Selling online sounds simple at first: buy a product for $10, sell it for $30, and keep $20 in profit, right? In reality, marketplace fees, shipping costs, ad spend (ROAS), and payment gateway charges quickly eat into your margins before you even notice.
If you want to build a profitable and sustainable ecommerce store, understanding and controlling your financial metrics is step one. In this guide, we’ll cover 3 vital ecommerce metrics and how you can calculate them in seconds.
1. Real Profit Margin
Your true profit margin isn’t just the difference between cost price and retail price. To get an accurate picture, you need to account for:
- Cost of Goods Sold (COGS)
- Platform fees (Shopify, WooCommerce, Amazon FBA)
- Payment processing fees (Stripe, PayPal, credit cards)
- Packaging and fulfillment costs
💡 Pro Tip: Avoid manual math errors by using our free Profit Margin Calculator to test different price points before launching a product.
2. Return on Ad Spend (ROAS)
ROAS measures how much revenue every dollar spent on ads (Facebook Ads, Google Ads, TikTok Ads) brings back to your business.
If your ROAS falls below your break-even point, you’re essentially paying to generate sales. Find your baseline quickly with our free ROAS Calculator.
3. Customer Acquisition Cost (CAC)
CAC tracks how much it costs to acquire a single paying customer. If your CAC exceeds your per-order profit margin, scaling up will drain your cash flow instead of building wealth.
Track Your Sales & Margins in Real Time
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Knowing your numbers isn’t just about accounting—it’s the foundation for making growth decisions without risking your profits. Explore our full library of free calculators and toolkits to keep your store on target!