The Ultimate eCommerce Metrics Playbook
Your Cheat Sheet to eCommerce Profitability 📈
As a DTC founder, you know growth isn’t just about great products and killer marketing but it’s about knowing your numbers.
Though, financial reports can feel overwhelming. And most resources are built for accountants, not operators like you.
🔑 What You’ll Get in This Playbook
We’ve cut through the noise to bring you the most essential metrics that actually impact your bottom line. With this guide, you’ll:
✅ Understand the numbers that drive profitability & cash flow
✅ Make data-backed decisions without needing a finance degree
✅ Stop guessing and start scaling with confidence
💡 What Makes This Different?
This isn’t just another generic finance guide.
It’s written by a seasoned CFO, who’s helped eCommerce brands scale past 8-figures and secure major funding rounds, who will guide you throughout every metric, so every insight you get is tailored to the realities of running a DTC brand.
👋 And this guy is me, Abir — nice to meet you!
What’s Blocking Your 8–9 Figure Growth? 🚀
You can get exclusive access to the same Growth Cash Dash we’ve built for 7 and 8-figure brands revealing untapped profit drivers, margin leaks, and the moves to scale smarter.
It's perfect for you if:
- You're growing revenue, but you don’t know if you're profitable.
- Your numbers are scattered and too busy to make sense of them.
- You're scared to take a decision that will tank your cashflow
How it works?
- You securely connect your Shopify or accounting software (or send us a few reports). Take <3 mins.
- You receive your custom dashboard + performance report in just 7 days
- You get a 1:1 CFO strategy call to know your roadmap to growth
📈 Revenue
Efficiently track how much money is coming in and what’s driving your top-line growth.
Gross vs Discount
The total amount of revenue if everything was purchased at full price vs the amount of discounts that were actually taken.
Where you get the data from: Shopify/Amazon data, or from invoices.
Why It Matters 🤔
Helps to differentiate between sales decreases because of volume or promotions. Also provides additional granularity around margin changes being due to discounts or changes in COGS.
How to Interpret 🕵️
- Depends on brand, channel, and strategy
- Higher discounts are expected in certain seasons
- DTC discounts of 10-30% are normal outside big promo seasons like BFCM
Sales by Channel
How much revenue is coming from each major channel.
Where you get the data from: each sales source.
Why It Matters 🤔
Different channels can have very different strategies so need to be looked at separately.
How to Interpret 🕵️
- Depends on brand
- DTC tends to be consistent other than big promo seasons
- Wholesale can cause volatility because of order timing and higher discounting
Sales by Product
Shopify report that breaks down sales by product or other platforms as needed.
Where you get the data from: Shopify and/or Amazon.
Why It Matters 🤔
Identifies core products and is helpful for forecasting. Can also help identify distraction products.
How to Interpret 🕵️
- Depends a lot on strategy
- Some products better for acquisition some for retention
- Helpful on a trend basis and can help identify cannibalization
New vs Returning Customer Revenue
How much revenue came from brand new customers vs those who have purchased in the past.
Where you get the data from: Shopify and TripleWhale provides revenue split by each.
Why It Matters 🤔
Mechanisms for generating each type of revenue differ so monitoring separately helps understand effectiveness of those efforts.
Plus they each give an idea of short-term vs long-term trends.
How to Interpret 🕵️
- Depends on brand and their offering
- ncRevenue should scale with ad spend - need enough to replace churn from old customers
- rcRevenue increases with acquisition but decreases with time (ideally growing over time)
Average Order Value (New vs Old)
The amount of Net Revenue in a given period divided by the total orders in that period. Can be calculated for new customers vs old customers.
Where you get the data from: Shopify or TripleWhale.
Why It Matters 🤔
AOV measures how much each customer spends per order. Increasing AOV can lead to very cost-efficient revenue gains - usually from upsells. Can vary for new vs returning customers, especially if different acquisition offers are being tested.
How to Interpret 🕵️
- Depends on brand and nature of product and acquisition offers
- Returning customer is usually pretty consistent
- New customer can vary based on offers and products/bundles advertised
Top Customers
Where you get the data from: accounting software or CRM (e.g. QBO).
Why It Matters 🤔
Helps you identify which customers are the most valuable.
How to Interpret 🕵️
- Keep in mind context of different pricing/margins with various customers
- Keep in mind impact on inventory forecasts
- Keep in mind payment terms and impact on cashflow
📢 Marketing
Understand how to assess the effectiveness of your paid and organic efforts to maximize ROI.
