E-commerce KPIs: the quantified glossary

An e-commerce KPI (Key Performance Indicator) is a figure used to make a decision: continue, correct, or stop. Twelve are enough to manage a store, and they fall into four categories: profitability (gross margin, contribution margin, break-even point), acquisition (CAC, ROAS), conversion (conversion rate, average order value, cart abandonment), and duration (LTV, LTV/CAC ratio, repurchase rate, first-channel share).

We wish we had known sooner. With Superbon, our solid cosmetics brand, we had a 79% gross margin and a ROAS of 5. Two figures that any KPI list would rank in the green. Yet the brand was never able to fund a team. We tell this story, backed by figures, in our book Creating Your Brand in the Age of AI. This article revisits the calculations, page by page: the profitability and acquisition indicators are broken down using this same real-life case, while the others are defined with their formula and threshold.

The 12 e-commerce KPIs in one table

Here are the twelve indicators, their formula, and the benchmark we use. The thresholds come from the book's checklists and what we observe in the stores we support.

The following sections break down these indicators one by one, in the order they occurred for Superbon.

Gross margin: the first figure, and the most misleading

Gross margin is what remains of the pre-tax sale price once the product is paid for: raw materials, packaging, manufacturing, and inbound shipping. It is calculated by dividing the difference between the pre-tax sale price and the cost of goods by the pre-tax sale price.

Our solid shampoo sold for €9.90 including tax, or €8.25 pre-tax. Its cost of goods was €1.70 per unit, packaging included. The unit gross margin therefore reached €6.55, or 79%.

“On paper, it was comfortable: a 79% gross margin. Enough to invest, test, and grow.” Creating Your Brand in the Age of AI, p. 88

Target threshold: at least 55% gross margin after deducting all direct costs (p. 106). Superbon was well above this. Two mistakes often skew this calculation:

• Calculate using the price including tax. VAT does not belong to you. Of the €9.90 collected, €1.65 goes back to the state.
• Forget cost items. The cost of goods includes packaging, labor, logistics, storage, and inbound shipping costs, not just materials.

Gross margin tells you if the product is viable. It says nothing about what each sale costs. That is the role of the following two indicators.

ROAS and CAC: what advertising brings in, what a customer costs

ROAS (Return On Ad Spend) measures what each euro of advertising brings in: it is the generated pre-tax revenue divided by advertising spend. If €1,000 in Meta advertising generates €5,000 in sales, the ROAS is 5. That was Superbon's.

“ROAS measures revenue, not profit. And this revenue includes VAT, which will have to be paid back to the state.” Creating Your Brand in the Age of AI, p. 90

CAC (Customer Acquisition Cost) measures what a new customer costs: it is advertising spend divided by the number of new customers acquired. With €1,000 spent, €5,000 in sales, and an average order value of €30 including tax, Superbon gained about 167 customers, each order counting as a new customer here. Its CAC was therefore €6 (p. 91).

ROAS is not compared from one brand to another. On Cabania, our cabin bed brand, it never fell below 9. A cabin bed and a solid shampoo do not have the same price, the same purchase cycle, or the same margin. ROAS is judged by what remains once all costs are paid.

Where to find these figures? In Shopify, the Growth tab then Attribution shows sessions, orders, and revenue by channel. Facebook and Google Performance Max campaigns do not show their cost or ROAS there: you must read them in Meta Ads Manager and Google Ads, as we detail in our Spring 26 review. To structure your campaigns, see our Meta Ads guide for Shopify.

Contribution margin: what really remains per order

The contribution margin per order is what remains of the gross margin once customer acquisition and order costs are paid: acquisition cost, platform and payment fees, returns, and after-sales service. It is this, and not revenue, that funds salaries, fixed costs, and investments.

With an average order value of three products, Superbon generated €19.65 in gross margin per order. Here is what remained, before and after the ROAS drop.

In April 2021, Apple rolled out iOS 14.5 and App Tracking Transparency. Superbon's ROAS fell from 5 to 2.5, then to 2. CAC went from €6 to €15, sometimes more (p. 92 and 93). Same product, same site, same gross margin: the contribution margin was cut in five.

