuracy by adjusting your forecasts to include past outliers.
Order Cycle Time
This is the time from when you receive an order to when it’s delivered to the customer. It includes order processing, picking, packing, and shipping time.
✅ How to Nail It in H2:
In today’s era of Prime two-day delivery, a dragging order cycle can frustrate your customers. Focus on getting this metric down by optimizing your fulfillment process, whether that be through Fulfillment by Amazon or an alternative provider.
3. Marketing and Advertising
Whatever marketplaces you’re selling on, the marketing and advertising goalposts are always changing. An e-commerce checkup midway through the year is crucial to make sure you’re not wasting money on strategies that are no longer effective.
🔑 KPIs to Check:
Conversion Rates
In marketing, your conversion rate is everything. Tracking conversion rates helps you determine the effectiveness of your marketing and ad campaigns, website design, and other promotional efforts.
✅ How to Nail it in H2:
Optimizing conversion rates comes down to user experience. You need to do everything you can to reduce friction in the purchasing process. Audit the shopping experience across all your sales channels and remove any conversion barriers for a streamlined, conversion-friendly experience.
Acquisition Cost
Your customer acquisition cost (CAC) is the total cost of acquiring a new customer. Combine your marketing, advertising, promotions, and sales costs for a given period, then divide by the number of new customers for that period.
✅ How to Nail It in H2:
Nothing dampens the celebration of getting new customers more than seeing how much it costs to win them over. If acquisition costs are high, examine the costs of each marketing and advertising channel to see what you can reduce or cut.
Return on Ad Spend
ROAS measures the revenue generated from advertising compared to the costs of the ads. It helps you evaluate the profitability and effectiveness of specific campaigns or channels. Monitoring ROAS helps you identify the best marketing strategies, and allocate your budget accordingly.
✅ How to Nail It in H2:
Optimizing ROAS is similar to optimizing acquisition costs. Dig into the data and identify the weakest links in your advertising strategy. Taking a deep dive every quarter can help ensure you’re not throwing money into a tactic that isn’t generating revenue.
4. Customer Service
In the world of online shopping, keeping your customers happy is at the top of the list for winning brands. Here’s how to stay in tune with your customers’ needs and experiences.
🔑 KPIs to Check:
Customer Satisfaction
Customer feedback is worth its weight in gold. You can measure satisfaction in a variety of ways, from post-purchase surveys to NPS scores and customer reviews. This will help you gauge the effectiveness of your efforts to “surprise and delight” your customers ahead of a highly competitive holiday season.
✅ How to Nail It in H2:
When measuring customer satisfaction, look for not only dissatisfaction indicators but also changing customer needs and expectations. This can help you stay ahead of the curve and cater to your customers’ needs ahead of the competition.
Service Response Time
As a customer, there’s nothing more off-putting than a brand that doesn’t respond to your messages. This metric is the average time it takes your business to respond to customer inquiries — whether through phone, email, chat, or social channels. Keeping this time as short as possible creates a great customer experience and increases your conversion rates.
✅ How to Nail It in H2:
It’s great to be ambitious, but sometimes trying to be everywhere at once just isn’t sustainable. Look at your service response time and ask: Do you need to reduce the number of communication channels? Or outsource responses on one or more channels?
Problem Resolution Time
As hard as you work to prevent customer complaints, they are still bound to happen. And when they do, it’s crucial to resolve them as quickly as possible. Reducing resolution time helps minimize any negative impact on the customer experience and your brand reputation.
✅ How to Nail It in H2:
As legendary salesman Zig Ziglar said, “The complaining customer represents a huge opportunity.” By embracing complaints and responding quickly, you can turn a “bad” situation into a memorable customer experience.
5. Payments and Technology
Your customers’ experience with your payment tech can make or break your success. If it works smoothly, they won’t give it a second thought. But even the tiniest glitch can frustrate customers and lead to an increase in abandoned carts.