Media Efficiency Ratio (MER) (aka Blended ROAS)
Total Net Revenue of DTC channel (like Shopify) divided by total paid ad spend.
Where you get the data from: accounting software (e.g. QBO) or Shopify or TripleWhale.
Why It Matters 🤔
Ads are one of the most important expenses for a DTC brand. Too little or too much can kill a brand. So monitoring this number closely is crucial. One of the most impactful numbers to contribution margin.
How to Interpret 🕵️
- Will often be between 3-10x
- A certain amount is usually needed to keep revenue stable
- Too high can have an opportunity cost
- Should be relatively stable MoM
New Customer ROAS (ncROAS)
Total net revenue from new customers on DTC channel (like Shopify) divided by total ad spend.
Where you get the data from: Shopify or TripleWhale.
Why It Matters 🤔
Most paid ad spend is intended to acquire new customers. Because most existing customers are marketed to via retention strategies (like email). So this isolates the impact to newly acquired revenue.
How to Interpret 🕵️
- Will often be between .5-2.5x
- Ideal is being at least first-order profitable (after expenses)
- Can go negative if brand has really good retention
How do I decide when to scale?
Scaling before you're financially ready is like pressing the gas while the engine's on fire.
Here are a few financial signals to check before you scale:
Positive contribution margin on new customers (even after ad spend)
If you're acquiring new customers with a positive CM, that often means you can scale spend and still increase net profit — as long as ROAS holds. Even if ROAS dips slightly, you might still come out ahead due to the extra volume. You can use the Contribution Margin Calculator to identify the optimal spend-to-ROAS ratio for your brand.
Strong returning customer contribution margin
If you can cover fixed costs with returning CM then you're usually in a much lower risk place. If your ad account shuts down suddenly, you're returning customers can keep you afloat as that revenue naturally tends to be less volatile.
Stable new acquisition channels
if you have low returning customer CM then you need new customer CM to cover fixed costs. Make sure you're not reliant on a single volatile channel before you start increasing your fixed expenses.
Maintain a cash buffer of at least 60–90 days of OpEx
Even with strong contribution margin, scaling can create a temporary squeeze, and you need to be sure you can cover fixed expenses if margins dip.
Inventory & fulfillment capacity ready
There's no point in scaling if you're just going to go out of stock. Make sure you have enough inventory and/or the cash to buy more. Forecasting your cashflow can help make sure you don't out-sell your ability to fulfill.
If those boxes are checked, start testing scale in tiers:
➡️ Increase ad spend 10–15% weekly and monitor:
- MER
- ncCM per order
- Inventory run rate
- Fulfillment strain
Growth is a privilege you earn with clarity, not something you gamble on.
New Customer Acquisition Cost (nCPA)
Total ad spend divided by total new customers on DTC channel (like Shopify).
Where you get the data from: Shopify or TripleWhale.
Why It Matters 🤔
Most paid ad spend is intended to acquire new customers. Because most existing customers are marketed to via retention strategies (like email). So this isolates the impact to newly acquired customers. Especially useful for high LTV brands where 1st purchase is less relevant.
How to Interpret 🕵️
- Can vary depending on customer LTVs
- Ideal is being at least first-order profitable (after expenses)
- Different perspective to ncROAS if AOV of first order is very different than later orders
Advertising Expense
Where you get the data from: easy to pull from accounting software or ad platforms (e.g. QBO or Meta).
Why It Matters 🤔
Helpful to monitor impact of ad expenses over time in improving new customer revenue.
How to Interpret 🕵️
- ncRevenue should mostly correlate with changes in advertising expense
- Certain platforms will drive more immediate changes in ncRevenue than others
Agency Expense Ratio
Agency and Marketing Vendor fees / Ad Spend
Where you get the data from: data from accounting software (e.g. QBO) but easier to calculate in spreadsheet.
Why It Matters 🤔
Helps highlight how much is being invested into the teams that are managing ad spend relative to the ad spend being deployed.
How to Interpret 🕵️
- Very much depends on marketing strategy but in the area of 10% is reasonable
- Might need to tweak based on different agency responsibilities
What’s Blocking Your 8–9 Figure Growth? 🚀
You can get exclusive access to the same Growth Cash Dash we’ve built for 7 and 8-figure brands revealing untapped profit drivers, margin leaks, and the moves to scale smarter.
It's perfect for you if:
- You're growing revenue, but you don’t know if you're profitable.
