Glossary
Ecommerce Analytics Glossary
Plain-English definitions of the metrics behind ecommerce growth — with the formulas and links to go deeper.
A
- AOVAverage Order Value
- Average order value — the average revenue generated per order.
AOV = Total revenue ÷ Number of orders- Raising AOV improves unit economics without more ad spend and shortens CAC payback.
- Learn more: AOV & Repeat Purchase Rate
- Attribution
- The practice of assigning credit for a sale to the marketing touchpoints that influenced it.
- No attribution model is perfectly true; each (last-click, first-click, linear, data-driven) carries a different bias.
- Learn more: Ecommerce Attribution
B
- Blended ROAS
- Total store revenue divided by total ad spend across all channels — a measure that can't be double-counted.
Blended ROAS = Total revenue ÷ Total ad spend (all channels)- Unlike platform-reported ROAS, blended ROAS ignores attribution, so it tracks much closer to real profitability.
- Learn more: Blended vs Platform ROAS
- Breakeven ROAS
- The ROAS at which the gross profit from a sale exactly equals the ad cost that produced it.
Breakeven ROAS = 1 ÷ Gross margin- Below your breakeven ROAS, each sale loses money before any other costs. At a 40% gross margin, breakeven ROAS is 2.5x.
- Learn more: What Is a Good ROAS?
C
- CACCustomer Acquisition Cost
- Customer acquisition cost — the average cost to acquire one new customer.
CAC = Total acquisition spend ÷ New customers acquired- Track new-customer CAC for acquisition decisions; a blended CAC that includes returning customers looks artificially low.
- Learn more: LTV, CAC & Payback
- CAC Payback Period
- How long it takes for a customer's cumulative gross profit to recover the cost of acquiring them.
- Payback period governs cash flow: even with a strong LTV:CAC ratio, a long payback ties up cash and slows how fast you can reinvest.
- Learn more: LTV, CAC & Payback
- Cart Abandonment
- When a shopper adds items to their cart but leaves without completing a purchase.
- Cart abandonment includes casual browsers, so it's broader and less actionable than checkout abandonment.
- Learn more: Fixing Checkout Abandonment
- Checkout Abandonment
- When a shopper starts checkout but leaves before completing payment.
Rate = 1 − (Completed orders ÷ Checkouts started)- It's the costliest funnel leak because intent was highest. Surprise shipping costs and forced sign-up are leading causes.
- Learn more: Fixing Checkout Abandonment
- Churn Rate
- The rate at which customers stop buying or subscribing over a period.
- Churn is the mirror of retention. Lowering it raises lifetime value and is usually cheaper than acquiring replacements.
- Learn more: AOV & Repeat Purchase Rate
- COGSCost of Goods Sold
- Cost of goods sold — the direct cost of the products you sell.
- COGS typically includes manufacturing or wholesale cost, inbound freight, and per-unit packaging. It's the cost subtracted to reach gross profit.
- Learn more: Revenue vs Profit
- Contribution Margin
- The profit an order contributes after all variable costs — COGS, shipping, fees, and ad spend.
Contribution margin = Revenue − COGS − shipping − fees − ad cost- Contribution margin is the best day-to-day signal of whether paid growth is actually profitable.
- Learn more: Gross vs Contribution Margin
- Conversion RateCVR
- The percentage of sessions that result in a completed order.
Conversion rate = (Orders ÷ Sessions) × 100- Because conversion rate sits underneath ROAS, improving it makes every traffic channel more efficient at once.
- Learn more: Shopify Conversion Rate
- CPACost Per Acquisition · Cost Per Action
- Cost per acquisition — the average ad cost to generate one conversion.
CPA = Ad spend ÷ Conversions- CPA is the inverse perspective of ROAS at the conversion level. Judge it against your AOV and margin, not in isolation.
- Learn more: What Is a Good ROAS?
- CPMCost Per Mille · Cost Per 1,000 Impressions
- Cost per thousand impressions — what you pay to show an ad 1,000 times.
CPM = (Ad spend ÷ Impressions) × 1,000- Rising CPMs increase the cost of reaching your audience and can erode ROAS even when targeting hasn't changed.
- Creative Fatigue
- The decline in ad performance as an audience sees the same creative too often.
- Fatigue typically shows up as rising frequency with falling CTR and climbing CPA — a cue to refresh creative rather than add budget.
- Learn more: Blended vs Platform ROAS
- CTRClick-Through Rate
- Click-through rate — the percentage of ad impressions that result in a click.
CTR = (Clicks ÷ Impressions) × 100- A falling CTR on a previously strong ad is an early signal of creative fatigue.
- Learn more: Blended vs Platform ROAS
G
- Gross Margin
- The percentage of revenue left after the cost of goods sold.
Gross margin % = (Revenue − COGS) ÷ Revenue × 100- Gross margin sets your breakeven ROAS and is the right metric for pricing and product decisions.
- Learn more: Gross vs Contribution Margin
- Gross Profit
- Revenue left after subtracting the cost of goods sold, in absolute dollars.
Gross profit = Revenue − COGS- Gross profit is the dollar figure; gross margin is the same idea expressed as a percentage of revenue.
- Learn more: Revenue vs Profit
L
- LTVCustomer Lifetime Value · CLV
- Customer lifetime value — the total gross profit a customer generates over their relationship with you.
LTV ≈ AOV × purchases/year × gross margin × lifespan (years)- Measure LTV in gross profit, not revenue, so it reflects the value actually available to cover acquisition cost.
- Learn more: LTV, CAC & Payback
M
- MERMarketing Efficiency Ratio
- Marketing efficiency ratio — total revenue divided by total marketing spend, viewed at the whole-business level.
MER = Total revenue ÷ Total marketing spend- MER is essentially blended ROAS framed for the entire business. Many teams use the two terms interchangeably.
- Learn more: Blended vs Platform ROAS
N
- Net Profit
- What the business actually keeps after all costs — product, marketing, overhead, taxes, and interest.
- Net profit is the true bottom line. Revenue and even gross profit can rise while net profit falls.
- Learn more: Revenue vs Profit
R
- Repeat Purchase Rate
- The share of customers who make more than one purchase in a given period.
Repeat rate = Customers with 2+ orders ÷ Total customers- A higher repeat rate multiplies lifetime value and produces revenue far cheaper than new acquisition.
- Learn more: AOV & Repeat Purchase Rate
- ROASReturn on Ad Spend
- Return on ad spend — the revenue generated for each dollar spent on advertising.
ROAS = Revenue attributed to ads ÷ Ad spend- ROAS measures revenue, not profit. A high ROAS can still be unprofitable on a low-margin product, which is why it must be read against your breakeven ROAS.
- Learn more: What Is a Good ROAS?
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