Profit Analytics Blog
Read expert articles with insights about e-commerce profitability from analyzing thousands of e-commerce businesses' data.
Net, Gross, & Operating Profit Margins: What Is High?
Two popular metrics commonly used to gauge the success of a business are profit margin and net profit. And, while net profit is great at reflecting how much profit is generated from revenue, for some applications, it’s arguable that a business's profit margin is a more valuable metric. This is because profit margin allows you to gauge how efficiently your business is running overall. To help you better understand these metrics and break down everything involving income, revenue, and profit, take a moment to read through this post. Difference Between Net, Gross, & Operating Profit Margins Net profit margin, gross profit margin, and operating profit margin are three metrics commonly used to analyze and measure the income of a business. To help you better understand the differences between them, consider these definitions and demonstrations of how each is calculated: Net Profit Margin Net profit margin is a measure of profitability. It's calculated by determining a business’s net profit as a percentage of revenue. The net profit margin formula looks like this: [(revenue-cost)/revenue] x 100 What’s considered a “good profit margin” will vary depending on industry and business size. A rule of thumb is that a 10% profit margin is average, a 5% profit margin is “low”, and a 20% profit margin is "good" or "high". Anything over 20% is exceptionally good. The average net profit margin can vary drastically by industry. For example: IndustryAverageHighAdvertising3.10%5%+Brokerage and Investment20.34%30%+ Another way to look at net profit margin is by using a net profit margin ratio. The net profit margin ratio is just another way to measure a company's profitability. It's calculated by dividing net income by revenue. This ratio tells you how much profit a company makes on each dollar of sales. Simply put, a high net profit margin ratio means that the company is making a lot of money on its sales. While a low net profit margin ratio means that the company is not making as much money on its sales. Gross Profit Margin The gross profit margin differs from the gross profit and is expressed as a percentage. It's calculated by determining the difference between revenue and the cost of goods sold (COGS), divided by the revenue. The gross profit margin formula looks like this: [(revenue-COGS)/revenue] x 100 Gross profit margin is the percentage of revenue that remains after paying COGS. This calculation is useful because it measures the efficiency of the business's operations and provides a benchmark for measuring other business expenses. For example, if you find your gross profit margin is low, you can look into reducing COGS, including reducing shipping costs or cutting out unnecessary expenses like excess staff or unneeded operation costs. Once again, gross profit margin can vary by industry. The overall average sits at 36.22% for all industries. However, each sector has its own specific numbers: IndustryAverageHighAdvertising23.99%30%+Apparel49.77%55%+Online Retail42.53%50%+Software58.58%65%+Transportation19.91%25%+ » Need help managing your expenses? Keep track of your e-commerce business expenses and calculate COGS for your Shopify store Operating Profit Margin Operating profit margin (or return on sales) is the ratio of operating income to net sales. This is usually expressed as a percentage. The operating profit margin formula looks like this: (operating profit/net sales) x 100 The operating profit margin ratio is used to determine how well a company can cover its operating costs with revenues. In other words, how effective a company is at generating profits from its sales. This is a useful performance indicator when making comparisons to similar companies. Average operating profit margins can also vary according to industry and business size. Apple, one of the world’s biggest software companies, maintained an operating margin of around 24-26% between 2018 to 2021. Other examples include: IndustryAverageHighAdvertising12.2%15%+Online Retail8.67%15%+ Good Profit Margins by Industry Each industry considers different percentages of profit margin to be either good or bad. If you're wanting to know what a good profit margin is for products in e-commerce, retail, and more, here’s an industry-specific look: Retail: 20-45%E-commerce: 15-20%Clothing: 4-13%Wholesale: 15-20%Hospitality: 10-15%Consulting: 80-100%Software: 70-85% Benefits of Knowing Your Profit Margins The ultimate goal for a business is profitability. If your sales are up, but your margins are down, you may need to take a deeper look at how you're running your business. A business with a good profit margin is able to remain afloat during tough times and capitalize on opportunities, such as seasonal strategies for boosting sales. A high profit margin means that the company is making enough money on each sale to cover its costs and generate positive ROI for continued growth. A high profit margin also sends a positive signal to potential investors, lending credibility and stability to the business. Ultimately, a good profit margin is essential for maximizing company growth and achieving long-term success. Limitations of Profit Margin Calculations To calculate a profit margin, business owners need to calculate total revenue and total expenses. This can be complex. R&D costs are expensed in the year in which they occur, while depreciation expenses are spread out over the life of the asset. Profit margins also don’t always consider changes in sales volume. If a company doubles its sales volume but keeps costs constant, the profit margin doesn’t change. If a company reduces its sales but also lowers expenses and increases prices, its profit margin will increase. Calculating profit margins is not an exact science. The outputs, while helpful, should be considered an estimation. » Need help calculating your profit? Make sure to avoid these mistakes and invest in a profit calculator