- Your numbers are scattered and too busy to make sense of them.
- You're scared to take a decision that will tank your cashflow
How it works?
- You securely connect your Shopify or accounting software (or send us a few reports). Take <3 mins.
- You receive your custom dashboard + performance report in just 7 days
- You get a 1:1 CFO strategy call to know your roadmap to growth
⚙️ Operations
Learn how to keep an eye on fulfillment, logistics, and efficiency metrics to scale sustainably.
Top Expenses
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Helps you keep an eye on expenses that are usually not top of mind. Monitor trends to ensure they are consistent with expectations.
How to Interpret 🕵️
- Highest variability will often be with advertising expenses
- Most expenses should be relatively consistent MoM
- Any changes or trends should be looked at in the context of strategy/expectations
How do I make sure expenses aren't balooning?
Most brands don’t go broke from one giant mistake — they bleed out slowly through unchecked overhead.
But avoiding the drain is just about building the right habits for better expense hygiene. Here’s how to keep your expenses in check:
Track by vendor & category monthly
Top vendors changing over time? Ask why.
Use fixed vs variable mapping
Know which costs should move with revenue (variable) and which should stay flat (fixed).
Watch your “cost per $1 of revenue”
Divide total OpEx by net revenue — aim to keep that ratio stable or shrinking.
Pro tip: you can break OpEx into categories to monitor separately, like storage & fulfillment, or agencies & contractors.
Set quarterly “expense audits”
Do an in depth review where you challenge the ROI of every large fixed cost (subscriptions, consultants, tools).
Rein in your team's expenses
If the team is getting very large and there are a lot of credit cards floating around, you can do an annual cancellation of the cards to force people to re-examine their spend.
Assign owners to budgets
At a larger scale it's harder for you to know what every expense is, so divide up expenses into budget owners, and have them justify the spend.
A lot of expense management isn't simply knowing the expense is happening but it's a philosophy around evaluation.
You shouldn't be paranoid about every $ every day, because you have to spend money to make money.
But when you do your quarterly reviews, be ruthless. Ask what would happen if that expense went away.
Each $ should have to earn it's right to exist as an expense, not inherit it from the fact that it was already there.
Profit isn’t just about selling more but about wasting less.
Top Vendors
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Helps you keep an eye on vendors expenses increasing unexpectedly over time. Especially with those that are less top of mind.
How to Interpret 🕵️
- Highest variability will often be with variable expense vendors
- Most other vendors should be relatively consistent MoM
Inventory Balances by Product
Where you get the data from: inventory tracking system or spreadsheet.
Why It Matters 🤔
Cash is most often tied up in inventory so tracking inventory balances can help identify where it might be tied up. This also helps with forecasting future purchases.
How to Interpret 🕵️
- Balances that are consistently large might imply too much inventory carried
- If sales are concentrated in fewer products but inventory distributed in many it can imply dead stock
Fixed vs Variable Expenses
Categorize expenses based on how correlated their changes are with increases in sales or production volume.
Where you get the data from: accounting software (e.g. QBO) or manual mapping.
Why It Matters 🤔
Fixed expenses give you the minimum amount of activity necessary for the business to remain profitable. Variable expenses should move consistently with revenue and will go up and down with revenue fluctuations.
How to Interpret 🕵️
- Fixed expenses should be stable MoM
- If profitability is an issue over long periods fixed expenses should be examined
- Trimming variable expenses can allow for more ad spend per $ of revenue thereby allowing for more growth
How do I increase profits?
More revenue doesn’t always mean more profit.
If you want to increase your profits, you need to pull the right levers the right way.
Here are 5 simple but powerful profit levers:
Improve CM by Increasing AOV
Use bundles, upsells, or volume-based offers. It's usually easier to increase CM by increasing how much a customer spends rather than trying to reduce CAC.
Improve gross margin on top SKUs
Negotiate COGS, optimize packaging/shipping. Strategic price increases can also be very impactful.
Optimize marketing
Monitor ncROAS, how much is spent on agencies, and make sure you're investing enough in creative relative to ad spend.
Cut underperforming expenses
Focus on vendor creep, unnecessary tools, or bloated agencies.
Shift channel mix
Push toward higher-margin channels (e.g. DTC > Amazon > Wholesale). But consider that even lower margin channels can mean more profit as long as the cost to run the channel isn't too high.
The fastest path to profit is usually fewer, better-performing SKUs and tighter control over costs.
