Ecommerce & Digital
What Your Ecommerce Metrics Are Not Telling You
1 May 2025
Ecommerce generates more data than almost any other business model. Every visit, every click, every abandoned cart, every purchase, every return is captured and available for analysis. The volume of available data creates an illusion of insight. Most ecommerce businesses are looking at a lot of numbers and understanding a limited amount about the actual health of the operation.
The metrics that get the most attention are often the least useful for decision-making. Revenue and orders are outcomes, not drivers. Sessions and page views tell you about traffic volume but not about what is generating it or whether it is the right traffic. Conversion rate is useful but a blended number that hides more than it reveals.
The metrics that mislead
Blended conversion rate. A single conversion rate across all traffic sources hides enormous variation. Organic search traffic that finds you for a specific product query converts at a very different rate from Facebook retargeting traffic. Email marketing converts differently from cold paid social. If your blended conversion rate is 3%, your organic branded traffic might be converting at 8% and your cold prospecting traffic at 0.4%. These require different responses and the blended number masks both.
Revenue without margin. Revenue growth that comes from promotional discounting, from a channel mix shift toward lower-margin products, or from a category that is generating high returns can look healthy at the top line and be deteriorating at the contribution level. Revenue is not the measure of a healthy ecommerce business. Contribution per channel and per product, as shown in a properly structured ecommerce P&L, is.
ROAS without knowing your margin. Proper Amazon analytics go beyond ROAS. Return on ad spend tells you how many pounds of revenue each pound of advertising generated. It tells you nothing about whether that revenue was profitable. A ROAS of 4x on a product with 80% gross margin is excellent. A ROAS of 4x on a product with 30% gross margin, after accounting for fulfilment, returns, and payment processing, may be loss-making. ROAS needs to be interpreted in the context of the margin structure it is operating within.
Email open rates and click rates. These are engagement metrics. They tell you whether people are opening and clicking, not whether the email is generating revenue or profitable customers. An email sequence with mediocre open rates that generates strong revenue is better than one with excellent open rates and low conversion.
The metrics that actually drive decisions
Customer acquisition cost by channel and by cohort. What does it cost to acquire a customer through each channel? And for cohorts acquired in different periods or through different channels, what is the revenue generated per customer in the twelve months following acquisition? This tells you which acquisition channels are generating valuable customers, not just any customers.
Lifetime value by acquisition source. Customers acquired through different channels often have different lifetime values. A customer acquired through organic search for a specific product query is often a higher-intent, higher-value customer than one acquired through a broad awareness campaign. Knowing this allows channel investment to be allocated rationally.
Repeat purchase rate. What percentage of customers who buy once buy again within twelve months? This is one of the most important signals about product-market fit and customer satisfaction. A business with a high repeat purchase rate has built something customers value. A business with a low repeat rate is running an acquisition treadmill.
Contribution margin by SKU. Not gross margin. Contribution margin, which includes fulfilment, return rate data, and any platform fees attributable to that SKU. The products that look profitable on gross margin and are not once all variable costs are included are the ones that need to be repriced, reformulated, or discontinued.
Maebh Collins is a Chartered Accountant (FCA, ICAEW) with twenty years of operational experience building ecommerce analytics frameworks and commercial reporting across multiple channels.
Maebh Collins is a Chartered Accountant (FCA, ICAEW), Big 4 trained, with twenty years of experience building and running international businesses. She specialises in finance transformation, ecommerce operations, and digital strategy.