The holiday season is nearly over! Now that you can relax and breathe a little, you have the opportunity to examine how you’ve performed this season! Looking at key e-commerce metrics will help you plan the future of your business.
There are two methods you can use to gauge the success of your holiday sales: you can compare your sales to previous quarters or to previous holiday seasons. Once you have collected your key e-commerce metrics, you can gauge and map out how you are going to tweak your approach and improve in the future. Bottomline: Knowing your metrics is key to being successful.
Start by looking closely at a few key e-commerce metrics. We will go into more details about metrics later, but for now, what you need to know is that metrics are a way to track your sales and your profits on a month-by-month, week-by-week, day-by day and even hour-by-hour. Sometimes metrics are referred to as Key Performance Indicators.
The 3 key metrics we suggest that you collect and examine:
Number of sales (overall and per product)
The number of sales is an easy metric to collect. No calculation goes into this. Simply pull how many total sales are there. Drill down on your metrics. Look at your sales per day, per month and per season (or quarter). What days performed best? Which were worse?
For our purposes, you'll want to compare the sales you made this holiday season (November 27 - December 23) compared to last year's holiday season (November 28 - December 23) or if you didn't have a last holiday season compare November 27 - December 23 to the previous periods: October 31 - November 26, October 3 - October 30 and so on. Then ask yourself, did you do better last year or this year? This season or in October?
Profit per-products sold
This is your total amount you made per product. For example let’s say you have five products, Items A through E, you will want to take the total sales and subtract your cost for the products; this is all of your cost, cost of the items, employees, rent, etc. If you sell online and pay for the cost of shipping your product, include your shipping cost as part of the cost.
Your total sales for the week of November 30 - December 6 were: $4243.22
The cost for products you sold was: $1326.05
Shipping for products you sold was: $595.70
Therefore, your total profit for products is: $2321.47
Once you are armed with that calculation, you will have the opportunity to tweak and refine your process and cost to increase your profits in the future. If you are comfortable with the total profit you've made this holiday season, you can head into the new year confident that you've made the right decisions about your costs.
Along with where your buyers are coming from, you also want to consider how much you are spending on your advertising for each of those options. You want to be advertising in more than one way; let the numbers from this season guide you when you're making advertising decisions in the new year and in Holiday Season 2016.
After you have your metrics, you just need to then compare the two and see how they differ to see if you were more successful than previous months, quarters or holiday seasons. You may also want to consider if you reached the level of success you were hoping for. If not, you will want to research and consider why.
There are a number of ways to gauge the success of the season, - total number of sales, profit margin, new customers, etc. It all depends on your goals. If you have twice as many sales this year than last year, but your profit is the same because it was smaller items, does that count as a success for you? Key e-commerce metrics and the goals you set around them will help you to gauge success and create goals ahead of time.