Business metricsE-Commerce vs. Digital Marketing: What Is the Difference?Despite the fact that digital marketing is an essential component of e-commerce, the two are, by definition, distinct. Although they are so intertwined, it is difficult to determine where one ends and the other begins. But first, let’s get an overview of the most important factors that distinguish e-commerce from digital marketing. E-Commerce vs. Digital Marketing Overview E-Commerce A digital store for purchasing products or services.There are different types of e-commerce available.All the transactions take place online between the consumer and the supplier.Digital MarketingUtilizes technology to interact with and reach consumers.Used to market products and services to customers.Helps increase sales by directing more traffic to where it is needed. E-commerce refers to an online store where products and services can be purchased, whereas digital marketing is the method used to drive the necessary traffic to these stores in order to increase sales. Now that you have a general understanding of the two terms, let's examine the most crucial details you should know about each. Stay Ahead of Your Profits It is no longer necessary to manually calculate your profits from multiple sources. The BeProfit analysis dashboard is here to simplify your life. The BeProfit analysis dashboard simplifies and streamlines your ability to monitor your profit by analyzing and automating the process. How BeProfit Analysis Dashboard simplifies tracking profits: Performs analyses so you always know your precise profit.It is compatible with your desktop and mobile device.Keep track of multiple sources of income.Integrates your storefronts into a single management system. What Is E-Commerce? E-Commerce is an industry with a large and expanding online market that has altered how businesses and consumers conduct transactions. Consumers are no longer required to go to the mall or a physical store to purchase the desired products. Instead, they can simply purchase the items online from the comfort of their own homes. The convenience factor cannot be overstated, and it has helped to drive the e-commerce industry to new heights. What Are the Three Types of E-Commerce? There are many different types of e-commerce, but the three main types are: Business-to-Business (B2B) The exchange of one business’s products or services for another business’s products or services.Business-to-Consumer (B2C) The sale of a business’s products or services to a consumer.Consumer-to-Consumer (C2C) The exchange of one consumer’s products or services for another consumer’s products or services. Benefits of E-Commerce There are a number of distinct advantages of e-commerce for both the seller and the buyer. These include: BuyerAccessibility: The product is accessible 24 hours a day, seven days a week.Flexibility: Products are available for purchase from anywhere in the world.Choice: Have access to an extensive selection of products.Assurance: Able to conduct product research at their leisure.Quicker buying process: Save time and effort searching for what they need while shopping online.SellerLow cost: Establish an internet-based business that can be operated from any location.Little to no overheads: No need to pay for inventory, as it will be shipped as orders are received.No overstocks: Pay only for the products that are sold.Faster response to the market: Easily keep up with trends and modify products and services.Cost-efficient promotion: Social media allows free audience targeting. Cheaper advertising. What Is Digital Marketing? Digital marketing is the promotion and advertising of a brand with the objective of connecting a business with prospective customers. This is made possible through the use of the Internet, cutting-edge technology, and other digital communication methods. What Is a Digital Marketing Strategy? Digital marketing is a plan that analyzes how the budget, manpower, and time can be integrated to create the most effective marketing campaign for a business and is achieved through the following steps. Digital Marketing Strategy Steps Define a set of goals.Establish a budget to develop a schedule.Research the target audience.Develop a strategy for each channel.Implement and monitor its success.Modify if needed. Examples of Digital Marketing Content marketing, search engine optimization, social media marketing, email marketing, and mobile marketing, are all examples of digital marketing activities. Benefits of Digital Marketing There are numerous benefits to digital marketing. These consist of: Timeliness: It allows brands to reach their target audience with the right message at the right time.Specific targeting: Increased brand awareness and greater customer engagement through targeted advertising.Develop brand loyalty: By publishing relevant content to your audience more frequently, your brand will be able to expand more quickly.Wide-reach: It offers a wonderful opportunity to advertise your business and services to a potentially infinite audience.Improve customer loyalty: It enables you to share the latest trends and news with your audience via social media and email. The Bottom Line E-Commerce and digital marketing are related processes that can work together. E-commerce usually begins where digital marketing ends. In fact, it could be argued that without one another, they might not have achieved the same level of success as they do now. In order to allocate resources effectively and address issues as they arise, it is crucial to be aware of the distinction between the two.