AR Aging
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Helps you identify where cash is tied up.
How to Interpret 🕵️
- Wherever there are large overdue receivables there might be an issue that needs to be investigated
- Very impactful on cashflow
AP Balances
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Helps you understand future cash outflows.
How to Interpret 🕵️
- Large balances are going to have large cashflow impacts so important to be aware of them
💰 Profitability
Understand margins and costs to ensure your business stays profitable.
Gross Profit & Gross Margin by Channel
Allocate revenue and COGS by channel.
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Helps monitor the profitability of the sales on various channels. Useful especially because channels can potentially cannibalize each other. Helpful for pricing strategy.
How to Interpret 🕵️
- DTC > Amazon > Wholesale GM
- WS should eventually give higher GP to compensate
- Variability should be limited
Gross Profit & Gross Margin by Product
Platform reports for sales by product and usually add cost per units if no inventory system is used.
Why It Matters 🤔
Identifies core products and is helpful for determining which ones to preferentially push.
How to Interpret 🕵️
- Depends a lot on strategy
- Identifies the priority products
- Can help identify unfavorable cannibalization
What do I do if I spot unprofitable products?
Unprofitable SKUs are common — especially in brands that scale fast. It's normal to get clutter as you grow and jump on opportunities for new SKUs.
These can often be legacy products, bundles that underperform, or ad bait that never worked out. The key is to avoid emotional attachment and focus on the numbers.
If a product has poor gross margin or contributes little to net profit.
First, see if it can be solved for by doing the following ⤵️
Evaluate cannibalization
A low-margin SKU might be hurting a higher-margin hero product, but sometimes it might just be incremental gross profit; like a shoe store offering extra color shoe laces. In that case, even at a lower margin it can be fine as long as it's not taking up too much inventory.
Evaluate carrying cost
If the SKU isn’t cannibalizing another, you might assume that bringing in a few thousand dollars a month is better than nothing. But if it ties up significant cash in inventory due to high MOQs, that revenue might not be worth it. See if you can reduce MOQs or switch to a dropshipping model.
Re-evaluate COGS
Can packaging, fulfillment, or input costs be optimized? Can you use a different supplier?
Reposition the SKU
Use it as a lead-gen or bundle product if it performs well on first-purchase conversion.
Adjust pricing
While price changes can be disruptive if your other option is to discontinue the SKU, you may as well test if a higher price can improve margins. If sales velocity drops too hard then it might not be worth keeping
➡️ Check this video to learn 10 pricing tactings to beat the competition
➡️ Check this video to learn 10 pricing tactings to beat the competition
Finally, if it's not salvageable, how do you transition away from the SKU?
Phase it out strategically.
Wind down ad spend, minimize reorders, and prioritize selling through current stock. Sometimes you can liquidate it through a retention push as a "goodbye offer".
Your job isn’t to save every SKU but it’s to double down on the ones that keep your brand alive.
Contribution Profit/Margin
Net revenue less variable expenses.
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Gives you an idea of how profitable the core scaling activities are and how profitability will track as the brand scales. Especially important for DTC brands because it's generally quite volatile and they usually have non-trivial fixed expenses that need to be covered.
How to Interpret 🕵️
- Short-term variances mostly due to ads
- Long-term variances due to COGS/shipping
- Ideally should be enough to cover fixed expenses
- % gives an idea of how much is added to the bottom line when scaling
ncCM per Order
Apply %'s of each variable expense to New Customer Revenue to determine new customer variable expenses, and then add all of ad spend. That provides ncCM which is then divided by total orders.
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Gives you an idea of how profitable acquisition activities are. And how much you can afford to spend on scaling.
How to Interpret 🕵️
- Ideally you want this number to be positive
- Can be negative if brand is an LTV play
- If too high might not be scaling aggressively enough
Contribution Margin per Channel
Allocate revenue and variable expenses based on each channel as best you can.
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Helps identify which channels are driving overall contribution margin and which ones might be creating a drag.
How to Interpret 🕵️
- Where you expect to see contribution margin depends heavily on strategy
- You might need more contribution than usual from a core channel to subsidize a new channel
- Some channels should see lower variability
Cash
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Cash is what keeps a business alive. The difference between Net Profit and Cashflow can be confusing for many.
How to Interpret 🕵️
- Changes in the various balances should be consistent with expectations
- If a particular category is having a negative cash impact might need change in strategy
How do I stop worrying about cash?
