Metrics library
Plain-English definitions and the formula behind each one. 27 metrics, no jargon.
Net Profit is the money left over after you subtract all your costs from your sales.
Net Profit = Total Revenue - Total Expenses This is the percent of your sales money that's left as profit after all costs are paid.
Net Profit Margin = (Net Profit / Total Revenue) x 100% The percent for business-to-business sales after variable costs.
B2B Contribution Margin = (B2B Revenue - B2B Variable Expenses) / B2B Revenue x 100% Like contribution profit, but for sales to other businesses.
B2B Contribution Profit = B2B Revenue - B2B Variable Expenses The percent for direct-to-customer sales, after their variable costs.
D2C Contribution Margin = (D2C Revenue - D2C Variable Expenses) / D2C Revenue x 100% Like total contribution profit, but just for sales straight to people.
D2C Contribution Profit = D2C Revenue - D2C Variable Expenses This is the percent of sales left after variable costs, showing how much contributes to fixed costs and profit.
Total Contribution Margin = (Total Revenue - Total Variable Expenses) / Total Revenue x 100% This is the money left after paying the costs that change when you sell more, like making or shipping products.
Total Contribution Profit = Total Revenue - Total Variable Expenses These are costs that go up when you sell more, like boxes for shipping.
Variable costs, but not counting ad money.
This is the percent of sales left after paying variable costs.
Variable Margin = Variable Expenses / Total Revenue x 100% The percent of variable costs except ads.
Variable Margin (Without Ad Spend) = Variable Expenses Without Ad Spend / Total Revenue x 100% AOV is the average amount of money people spend when they buy something from you.
AOV = Total Revenue / Number of Orders Money from selling to other companies, which then resell your products to the end user or consumer.
Money from selling directly to people, typically online via eCommerce.
Orders are the total number of times people buy things from your store.
This is how many times, on average, a customer buys from you each month.
Monthly Purchase Frequency = Total Orders in a Month / Number of Customers This is all the money your store makes from selling things.
Ad Spend is the total amount of money you pay to show ads to people.
This is the part of your sales money that goes to paying for ads, shown as a percent.
Advertising Cost of Sale = (Ad Spend / Total Revenue) x 100% CVR is the percent of people who visit your website and end up buying something.
CVR = (Number of Buys / Number of Visitors) x 100% CAC is how much money it costs you to get one new customer.
CAC = Total Ad Spend / Number of New Customers D2C ROAS tells you how much money you make from selling straight to people (not stores) for every dollar spent on ads for those sales.
D2C ROAS = D2C Revenue / D2C Ad Spend MER shows how much money you get back for every dollar you spend on ads and marketing. It's like checking if your ads are a good deal.
MER = Total Revenue / Total Ad Spend PES is a special score that ranks overall efficiency across the business.
This is the total money one customer will spend with you over time, but looked at each month.
Monthly CLV = Average Order Value x Monthly Purchase Frequency x Average Months They Stay These are costs that your business pays no matter how much you sell, like rent for your office, payroll, health insurance, and legal fees. Note that "fixed" doesn't mean these numbers don't change, just that these expenses aren't sales related - they don't increase if your revenue increases, or decrease as revenue decreases.