“Don't settle for selling more: sell better.” Creating Your Brand in the Age of AI, p. 120

The book's checklist requires a positive contribution margin on each of your channels, and a gross margin capable of funding acquisition even if CAC doubles overnight (p. 107 and 108). Superbon checked both boxes. A positive contribution margin is not enough: it must be high enough to reach the following threshold.

Break-even point: how many orders to cover your costs

The break-even point in orders indicates how many orders per month cover your fixed costs. It is calculated by dividing monthly fixed costs by the contribution margin per order.

A net salary of €3,000 represents about €4,500 in employer costs. With an €11.25 contribution margin, you need 400 orders per month to fund it. Superbon plateaued between 300 and 400 orders (p. 92). With €2.25, you need 2,000 (p. 93).

For a minimal structure, with two paid founders, one employee, and fixed costs, the book's calculation results in about 1,200 orders per month, or €36,000 in monthly pre-tax revenue (p. 92).

“We were stuck on a subsistence plateau.” Creating Your Brand in the Age of AI, p. 92

The benchmark of our checklist: your price must allow you to fund at least two full-time salaries from 1,000 to 1,500 monthly orders (p. 108).

Conversion rate and average order value: the reverse calculation

Conversion rate, also called conversion rate, is the share of visits that end in an order: the number of orders divided by the number of visits (sessions, in Shopify), multiplied by 100. Average order value (AOV, for Average Order Value) is the average amount of an order: revenue divided by the number of orders.

These two figures are first used to build a reverse goal. The book's example (p. 121):

1. You are aiming for €50,000 in revenue next month.
2. Your average order value is €100: you need 500 orders.
3. Your conversion rate is 2%: you need 25,000 visits.

A few benchmarks from our projects. PERS, a skincare protocol launched in 2025, converted at 5%. The redesign of Maroquinerie Renouard brought a 25% increase in conversion, with an average order value of €180. At the other extreme, we saw a beauty brand spend €10,000 per month on Facebook posts for a site that converted at 0.3% (p. 6). The ranges by sector and the levers are in our article on Shopify conversion rate.

Three precautions before drawing a conclusion:

• Segment. A brand we support broke down its conversion rate by traffic source, device, and hour. It discovered that it dropped on mobile during the weekend due to a loading time that was too long. Correction in 48 hours, 17% more conversion on the weekend (p. 207).
• Check your comparison base. Since September 21, 2026, Shopify measures sessions differently. The conversion rate, cart addition rate, and bounce rate may have changed without your sales moving. Treat this date as a new starting point.
• Keep the same scope. Average order value is calculated pre-tax or including tax, with or without shipping costs, before or after discounts and returns. No matter the convention, as long as you do not change it from one month to the next.

To act on average order value, see our upsell techniques on Shopify.

Cart abandonment rate completes these two figures: it is the share of created carts that do not become orders. It hovers around 70%, and an effective reminder sequence recovers between 10% and 20% of these carts (p. 169). We detail the method in our article for recovering abandoned carts.

LTV and repurchase rate: value over time

LTV (Lifetime Value) measures the total revenue generated by a customer over their entire relationship with your brand: the average value of an order, multiplied by the average number of orders per year, multiplied by the average duration of the relationship in years. A customer who spends €50 per order, four times a year for three years, has an LTV of €600 (p. 99).

The LTV/CAC ratio relates this value to what the customer cost. With an LTV of €600 and a CAC of €40, the ratio is 15 to 1. Warning: this LTV is revenue. To set an acquisition budget, compare the CAC to the margin that this revenue leaves.

“If your LTV is €50 and your CAC is €40, you are barely surviving.” Creating Your Brand in the Age of AI, p. 99

The book sets the minimum ratio at 3 to 1 (p. 107). Not all brands have obvious recurrence. At Cabania, it is unlikely to sell two or three cabin beds to the same person. The challenge is therefore to increase LTV in other ways: broaden the range to the entire child's bedroom (mattresses, bed linen, storage, decoration) and work on referrals (p. 100).