If you’re losing sleep over cash, it’s not because you're bad at business — it’s because cash timing is more important than profit, but harder to see.
Here’s how to feel more in control:
Monitor your cashflow reconciliation
You need to have a grasp on what's causing cash to be out of sync with sales and profit. For many founders, a lot of the anxiety just comes from not understanding what's going on.
Map AR/AP cycles
If your quick ratio is low then that should be a red flag that requires solving. Identify the cash troughs created by timing around when cash comes in (especially if you sell wholesale) vs when cash goes out to manufacturers.
Hold a buffer
Try to maintain 2–3 months of fixed costs in cash. It can be tempting to spend cash on growth but you'll avoid a lot of stress and risk, if you set some cash aside and out of sight.
Watch for big drains
Inventory, ad invoices, and tax liabilities are the biggest stealth killers because they don't appear as obviously in your accrual profits.
Run a simple 13-week cashflow forecast weekly
Know what’s coming in, going out, and where gaps might show up.
You can use the Easy Cashflow Template included to get a clear view.
You can use the Easy Cashflow Template included to get a clear view.
Profit is strategy. Cash is survival. Know both — and sleep better.
📊 Financial Ratios
Measure your efficiency and profitability to ensure you can cover future liabilities.
Days Inventory on Hand
(Average Inventory / Cost of Goods Sold) * # of days in period
Where you get the data from: accounting software (e.g. QBO) and inventory tracking system.
Why It Matters 🤔
Helps identify if there is too much cash being tied up in inventory and if purchasing is inefficient.
How to Interpret 🕵️
- Correct # is based on business's future sales and supply chain
- Ideally as low as can be without going out of stock
Days Sales Outstanding
(Average Accounts Receivable / Revenue) * # of days in period
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Gives an idea of how long cash is tied up in receivables.
How to Interpret 🕵️
- Correct # is a function of volume of wholesale sales
- Ideally you want to keep this below 30 days
Days Payables Outstanding
(Average Accounts Payable / COGS) * # of days in period
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Gives an idea of whether you're being efficient with cash and if you're taking advantage of terms with suppliers.
How to Interpret 🕵️
- Variances can be tied to changes in sales volume and thus COGS
- Ideally you want to keep this above 30 days
Cash Conversion Cycle
Days Inventory Outstanding + Days Sales Outstanding - Days Payable Outstanding
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Gives an idea of overall cash efficiency. Essentially how long does it take you to convert inventory purchases into cash from sales.
How to Interpret 🕵️
- The lower the better, negative is even better
- Will vary a lot between DTC an WS
- Need to dig into components to see where improvements can be made and then monitor over time
Current Ratio + Quick Ratio
Current Ratio = Current Assets / Current Liabilities
Quick Ratio = (Current Assets - Inventory) / Current Liabilities
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
A measure of liquidity. Helps provide a sense of how comfortably you can cover all your liabilities if you need to in a short period of time.
How to Interpret 🕵️
- Current ratio is preferred to be at least 1.5
- Quick ratio is preferred to be at least 1
- "Current" is in next 12 months so isn't as indicative of cash crunches as a forecast
Working Capital Turnover Ratio
Net revenue / Average Working Capital
Working Capital = Current Assets - Current Liabilities
Where you get the data from: accounting software (e.g. QBO).
Why It Matters 🤔
Gives an idea of how efficiently available capital is being used to generate revenue.
How to Interpret 🕵️
- 10 and above is good to see
- If low need to drill down into where cash is being tied up or how it's spent
- High is good but just need to make sure it's sustainable
Yay 🎉
You've reached the end of the playbook — how are you feeling? 🤩
We hope you enjoyed it. This playbook is meant to become your best friend and be by your side whenever you are in need.
Curious about the Dashboard?
The dashboard you saw in the videos is the same one that our clients have; in fact, this is a custom dashboard to check all key metrics we've covered in the playbook.
If you'd like to have a custom dashboard designed for your eCom business, get in touch!
UpCounting's eCom Reporting Dashboard 📊
…And if you haven't checked them out already 👀
We put together a few practical templates for an easy revenue forecast, cashflow and inventory tracking — completely FREE!
DTC accounting & bookkeeping is no easy feat, and if you'd like to get a more expert help from us, we'd be happy to help ➡️ here you can schedule a 15 min call with us
Oh and before you go…
We'd love to hear from you 👂
We put a lot of thought into it and we hope it has matched your expectations; if not, we'd want to make it better.
Do you have 2 min?