🔑 KPIs to Check:
Average Order Value
AOV is the average amount your customers spend per transaction. Monitoring this metric helps you keep a pulse on your pricing strategies, product offerings, and upselling and cross-selling efforts.
✅ How to Nail It in H2:
Want more revenue in H2? Why acquire more customers when you could simply sell more to the customers who are already buying? Suggest “recommended products” during checkout, offer free shipping thresholds, create limited-time offers, or provide a buy-now-pay-later option.
Website Uptime
This KPI measures the percentage of time your website is accessible to customers without any issues. Since any downtime is time your store’s not making money, this is a critical metric in your e-commerce checkup.
✅ How to Nail It in H2:
Watch for any dips or downward trends in uptime. A gradual deterioration could mean it’s time for a website audit and possibly an overhaul. If that’s the case, you want to get that done ahead of Q4.
Cart Abandonment Rate
You knew this one was coming. Cart abandonment is a perennial challenge for retailers — and one that you can’t afford to overlook. Analyze your cart abandonment rate and look for specific products or customer segments that could benefit from a little extra nudge at checkout.
✅ How to Nail It in H2:
It can be tricky to figure out why your abandonment rate has increased. The top reasons customers abandon carts are high extra fees, an account creation requirement, and a complicated checkout process. If customers are fleeing your cart, give those areas some thought. Can you offer free shipping and adjust your prices accordingly? How about offering guest checkout?
6. Funding and Financial Planning
Here’s the kicker about being a business owner: You can get all these other areas exactly right — but if your high-level financial strategies are off, your business simply won’t thrive. You need a handle on both your day-to-day financial operations and the long-term vision.
🔑 KPIs to Check:
Gross Profit Margin
This KPI is the percentage of revenue remaining after deducting the cost of goods sold and it’s a key way to measure the profitability of each product in your portfolio. Monitoring gross profit margin helps you assess your pricing, cost management, and inventory strategies.
✅ How to Nail It in H2:
Many factors impact gross profit margin, so if yours needs work, you’ll first have to pinpoint which factor is the culprit. You might need to negotiate better pricing with suppliers, optimize your inventory warehousing costs, or work on adjusting your pricing.
Customer Lifetime Value
Your relationships with customers are your most valuable assets. CLV is one way to monitor the strength of those relationships. It factors repeat purchases, average order value, and your retention rate to measure loyalty and, ultimately, the revenue potential of the relationships you work hard to foster.
✅ How to Nail It in H2:
To optimize your CLV, try personalizing your marketing messages and customer service levers. Are there any obvious places to improve, such as personalizing your emails with product suggestions, or adding a customer support chatbot to your website?
Cash Conversion Cycle
This metric is all about the benjamins. Namely, how well you’re managing your cash flow. Your cash conversion cycle is the time it takes for you to convert your investment in inventory into cash through sales. If your cash is tied up in this cycle too long, it can hold you back from investing in key Q4 ad campaigns and inventory, while your competitors continue to move ahead.
✅ How to Nail It in H2:
Accelerating your cash conversion cycle comes down to cash management. If your cash is sitting in a warehouse as inventory for months, you can’t invest it in your business’s future.
If this sounds familiar and you’ve already optimized your warehousing KPIs, look to your funding strategy for help. How can you increase your working capital to cover day-to-day expenses while investing your revenue in strategic initiatives that will keep you ahead of the game in H2?
E-commerce Checkup Prescription: Keep Your Growth On Track with SellersFi
You know your business better than anyone. Don’t be afraid to customize your mid-year e-commerce checkup to include the most impactful metrics for your unique strategy.
For a streamlined starting point, try Sellers Signals. It’s a simple (and free!) all-in-one analytics platform that helps you track your core KPIs and offers business-boosting tips customized to your needs. Simply connect your sales channels and get a clear, consolidated view of all your key business data. Register now for your free SellersFi account and unlock innovative tools and solutions that will help you scale your business to new heights.
