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As a business owner, you are always looking for ways to improve your bottom line. One way to do this is by tracking your sales data. Business statistics are there to help you to make the most of your business. If used correctly, they will be able to pinpoint where you are going wrong, or what you are doing right. Knowing this lets you spend your precious time working on what works rather than what doesn’t.
There are so many different types of business statistics that you could be collecting. You can track your sales data, and then compare it to your marketing data. This will be able to tell you if your advertising is working, or what you need to do to improve your sales. The same goes for your website traffic. Are you getting more visitors than last year? Or are your leads dropping? This kind of information is invaluable, and will help you to make the changes that need to be made.
If you are in online business, then generally the marketplace you are using, or Google Analytics, will provide you with all of the data you need to make great strides in growing your business. The main data you need to track is, the number of visitors, where they come from, number of orders, your revenue and your expenses. Once you have this data you are ready to learn how to manipulate it in to 5 key sales stats to boost your business.
If you have had the initial excitement of making a sale, or maybe you are still waiting. Here is a list of statistics that you need to start looking at TODAY so that you can make your business truly bloom.
1. Traffic diversification
Traffic is the life blood of your business. You need to be tracking it and taking steps to increase it. After all
Traffic diversification refers to the different types of traffic that you are getting. Are they all coming from one source? Or are they coming from a variety of sources? Traffic diversification is important because you want people to be visiting your shop from as many different sources as possible.
Having multiple sources means you are building a sustainable and diverse business.
If you are unsure how to find your traffic sources then this can be found in Google Analytics under acquisition, or on your Etsy Sats page if you have an Etsy shop.
Once you know the numbers of visits from each traffic source you can then calculate the proportion of each traffic source.
Traffic Source Proportion = Source Traffic/Total Traffic.
Calculate this for each source and you will soon see whether you are too reliant on once source.
Why your traffic sources matter
The diversification of your traffic is a very important metric. You want to ensure that you have lots of different sources for your traffic so that it doesn’t become reliant on one source. If you are marketing your business then your traffic sources can also indicate whether that marketing effort is working or not.
You should keep an eye on your traffic sources to make sure that your efforts are paying off. You want to see a good mix of organic search traffic and traffic from your marketing efforts, whether that is paid or via social media.
Organic search shows your SEO effort is working, and all other sources are generally down to your marketing. Having multiple sources that is generating a decent amount of traffic is perfect as it means that your business doesn’t become reliant on one source and that you are building a robust and sustainable business.
2. Average order value:
Suppose you have products at different price points. In that case, another useful statistic is to know your average revenue for each sale. This will show you how much each customer is spending on average. If this number is increasing, it means that your customers are spending more money with you. However, if this number decreases, you must improve your average order value.
This is calculated as:
Revenue / Number of orders.
Why the average order value matters
Having fewer sales that generate the same revenue is a good thing, as it is easier to find one customer than three to make the same money.
One way to increase the average order value is by looking at the average product price. You can also consider adding upsell products, which are items that a customer will often buy along with their primary purchase.
These statistics can form a growth plan for you to use to help grow your business.
3. Conversion Rate
This measures how many of your visitors are actually becoming paying customers. A high conversion rate means that your marketing efforts are working well and attracting the right leads. If you only monitor one statistic, then make it your conversion rate.
The conversion rate is calculated as follows:
Conversion rate = (number of orders/number of visits ) x100
A good online sales conversion rate is around 3%.
Etsy calculates the conversion rate for you on your Etsy Shop Statistics page.
Why your conversion rate matters
Knowing whether your shop or specific listings can make sales is essential for you to know as a seller.
If your conversion rate is higher than your target, you know your product will sell once someone sees it. This means you can double down on your marketing as you are likely to easily generate more sales.
A low conversion rate means people are finding you but don’t like what you have to offer enough to make a purchase. Sending more traffic will mean you have to work harder to get sales.
Suppose this is the situation you find yourself in. In that case, it is better to spend your time working on your website, shop or listing to make sure it is finely tuned to convert a visitor into a customer rather than working on your marketing.
4. Number of visits to make a sale
This goes hand in hand with many other statistics we have looked at so far. The number of visits to make sales is similar to the conversion rate. It is less well used, but you may find it easier to relate to than the conversion rate.
It is actually calculated as the reverse of the conversion rate:
Number of visits to make a sale = (number of visits)/ (the number of orders).
Using the figures from the image above, it tells me that 1797/61 = 29.5. This means I need about 30 Visits to get 1 sale.
This means if I want to ensure I get 50 sales a month, I need to get 1500 Visits (50×30) to achieve it.
Why your number of visits to make a sale matters
This metric is important to track because it tells you how much traffic you need to ensure you reach your target revenue. You can then use this figure to set goals for your marketing campaigns and decide on the amount of time spent on each campaign. This way, you can ensure your marketing time is worthwhile.
5. Profit Margin
The final but probably most important metric to measure is your profit margin. Profit Margin is the difference between your sales and your costs. So, if you make a sale of $100 and the cost of making that sale was $50, then your profit margin is 50%. This is the percentage of each sale that you make as profit. This metric helps you to determine whether your products are selling at a high enough price to ensure a positive margin. If they are not, then you should consider increasing the price or looking for cheaper alternatives.
Profit margin is calculated as:
((Revenue-Expenses)/Revenue) x 100
A good profit margin is 10%-20%. Although this varies depending on what type of business you are in.
Why your profit margin matters
The profit margin is an important metric to track because it tells you how profitable your business is. The higher the profit margin the more money you are making. And let’s face it you are in business to make money, so tracking this metric is the MOST important metric to measure.
Tracking these five sales stats can help boost your business growth and performance. You can determine how much traffic each campaign generates from the data you collect and then use this to determine what you should spend your time on. This way, you can ensure that all your efforts are worthwhile and that no time is wasted.
We have you covered if you want somewhere to track all these statistics in one place. Our Etsy Statistics tracker will monitor, chart and flag if you need to work on specific areas.