Evaluate your e-commerce Website with Simple Metrics

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It is true that you cannot manage your e-commerce website unless you are measuring its effectiveness at regular period. The very first step in this regard is to get a breakdown of the traffic by using some form of analytics. Candid has an extensive experience and sound knowledge of e-commerce sites & suggests clients to use Google Analytics to evaluate their site's performance.

When you are tracking the numbers on your website, you will still need to do some calculation to know how it's performing. Follow these four basic methods that are highly helpful for e-commerce websites:

Conversion Rate

When a person visits your site and does what you want him to do, this is called conversion. It could be anything from making a purchase to leaving a comment in the section.

Identify the goal pages in Google Analytics to track your total conversion rate. You can make the thank you page as your goal that will come after somebody places an order.

The next step is to divide the total conversions by the number of visitors. You can see the total traffic in numerous ways. The highest result would be achieved by considering page views but this is least accurate because the same visitor can see other pages also.

You can also consider the total visits, which tells the number of people who visited your site including the visitors who returned again. An absolute unique visitors option is also present, where you won't get the record of people visiting the page for the second or more time.

It is better to consider visits for getting accurate conversion rate because it is more conservative and accurate measure for the calculation.

The formula for finding out conversion rate is:

Conversion Rate = Total Conversions/Visits

Cost per Conversion

If you have a high conversion rate, it doesn't mean you are doing a good business. Cost per Conversion is a more accurate way of judgment. You can calculate Cost per Conversion by:

Cost per Conversion = Monthly Website Expenses/Total Conversions

Do not forget to consider all the costs of your website including web design and development, SEO, online marketing, web hosting, PPC, blog writing and more.

Suppose you are spending $1,817 per month and the number of conversions in the month are 50. Then you Cost per Conversion would be $36.34.

If you are making more than $36.34 on every conversion, you are getting benefited.

Average Profit per Conversion

If you know your average profit or loss on every conversion, it will help you in making a budget and planning for future. You can also set online sales goals after knowing this. The formula is:

(Gross Revenue from Website – Total Costs)/Total Conversions = Average Profit per Conversion

The total costs should include all the costs apart from web costs.

Abandonment Rate

It describes the number of people who started to convert on your website and dropped out later. If the rate is high, it means the site is inefficient or you have to check out the conversion process. Abandonment rate is calculated by:

(Number of Visits to the Conversion Page – Number of Visits to the Goal Page)/Number of Visits to the Conversion Page

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