Flying blind in your online shop? These are the 4 e-commerce KPIs you need to know

Want to know exactly what’s happening in your shop? Only by understanding your numbers can you react early to dips in sales, fluctuating visitor numbers, or looming shortages. That’s exactly where KPIs come in.

We’ve summarized what "Key Performance Indicators" are all about and which metrics in e-commerce really determine success or failure.

What are KPIs and why are they your early warning system?

KPI stands for Key Performance Indicators – they measure the success, performance, or capacity utilization of your business.

Why should you bother with them? It’s simple: by regularly tracking your KPIs, you can spot deviations from your targets before they become problems. This allows you to adjust the right levers in time, refine your processes, and save yourself a lot of stress.

Important: Metrics must be SMART to be truly useful:

• Specific: Is the goal concrete?
• Measurable: Are there clear numbers?
• Achievable: Is everyone on board?
• Realistic: Is the goal attainable?
• Time-bound: By when should the goal be achieved?

Pro tip for Billbee users: Much of the data for your KPIs is already available in your tools. In Billbee, for example, you can use the Reports section to export important data on your sales and items, allowing you to calculate your key figures with minimal effort.

The 4 most important KPIs for your e-commerce success

There is an endless amount of data in online retail. To keep you from getting overwhelmed, we are focusing on the four most important metrics.

Metric #1: Average Order Value (AOV)

The Average Order Value (AOV) indicates how much a customer spends on average per purchase.

Why this is important: A higher AOV means more revenue with the same advertising costs.

‍Calculation:Total revenue / number of orders.

• Example: If your AOV is €35, you could offer free shipping on orders over €40. This encourages customers to add one more small item to their cart.
• Tip: Use cross-selling ("Customers also bought...") to strategically increase order value.

Metric #2: Conversion Rate (CR)

The conversion rate shows you what percentage of your shop visitors actually make a purchase.

Why this matters: A low CR despite high traffic points to issues with shop design, the checkout process, or pricing.

‍Calculation: (Number of purchases / Number of visits) * 100.

• Benchmark: In e-commerce, the CR is typically between 2% and 5%.
• Tip: Optimize your checkout process. You can find out how to do this in a Shopify store, for example, in our blog post on conversion rate optimization.

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Metric #3: Return Rate

Returns are the "profit killer" in e-commerce. They cause high costs for logistics and personnel.

Why this matters: A high rate often indicates that customer expectations are not being met.

‍Calculation: (Number of returns / Total number of orders) * 100.

• Action: Analyze exactly which items are frequently returned. Is it due to poor product images or inaccurate descriptions? How to avoid misunderstandings and write truly great product descriptions, we show you here

Metric #4: Days Sales Outstanding (Payment terms)

This metric measures the time between invoicing and the actual receipt of payment.

Why this is important: If it takes too long for the money to land in your account, it can jeopardize your liquidity.

‍Calculation: (Average accounts receivable / Revenue) * 365 days.

• Additional benefit: Short payment terms improve your rating with banks and suppliers.
• Tip: If you offer payment by invoice, you should use an automated dunning process. The legal and accounting basis for this is provided by your accurate outgoing invoicesBillbee helps you keep track of your payment statuses and payment reminders efficiently.

Conclusion: Data is the foundation for growth

Whether it's your average order value or return rate – start measuring these figures regularly. It’s the only way to make decisions based on facts rather than gut feeling.

Which metric is most important to you this month? Take a look at your reports right now!

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Cover image by Lukas on Pexels