Measuring performance on an e-commerce platform

1. Logistics

Backorder Rate

• Description: It signifies the ratio of orders that cannot be fulfilled at the time of purchase.
• Example: If you received 100 orders last month, but 5 were backordered, then the backorder rate is 5%.
• Calculation: (Number of backorders / Total orders) x 100

Warehouse Capacity Utilization

• Description: Represents how much space is currently being used in your warehouse.
• Example: If your warehouse can store 10,000 units and currently houses 7,000, its utilization is 70%.
• Calculation: (Current inventory units / Total storage capacity) x 100

Rate of Return

• Description: Highlights the frequency of returned products.
• Example: Sold 200 products and 10 were returned? That's a 5% return rate.
• Calculation: (Number of returns / Total products sold) x 100

Inventory Age

• Description: Average time products sit in stock before being sold.
• Example: If winter coats you stocked in October are sold in January, their inventory age is 3 months.
• Calculation: Date of sale - Date of inventory receipt

2. Transport

Fuel Efficiency

• Description: How much distance can be covered per unit of fuel.
• Example: If a truck travels 500 miles on 50 gallons of fuel, its fuel efficiency is 10 miles per gallon.
• Calculation: Total miles traveled / Total gallons of fuel consumed

Vehicle Downtime

• Description: The amount of time vehicles spend inactive due to maintenance or other issues.
• Example: If a van is off the road for 5 days in a month, that's a 16% downtime for that month.
• Calculation: (Downtime days / Total days in the month) x 100

Lost Package Rate

• Description: Proportion of packages that never reach the customer.
• Example: 2 packages lost in a shipment of 500? That's a 0.4% lost package rate.
• Calculation: (Number of lost packages / Total packages shipped) x 100

Cost per Mile

• Description: The cost incurred to transport goods for one mile.
• Example: Spent $500 in transport over 100 miles? The cost per mile is $5.
• Calculation: Total transport costs / Total miles

3. Finance

Operating Expense Ratio (OER)

• Description: How much of your revenue goes into operational costs.
• Example: If your monthly revenue is $50,000 and your operating expenses are $10,000, your OER is 20%.
• Calculation: (Operating expenses / Total revenue) x 100

Current Ratio

• Description: Assesses ability to pay short-term obligations.
• Example: If current assets are $100,000 and current liabilities are $50,000, the current ratio is 2.
• Calculation: Current assets / Current liabilities

Debt-to-Equity Ratio

• Description: Financial leverage indicator showing relative proportion of shareholders' equity and debt.
• Example: If total debt is $200,000 and shareholders' equity is $100,000, the ratio is 2.
• Calculation: Total debt / Shareholders' equity

Days Sales Outstanding (DSO)

• Description: Average number of days to collect payment post-sale.
• Example: If on average it takes 30 days from the sale to payment collection, your DSO is 30.
• Calculation: (Accounts receivable / Total credit sales) x Number of days

4. Marketing

Customer Churn Rate

• Description: The rate at which customers stop doing business with you.
• Example: If you start with 100 customers and lose 5 by the end of the month, your churn rate is 5%.
• Calculation: (Number of customers at start of period - Number at end) / Number at start x 100

Customer Satisfaction Score (CSAT)

• Description: Direct feedback from customers post-purchase.
• Example: If 90 out of 100 respondents say they're "satisfied" or "very satisfied", your CSAT is 90%.
• Calculation: (Number of positive responses / Total responses) x 100

Net Promoter Score (NPS)

• Description: Measures customer loyalty.
• Example: Based on a survey, you categorize responses into promoters, passives, and detractors. If 60% are promoters and 10% are detractors, NPS is 50.
• Calculation: % of promoters - % of detractors

Click-Through Rate (CTR)

• Description: Indicates the effectiveness of your ad or email campaign.
• Example: 100 people saw your ad, but only 5 clicked? That's a 5% CTR.
• Calculation: (Number of clicks / Number of impressions) x 100

5. Merchandising

Gross Margin Return on Investment (GMROI)

• Description: The return you get for every dollar spent on inventory.
• Example: If your gross margin is $50,000 and your average inventory cost is $10,000, your GMROI is 5.
• Calculation: Gross margin / Average inventory cost

Markdown Percentage

• Description: The reduction in selling price, often used to promote sales.
• Example: Originally priced a dress at $100 but sold it for $80? That's a 20% markdown.
• Calculation: ((Original price - Sale price) / Original price) x 100

Shelf Stock Rate

• Description: The rate at which products get restocked on shelves.
• Example: If 500 items are sold and 450 are restocked within 24 hours, the shelf stock rate is 90%.
• Calculation: (Number of items restocked / Total items sold) x 100

Sales per Square Foot

• Description: A measure of space efficiency in brick-and-mortar stores.
• Example: If a 2000 sq.ft. store made $40,000 in sales last month, the sales per square foot is $20.
• Calculation: Total sales / Store square footage

6. Tech

System Uptime

• Description: The total operational time of a website or application.
• Example: If your site was available 720 hours out of a 730-hour month, your uptime is roughly 98.63%.
• Calculation: (Operational hours / Total hours) x 100

Page Load Speed

• Description: The average time taken for a webpage to fully display its content to a user.
• Example: Using tools like Google PageSpeed Insights, if a webpage's loading time is 3 seconds, it's advisable to improve this to under 2 seconds for better user experience.

Database Response Time

• Description: The time taken for a system to retrieve data from its database.
• Example: If users query a product and it takes 0.5 seconds for your database to fetch the result, that's your response time.

API Response Time

• Description: Time taken for an API to send a response.
• Example: Integrating with a third-party payment gateway, if after clicking "pay" it takes 2 seconds to confirm payment, that's your API response time.

Error Rate

• Description: The proportion of all system requests resulting in an error.
• Example: Out of 1,000 page requests, if 10 result in a "404 Not Found" error, your error rate is 1%.
• Calculation: (Number of errors / Total requests) x 100

Security Breach Attempts

• Description: Monitoring and counting unauthorized access attempts.
• Example: If logs show 5 unauthorized access attempts last week, ensure security measures are stringent and review frequently.

Remember, each metric, while significant on its own, gives a holistic picture only when seen in context with others. Regularly monitoring, understanding, and acting on these metrics ensures the robust health and growth of an e-commerce platform.