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What are the most common revenue benchmarks for e-commerce businesses?

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If you run an e-commerce business, you know how important it is to measure your revenue performance and compare it with industry standards. But what are the most common revenue benchmarks for e-commerce businesses, and how can you use them to optimize your growth strategy? In this article, we will explain four key metrics that can help you assess your revenue performance and identify areas of improvement.

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1 Revenue per visitor (RPV)

Revenue per visitor (RPV) is the average amount of revenue generated by each visitor to your website. It is calculated by dividing your total revenue by your total number of visitors in a given period. RPV is a useful metric to evaluate how effective your website is at converting visitors into customers and generating sales. A high RPV indicates that your website has a strong value proposition, a clear user journey, and a compelling product offering. A low RPV may suggest that your website needs to improve its design, usability, content, or pricing.

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Clint Engler

CEO/Principal: CERAC Inc. FL USA..... ?? ????????Consortium for Empowered Research, Analysis & Communication
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E-commerce businesses track several key revenue benchmarks, including gross margin, profit margin, average order value (AOV), conversion rate, customer lifetime value (CLTV), and return on ad spend (ROAS). These benchmarks vary across industries and business sizes, but tracking them allows e-commerce businesses to assess their performance, identify areas for improvement, and set realistic goals for growth.

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2 Conversion rate (CR)

Conversion rate (CR) is the percentage of visitors who complete a desired action on your website, such as making a purchase, signing up for a newsletter, or downloading a resource. It is calculated by dividing the number of conversions by the number of visitors in a given period. CR is a crucial metric to measure how well your website is aligned with your marketing goals and customer expectations. A high CR means that your website is attracting qualified traffic, providing relevant information, and creating a sense of urgency. A low CR may indicate that your website is attracting the wrong audience, providing insufficient information, or creating friction in the checkout process.

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3 Average order value (AOV)

Average order value (AOV) is the average amount of revenue generated by each order placed on your website. It is calculated by dividing your total revenue by the number of orders in a given period. AOV is an important metric to measure how much value you are extracting from each customer and how profitable your business is. A high AOV means that your customers are buying more products, more expensive products, or more frequently. A low AOV may suggest that your customers are buying less products, cheaper products, or less frequently.

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Murtaza husain

Consulting Partner eCommerce at Attrait Solutions
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Average order value is a metric commonly used for profitability and valuation calculations. Almost all cost apart from marketing spent divided by the number of orders being processed for benchmarking. All companies dream and strive to get a higher average order value.

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4 Customer lifetime value (CLV)

Customer lifetime value (CLV) is the estimated amount of revenue that a customer will generate for your business over their entire relationship with you. It is calculated by multiplying your average revenue per customer by your average customer retention rate and subtracting your average customer acquisition cost. CLV is a vital metric to measure how loyal your customers are and how much you can afford to spend on acquiring and retaining them. A high CLV means that your customers are satisfied, loyal, and profitable. A low CLV may indicate that your customers are dissatisfied, churned, or unprofitable.

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Murtaza husain

Consulting Partner eCommerce at Attrait Solutions
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Customer lifetime value is the most important metric in 2 cases: - Repeat purchase of the same product, like health supplements. In this case the acquisition cost can run up to twice the value of the product. But should be maintained at 10% or less of the CLV - Repeat purchase from the same brand at least once a quarter, like clothing In this case the acquisition cost should be maintained at less than the value of the good.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Murtaza husain

Consulting Partner eCommerce at Attrait Solutions
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Customer Acquisition Cost (C.A.C) is an important Metrix as it is a unitized measure of your investment to acquire a new customer. Analyse the same with two other parameters average order value and customer lifetime value this will give you a fare idea of you cashflow and ROI.

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Erdal Akku?

E-Commerce Expert Bringing Mindful Ideas to the Professional World | Experience in Key Account Management | Ex-Amazonian
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I also want to add 'Repeat Purchase Rate' to these benchmarks. The repeat purchase rate can reflect how successful you are in developing long-term customer relationships and building loyalty. It can assist you in making strategic decisions on the path to establishing and solidifying your brand. Among the benchmarks that will be one of the most beneficial for improving your product or service is the 'Repeat Purchase Rate.' Ultimately, the future of your business is directly linked to ensuring that your products are purchased not just once, but 'repeatedly.

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What are the most common revenue benchmarks for e-commerce businesses?

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1 Revenue per visitor (RPV)

2 Conversion rate (CR)

3 Average order value (AOV)

4 Customer lifetime value (CLV)

5 Here’s what else to consider

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