Running a successful online business requires more than listing products and waiting for sales. Whether you sell through Amazon, Mercado Libre, or your own e-commerce platform, monitoring the right Key Performance Indicators (KPIs) is essential to understand performance, control costs, and scale profitably.
Below are the most relevant KPIs every e-commerce entrepreneur should track.
1. Sales and Revenue KPIs
- Gross Sales: The total value of products sold before returns, cancellations, or fees.
- Net Revenue: Gross sales minus returns, discounts, and platform fees.
- Average Order Value (AOV): Net revenue ÷ number of orders. This helps you evaluate cross-selling or upselling strategies.
2. Profitability KPIs
- Gross Margin: (Sales – Cost of Goods Sold) ÷ Sales. Essential to measure product-level profitability.
- Contribution Margin per SKU: Profit after deducting product-specific costs (COGS, shipping, commissions).
- Net Profit Margin: Final profitability after taxes, operating expenses, and marketing.
3. Customer Acquisition and Retention KPIs
- Customer Acquisition Cost (CAC): Total marketing spend ÷ new customers acquired.
- Customer Lifetime Value (CLV or LTV): Average revenue generated per customer during their relationship with your brand.
- Repeat Purchase Rate: % of customers who buy more than once. A high rate indicates loyalty and lower future CAC.
4. Marketing and Conversion KPIs
- Conversion Rate (CR): Orders ÷ total visits. Critical to measure product listings and ads effectiveness.
- Return on Advertising Spend (ROAS): Revenue from ads ÷ cost of ads.
- Click-Through Rate (CTR): Percentage of users who click on your ad or product listing.
5. Operational KPIs
- Fulfillment Rate: % of orders shipped successfully without cancellations.
- Order Defect Rate (ODR): Includes late deliveries, damaged goods, or negative reviews. Amazon and Mercado Libre monitor this closely.
- Return Rate: % of sold products returned. High rates may indicate quality or listing issues.
6. Inventory and Cash Flow KPIs
- Inventory Turnover Ratio: COGS ÷ Average Inventory. Measures how quickly stock is sold.
- Days of Inventory on Hand (DOH): Average number of days inventory lasts before being sold.
- Cash Conversion Cycle (CCC): Days between paying suppliers and collecting cash from sales. Critical for e-commerce businesses that rely on working capital.
7. Selling on Mexican Platforms: RFC Requirement
If you plan to sell on Amazon Mexico or Mercado Libre Mexico, it is important to understand the local tax obligations.
- RFC Registration: Every seller, whether individual or business, must register with the Mexican Tax Authority (SAT) and obtain a Registro Federal de Contribuyentes (RFC). Without this, platforms will not allow you to list products or process payments.
- Electronic Invoicing (CFDI): Mexican regulations require sellers to issue digital tax invoices (CFDI) for every sale. Platforms often integrate invoicing systems, but sellers remain responsible for tax compliance.
- Tax Withholdings: Platforms may withhold VAT (IVA) and income tax (ISR) on behalf of the seller if the seller is not properly registered. Having an RFC ensures correct reporting and potential deductions.
- Physical Address in Mexico: Many platforms request proof of a valid address in Mexico to comply with invoicing and tax regulations.
Why KPIs Matter in E-commerce
Tracking KPIs helps business owners:
- Detect underperforming products early.
- Optimize ad spend and marketing campaigns.
- Improve customer satisfaction and retention.
- Maintain healthy cash flow and avoid overstocking or stockouts.
Platforms like Amazon and Mercado Libre already provide dashboards with metrics, but combining them into a financial and operational dashboard ensures better decision-making, forecasting, and sustainable growth.
Start with a small set of KPIs (5–7) and expand as your business grows. Always align KPIs with your strategic goals: profitability, expansion, or market share.
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