BusinessCash Flow Forecasting: Pros & Cons You Should Be Aware OfCash flow forecasting allows your business to plan for future cash needs by anticipating future cash inflows and outflows within a specific timeframe. Although this can enable you to be prepared and adjust to changing circumstances, cash flow forecasting still has drawbacks. Below, we dive into the pros and potential pitfalls of cash flow forecasting to help you optimize your use of the process. 6 Key Pros of Cash Flow Forecasting 1. Equips Businesses With Predictability & Foresight As you create cash flow forecasting calculations, we recommend that you look at individual streams of revenue as well as liabilities from expenses. This information allows you to anticipate when there will be a cash surplus and when funding will be tight. You can then allocate that surplus when needed. You can also accurately predict other things, including market conditions or political influences, that might impact your cash flow and overall business growth. 2. Mitigates Cash Shortages & Enables Anticipation of Bottlenecks Cash flow forecasts can reveal potential cash flow shortages, helping you avoid insolvency or at least lessen its impact. For example, management could postpone investments, liquidate assets, lower cash withdrawals, or pay suppliers with credit to minimize cash flow shortages. 3. Enables More Informed Future Planning Cash flow prediction helps you decide if a significant purchase can be made without jeopardizing the company's financial health. It’s a way to see if your organization can handle introducing new products or when is the best time to retire executives. This shows top management when and how the company can achieve stability. » Discover the benefits and difficulties of conducting a revenue analysis when planning for the future 4. Helps Determine Whether or Not Spending is on Target No matter how big or small, we know that every business has monetary targets it aims to hit. By analyzing your company's cash flow prediction, you'll learn if and when your goals are within reach. Moreover, you get to look closely at your budgeting and individual line items, analyze any patterns, and create more accurate budgets in the future. » Follow these tips to keep track of your business expenses 5. Simplifies Keeping Track of Overdue Payments Small businesses often extend credit to customers, which we think can be a risky move. A cash flow forecast helps you keep tabs on outstanding payments and better prepare yourself for any expenses or liabilities that might come up. It's also a way to manage any credit you offer customers who frequently miss payment deadlines. 6. Streamlines Management of Surplus Cash It’s essential to know when a surplus will occur so that you can make sure the money is used in the most effective way possible. For example, use it for debt reduction or reinvestment into your business. A few months of surplus implies you can afford to make long-term investments such as new products or services or implement new processes. » Follow this beginner's guide to profit and loss statements to help manage cash flow 5 Fundamental Cons of Cash Flow Forecasting 1. Complicated to Account For Unforeseen Factors We want to stress that cash flow forecasting is not an exact science. Many uncontrollable factors can affect the forecasted numbers: environmental changes, changes in political leaders, inflation, and emergency repairs. 2. Always Involves Some Degree of Probability While doing calculations, you might assume that nothing unexpected will happen in the future—no promotions, no price increases or decreases, and so on. This is unrealistic and could spell bad news for your company if you use it as a basis for business decisions. 3. Provides a False Sense of Security When you’re laying out your plan, you tend to create it with a positive outlook. But in reality, there’s a wide range of variables that impact the cash flow of your company. If you don’t have money set aside for unexpected occurrences, you're forced to make budget concessions elsewhere. 4. Manual Errors & Miscalculation May Result in Debt There are several potential issues you can face if you manually compile your cash flow forecast in a program like Excel. Inaccurate computations result from a number of human errors, including sloppy data entry, imprecise formulas, and duplication. All of these can be very expensive mistakes. 5. Can Result in Ineffective & Uninformed Decision-Making If your cash flow forecast is poorly crafted, you'll make ineffective and ill-informed decisions. For example, your company makes a large investment in cutting-edge production machinery in anticipation of future growth, only you're caught off guard later by an unanticipated change. If your revenue projections are too optimistic, you're in danger of overspending. The wrong forecasts put your business at risk of bankruptcy or other financial crises. » Analyze your net, gross and operating profit margins to make sure you stay on track What's the Verdict on Cash Flow Forecasting? While a cash flow forecast is an excellent way to predict the future financial health of your business, you should be aware that it’s not always accurate. Since cash flow forecasts don't consider many external factors, it's up to you to monitor and adequately respond to what's happening. We recommend that you incorporate accountability in all areas and include periodic reviews of your projection to control your finances better.
