Ecommerce metrics glossary
The numbers that decide whether an ecommerce business makes money — each with a plain definition, the formula and a worked example.
Blended Profit
Blended Profit is revenue minus ad spend, shipping, product costs and returns — the profit number Analify uses to judge an ecommerce business.
ROAS
ROAS (return on ad spend) is the revenue an ad platform credits to its ads divided by what you spent. Here is the formula, an example and its limits.
Blended ROAS
Blended ROAS is total store revenue divided by total ad spend across every channel. Formula, example and how it differs from platform ROAS.
MER
MER, the marketing efficiency ratio, is total revenue divided by total marketing spend. Formula, example, and how it compares with blended ROAS.
POAS
POAS, profit on ad spend, divides profit by ad spend instead of revenue. Formula, example, and why the profit definition matters.
Break-even ROAS
Break-even ROAS is the ROAS at which ads cover their own cost and leave no profit. Calculate it from your contribution margin.
Break-even CPA
Break-even CPA is the most you can pay in ad spend to get one order without losing money. Formula and a worked example.
Contribution margin
Contribution margin is revenue minus variable costs — what each sale contributes to fixed costs and profit. Ecommerce formula, CM1–CM3 and an example.
CAC
CAC, customer acquisition cost, is acquisition spend divided by new customers. Ecommerce formula, an example and common mistakes.
Blended CAC
Blended CAC is total marketing spend across all channels divided by all new customers. Formula, example and when to use it.
Gross margin
Gross margin is revenue minus cost of goods sold, as a percentage of revenue. Formula and an ecommerce example.
Net profit
Net profit is what is left after every cost, fixed and variable. How it differs from gross profit, contribution margin and Blended Profit.
COGS
COGS, cost of goods sold, is the direct cost of the products you sold. Ecommerce definition, example and why it must be kept up to date.
Landed cost
Landed cost is the total cost of getting one unit into your stock: product, freight, duties and fees. Formula and example.
AOV
AOV, average order value, is revenue divided by the number of orders. Formula, example and how it links to profit.
Customer lifetime value (LTV)
Customer lifetime value is the revenue or profit a customer brings over time. Historical LTV formula, example and LTV:CAC.
Return rate
Return rate is the share of delivered orders that customers send back. Formula, example and how it differs from RTO.
RTO (return to origin)
RTO, return to origin, is a shipment that is not delivered and comes back to the seller. Formula, example and its cost.
COD reconciliation
COD reconciliation matches delivered cash-on-delivery orders with the cash the courier collected and paid out. Steps and an example.
Profit per order
Profit per order is what one order earns after product cost, shipping, fees and its share of ad spend. Formula and example.
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