Repurchase rate is the share of your customers who order at least a second time, over a given period. It matters because a customer who has already purchased costs 5 to 10 times less to reactivate than a new customer to acquire (p. 123). Post-purchase email sequences are a direct lever, detailed in our Klaviyo guide for Shopify.

First-channel share: the resilience KPI

First-channel share is the weight of your main sales source in your revenue. It rarely appears in e-commerce KPI lists. Yet it is the indicator that should have alerted us: 85% of Superbon's sales came from Meta advertising (p. 90).

“When one channel represents more than 70% of your revenue, you are in danger. Not because this channel is bad. But because you do not control its rules.” Creating Your Brand in the Age of AI, p. 237

Conversely, one of our customers generates 40% of their revenue through SEO, 35% through email, and 25% through paid advertising. When their advertising costs increased in early 2024, they slowed their paid investments and intensified their email campaigns. Their revenue dropped for one quarter, then went back up (p. 237).

The rule we draw from this: at least three traffic sources. If one collapses tomorrow, you must be able to hold out for at least six months with the other two.

Express e-commerce glossary

The other terms you will encounter in a dashboard or agency quote.

• AOV (Average Order Value): average order value, in English.
• CPA (cost per acquisition): what an action obtained through advertising costs, most often an order. It depends on your conversion rate.
• CPC (cost per click): what a click on an ad costs. It depends on your advertising and your message.
• CPM (cost per thousand): what 1,000 impressions of an ad cost. It depends on your targeting and competition (p. 190).
• DNVB (Digitally Native Vertical Brand): brand born online, which designs its products and sells them directly first. The term was popularized in 2016 by Andy Dunn, co-founder of Bonobos.
• DTC or D2C (Direct to Consumer): direct sale to the consumer. The book defines the DTC pure player as a “brand operating exclusively online, which distributes its products directly to the consumer without intermediaries” (p. 104).
• Price arrow: a comparison grid that shows how your price compares to those of your competitors for comparable formats (p. 105).
• MER (Marketing Efficiency Ratio): total revenue divided by total marketing spend. It is an overall ROAS across all channels, useful when attribution by platform becomes unclear.
• Bounce rate: in Google Analytics 4, the share of sessions with no engagement, meaning less than ten seconds, with only one page view and no key event.
• Conversion rate: synonymous with conversion rate.

Measure better, not more: the monitoring cadence

An e-commerce dashboard is read at three cadences: every day, every week, every month. The risk of flying blind remains the same: measuring everything.

“They create 15 dashboards, track 50 KPIs, and hold weekly analysis meetings. But they never move fast enough.” Creating Your Brand in the Age of AI, p. 213

Our rule: analysis should account for 20% of the time, and execution for 80%. The book separates three horizons (p. 208). Here is how we distribute the twelve KPIs across them.

For weekly monitoring, the book's checklist identifies the three variables that have the greatest impact on profitability, and therefore those to prioritize: CAC, conversion rate, and average order value (p. 136). The principle remains the same at every cadence: “every measure must inform a decision, every decision must be measured” (p. 208).

Key takeaways

Superbon had four indicators in the green: 79% gross margin, a ROAS of 5, a CAC of €6, and a positive contribution margin. Two others were in the red, and we weren't looking at them: an out-of-reach break-even point, with 1,200 orders needed compared to 300 to 400 completed, and a first channel accounting for 85% of sales. The first tells you if a store can pay for a team. The second, if it can survive a shock.

“Because a business without a margin is not a business. It is a sacrifice disguised as ambition.” Creating Your Brand in the Age of AI, p. 109

Superbon's calculations come from the chapter on pricing in Creating Your Brand in the Age of AI, where they are followed by the five forces that determine your pricing freedom. The complete framework is presented in our article on the STELLAR Method.

Would you like to run these calculations with your own figures before a launch, redesign, or migration? Let's talk about your project.