Business management4 Simple Steps to a Seamless Wix Shopify IntegrationPlatform integration gives you the opportunity to ameliorate the overall customer experience and drive your sales. The good news is that integration can be approached in different ways, such as Wix App Market or other third-party service providers like top Marketplaces, Sales Applications, and Marketing Solutions. The bad news is that some of these other integration options can be expensive and complicated to use. With the Wix Shopify Integration, you can integrate your platforms in four easy steps. » Want to connect your Shopify store to TikTok? Here's how 1. Create a Shopify Buy Button & Copy the Embedded HTML Code To get started with your integration, you need to create a Shopify Buy Button. To do this, navigate to your admin page. Once you're on the admin page, click on "Create Buy Button". This will create a Buy Button for the product or collection you're selling on Wix. Next, select and copy the embedded HTML code for it. Save the copied HTML embedded codes directly into the Wix website editor so they're ready when you need them. Pro tip: If you want to add more than one Buy Button, all you need to do is repeat these steps. 2. Select the Wix Site You Wish to Add the Shopify Buy Button to Now it's time to log into your Wix account. Once you're in, navigate to the "My Sites" section and choose the site you want to update. Next, click on "Edit Site" at the bottom. This will help you to start the process of modifying your website, which takes us to the next step. » Learn how to choose a profit tracker for Wix 3. Add & Update the Embedded HTML Code Now, you're going to need the embedded HTML code you copied in Step 1. Navigate to the "+" (plus) button using your Wix Website Editor and select "More". Copy the HTML code and select "Enter Code". Now paste the HTML code into the section that says "Add your code here". You'll find it in the HTML "Settings" window. Now, click on "Update". Pro tip: Once you've pasted the code into the HTML Editor, you can style the button using CSS. 4. Finalize Your Wix Shopify Integration Almost there! As soon as you have updated your Wix website with the HTML code from Step 1, all you need to do is click on "Save". Now you can take advantage of the benefits you'll get from having an integrated and seamless website. Firstly, you'll offer a connected user experience, which means your customers can buy your products in a way that's no longer disruptive. Secondly, you can track your performance using both Wix and Shopify website analytics. You get to track your conversions, emails, and UTM (urchin tracking module). You'll also be able to analyze your sales and average order value while pinpointing your best-selling products generated through your Buy Buttons. All these features and capabilities will help you sell your products using different methods and, at the same time, help you increase the traffic going to your site. Bottom Line So, if you're the owner of a Shopify store and use the free Wix website builder, integrating these two platforms will help you track your website performance even more accurately. Take some time to compare Wix and Shopify for e-commerce to get a holistic view of what this integration can mean for your business. If used optimally, you'll see an increase in your sales while using the extra sales opportunities that come from a unified, seamless platform. » Unsure how to track and analyze your performance? Let BeProfit help
BusinessBest 12 Product Return Management Software For EcommerceDo you know, 80% of ecommerce customers believe that a lousy return experience can break their loyalty? That’s the reason why you should integrate with good return management software and streamline your return process. If you are looking for return management solutions, then you are at the right place. Here we have curated a list of the top 12 software that will assist you in managing your returns. So, let’s dive in and check out all the software: Helplama HelpdeskHappy Returns Loop Returns Return Logic Returnly AfterShip Orderhive Ordoro Return Rabbit Narvar Ship HafbackReturnGo Helplama Helpdesk Helplama Helpdesk provides 24X7 return management in your store which ensures that no malpractice occurs while returning the product. It even assists you with the entire order and return history of customers which helps you in reducing return abuse in your store. Features Empower your customers to create returns/exchanges with an automated self-service portal.Allows you to download return labels in just a click. Helplama provides proactive support by automatically identifying delays related to your customers’ orders which you can solve beforehand and scale up the customer experience. Pricing Free- 15 DaysStandard- $99/Month/3 usersPro- $199/Month/3 usersEnterprise- $399/Month/3 users Start 15-day Free Trial Happy Returns Happy Returns is one of the few software that provides three types of returns solutions - return to the store, return bars, and product exchange. It provides an automated custom process by automatically submitting an electronic commercial invoice on your behalf. Features You can write custom return reasons, which will help you analyze the reason for product return. Provides multilingual support in 6 different languages like Dutch, French, Spanish, and more. Pricing Plus- $500/MonthEnterprise- Custom pricing Visit Website Loop Returns Loop Returns can automatically enforce your return policies and