Revenue is the amount of money a company generates from selling products or services within the scope of their primary business operations. For your ecommerce site, it is the total amount of money you make from selling your products. Increased revenue is the ultimate goal of ecommerce and retail companies in general.
How to Calculate Revenue
The simplest formula for Revenue is average price of goods sold x the amount of goods sold. Peel’s automated tools calculate accurate revenue for you, to give you both an overall look at how your business is performing and more granular views of your cohort revenue data. These can be helpful tools for identifying areas where you need to improve based on which products and which customer types are bringing in the most revenue and adjusting your marketing emphasis accordingly.
What are the Most Important Revenue Metrics?
There are plenty of important revenue metrics for ecommerce brands to track. Chief among them are Customer Lifetime Value (LTV) - the measure of a the total value a customer brings to a business over the entire relationship with that business; Average Order Value (AOV) - the average dollar amount of your customers’ orders; Gross Sales (new & returning customers) - which is the total sales a company makes unadjusted for any costs; Revenue Growth Rate - the rate at which a company’s revenue grows over time.