approve, reject, or flag a product return, saving you time and manual labor. The software has inbuilt metrics that can bifurcate the number of returns, exchanges, shopping, and more. Features Allows you to solve the reason for the return by collecting customer reviews and converting them into a report. Comes with a logistic feature that allows you to decide where the product should be returned. Pricing They have not listed the pricing. Visit Website Return Logics This software allows your warehouse team to get a birds-eye view of all the returned inventory, shipments, and more that have taken place in your supply chain. It even allows your customer support team to automate manual tasks and cut down on email queries. Features Return Logic provides warranty return and ensures that the returned item reaches your location safely. Gives you a report on the most profitable shoppers. Pricing Essential- $299/MonthBusiness- $599/MonthEnterprise- Custom pricing Visit Website Also Read: Learn eCommerce With Digital Experts Returnly If you are a company working for a cause then Returnly’s green return can be beneficial for you. The green return allows your customers to keep the product with them if it can not be reused, for example, cosmetic products, skin care products, low-value products, and more. Features Has a tracking page that assists your customers to track returns and order delivery. Allows international and in-store product returns. Pricing You need to book a demo to get their pricing. Visit Website AfterShip AfterShip allows you to custom-build a tracking page and provide branded experience to your customers. Additionally, it can send notifications to your customers via Email, SMS, and Facebook and make them aware of the return process. Features It can drive sales with email marketing campaigns. You can capture leads with AfterShips’s pop-up form. Pricing Essential- $11/MonthPro- $119/MonthPremium- $179/MonthEnterprise- Custom pricing Visit Website Orderhive Orderhive is a B2B and D2C order and return management software. It provides accurate stock counts with integrated warehouse management that saves your time and reduces the chances of human error. Features You can categorize, improve, and prioritize fulfillment categories. Comes with advanced reporting. Pricing Essential- $125/MonthPro- $225/MonthPro Plus- $325/MonthEnterprise- $500/Month Visit Website Ordoro Through Ordoro you can create and track RMA (return merchandise authorization) directly from their original order. The software can automatically send a return label to customers via email and ensure that your customers don’t send the article to the wrong address. Features Ordoro can receive and restock your returned orders.Can integrate with many shopping carts like Shopify, BigCommerce, Magento, WooCommerce, and many more. Pricing Free- 1000 Orders/MonthExpress- $59/MonthPro- $499/MonthEnterprise- $999/Month Visit Website Return Rabbit Return Rabbit’s workflow automation can automatically accept or reject a return request which saves your agents’ time. Moreover, it can automatically send emails to your customers and keep them informed of every return process step. Features Has dashboard analytic feature. Return Rabbit has an order tracking page that can be customized as per your store. Pricing Startup Plan- $200/MonthGrowth Plan- $400/MonthMarket Leader Plan- $515/MonthEnterprise Plan- Custom pricing Visit Website Narvar Ship Narvar Ship has more than 200,000 drop-off locations that allow your customers to easily return the product. You can even set VIP rules and prioritize your important customers. Features Can send notifications via email, SMS, Whatsapp, or Line. Promotes the exchange of products which reduces the return rate in your store. The software can predict the delay in delivery according to the courier service providers. Pricing They have not listed their pricing, you need to contact their sales team or book a demo to get a better idea of the plans. Visit Website Hafback Through Hafback you can build a branded return page and it can even integrate with your Shopify store in minutes. Additionally, Hafback works towards a green environment by planting 1 tree in exchange for 1 return. Features Hafback allows you to eliminate reverse logistics costs. It allows you to create a separate selling page for returned products. Pricing Basic- $199/Month Visit Website Also Read: 6 Best Plugins To Enhance Your WooCommerce Store ReturnGo With the help of ReturnGo you can easily convert returns into store credit and ensure you sell a product in the coming future. It allows your customers to drop the product at your nearby store reducing the chances of a product being lost. Features Can notify your customers of every return process reducing customer support queries. Provides actionable insights. Pricing They have not listed their pricing plans. Visit Website Conclusion Now, in the end, we hope that this article will help you decide on the best return management software. Although, most of the above-listed return management systems provide a free trial which you can use and then choose the best from the lot. However, if you are looking for software that allows you to discover your true ecommerce profit, then you should try BeProfit. It provides a cutting-edge cohort analysis for deep-level insights into customer lifetime value and marketing performance. Moreover, you can use the app anywhere and anytime to get your data. So, what are you waiting for? Start your free trial now!
Business data analysisPerfecting Your Sales Funnel With Micro & Macro Goals on GA 4If you have worked with older versions of Google Analytics—such as Universal Analytics—you will know all about the Google Analytics micro and macro goals. In short, this is what Google Analytics called conversions before GA 4 arrived. So if we exchange "goals" for "conversions," you'll have GA4's micro conversions and macro conversions. All important interactions that you are leading your customers to complete are called conversions. Therefore, micro conversions are those interactions that lead your clients to finalize a macro conversion. A macro conversion is an ultimate conversion, such as the sale of a product. Let's look at an example: you have an online shoe store. A micro conversion is when your customer subscribes to your email newsletters. The email newsletters contain special discounts and deals that lead your client to a macro conversion—the sale of a pair of your shoes. How to Set Up Micro & Macro Conversions on GA4 There are three ways that you can set up micro and macro conversions on GA4. First, we will take a look at the three options, and then break each option down into step-by-step guides. Additionally, consider taking a look at our guide to increasing Shopify conversions with Instagram. Option 1: Create a New Conversion Event Using Events Already Collected in GA4 Log into GA 4Choose the propertyNavigate to the left-hand side menuClick on "Conversions"Click on "New Conversion Event"Type in the name of the eventSave, and you're done! Option 2: Set up a New Conversion Event Using a Custom Event Go to "All Events" on your propertyClick on "Create Event" Enter the name of the eventConfigure the parameters in the "Matching Conditions" sectionNavigate to "Conversions"Click on "New Conversion Event"Enter the name that you chose for the event—just remember that it needs to be the same as the name of the event that you createdSave, and you're done! Option 3: Using Google Tag Manager Click on "Tag"You'll find it in the left-hand side menuClick "New" > "Tag type" > "Google Analytics: GA4 event"In the tag, you must specify the name of the event, add your parameters and then create a trigger to assign to your tagSave the tagThe GA4 container will start to populate with the new custom eventJust remember to tell GA4 to mark this event as a conversion Examples of Micro & Macro Goals Driving Funnel Conversions Let's go look at an online store that sells kid computers as an example: Macro Conversions (Goals) This might be the sale of a kiddies' computer. Micro Conversions (Goals) Following a sales funnel order: Interaction with your landing page (clicking on sections)Viewing a video that explains how the computer can benefit childrenSigning up for your marketing emailerReading reviews from customersAdding a computer to a wish listAdding a computer to the cart Selecting the Best Micro & Macro Conversions for Your Business Choosing the right macro conversions will depend largely on what industry you are in and your platform for selling—dropshipping in 2022 is vastly different from running an in-store bakery. However, micro conversions are generally common in all industries. Let's look at three examples of macro conversions per industry: E-commerce The finalization of a sale using, for example, Google Ads conversion trackingSocial media platforms The opening of an accountBrick and mortar stores Signing up for a newsletter So, Which Should You Choose? There is no one-size-fits-all solution for selecting the best micro and macro conversions. It's important to remember that they need to work together to give you insights into building a successful sales funnel. In other words, your micro goals should follow your customer journey to reach the main goal of macro conversions. This will tell you what is catching your customer's attention and what is leading to an interaction, and that's where you need to focus your attention. It also means that your micro goals will change organically over time, while your macro conversions are not likely to change. Just remember to check out the best Shopify sales funnel apps for optimum results. To set your conversion goals, you need to plot the full customer journey. Once you have a typical journey of your website, you will need to decide which digital touchpoints or milestones may lead to macro conversions. Remember, this is not set in stone. As you analyze your metrics and data, you will set new micro conversions because they are developed over time. Concluding Thoughts It's never a walk in the park to optimize the data and analytics of an e-commerce store. The key takeaway is that you will learn over time, and it will become easier as you learn more. There is also so much information on the internet; you just need to google your questions and take the time to read up on the answers. The point is that not having micro and macro conversions is like walking with blinkers on—you will eventually be left behind. Challenge yourself, learn, grow, and give your competitors a run for their money! And always remember that goals are just one method of boosting conversions—read How to Increase Your Shopify Conversion Rate and How to Use Facebook Conversions API for Your Shopify Store.
Marketing4 Simple Steps for Connecting TikTok to Your Shopify StoreAs a Shopify seller, you'll benefit from stretching your marketing efforts to every corner of social media, including TikTok. TikTok is a reasonably untapped market that can give you access to a younger user base, thus creating opportunities to boost sales, engagement, and brand awareness. If you're curious about how to link your Shopify store with TikTok, the following steps will guide you through the process. » Should you invest in TikTok? Discover if TikTok ads are worth it 1. Download & Install the TikTok App on Shopify From your Shopify Admin, navigate to the search bar and type in "TikTok". Alternatively, you can navigate to the app tab on the left-hand panel and perform the same search. Select the official TikTok by TikTok Inc. App. You should note that the TikTok app for Shopify is only available for stores that have a business address in the following countries:United States, United Kingdom, Spain, Germany, Italy, France, Indonesia, Thailand, Vietnam, Malaysia, Japan, Israel, South Korea, Canada, Australia, Austria, Sweden, Ireland, Saudi Arabia, Egypt, United Arab Emirates, Philippines, Poland, Singapore, New Zealand, Belgium, Netherlands, Denmark, Portugal, Greece, Finland, Turkey, China, Hong Kong SAR, Switzerland, Norway, Russia, or Brazil. Select Add app to install the Tiktok app to your Shopify store. 2. Set Up & Connect Your TikTok Business Account Once the TikTok app has been installed, it will be added to the left-hand panel. Select this tab and then select "Set up now". From the window that opens, select "Connect account" to connect your TikTok business account to your store. If you don't have a TikTok business account, one can be created by following the "Create a TikTok For Business account" link or by navigating to the TikTok business page. In the window that opens, enter your TikTok business account details and log in. Next, you'll need to connect the Tiktok ads manager by selecting "Connect" in the relevant box. The level of customer data sharing will also need to be selected. This data is used to target posts and ads with Tiktok users, which allows Tiktok to measure campaign performance and improve targeting. You can find out more information about data sharing by selecting the "Learn More" link within the Customer Data Sharing box. 3. Implement a TikTok Pixel for Tracking Purposes After selecting your data-sharing options, you will need to connect a TikTok pixel on Shopify to track the impact of your ads on your store. If you have a pixel, select it and click on "Connect". If you don't, you'll need to create one by selecting the "Create New Pixel" link. Once your pixel has been created you can connect it and then select "Confirm" to continue. The Tiktok pixel makes it possible to track events across your store, giving you insight into how your ads perform. Some elements that the Tiktok pixel tracks include: User actionsCustomer behaviorConversions » Need more clarification on pixels? Here's the simplest way to install and use TikTok pixels 4. Verify Your Pixel is Active Finally, you'll need to ensure that your TikTok pixel is verified and activated. To do this, log in to your TikTok Business Account, hover over "Assets" and then select "Events". Look for the pixel that you created in Shopify. How You'll Benefit From Connecting TikTok to Shopify Run ads directly from your Shopify store Connecting TikTok to your Shopify store allows you to advertise and sell your products directly through Shopify with shoppable videos and tags. The new shopping tab lets users browse for products without ever having to leave the platform.Create custom audiences Through Shopify, you can control and adjust the settings of your TikTok campaigns such as refining the audience you want to advertise to or the products you want to showcase.Improved insights Thanks to pixel tracking and Shopify's analytics, you can keep better track of how your campaigns are performing and pinpoint any problem areas. » Should you invest in other social media? Find out if TikTok vs Facebook ads are better Let BeProfit Help Once you've tapped into the more than one billion active users on TikTok, you'll need to keep close track of your TikTok ads metrics and how it influences your business and its profits. The innovative app from BeProfit lets you connect all your stores to one dashboard, thereby allowing you to easily track the profits from your marketing efforts from a single location. » Want to see what BeProfit offers? Explore BeProfit's features
Business data analysisCohort Analysis: How to Better Understand Your CustomersAs an e-commerce store owner, it's important to understand how customers engage with your site, because then you can optimize your pages accordingly. By using cohort analysis, you can achieve an even deeper understanding of your customer base, because you're relying on data parsing and predictive modeling for the future. Now, you may share the common misconception that you need a data scientist to do this analysis—but you don't. You can easily and successfully do it by yourself, thereby benefiting from its significant advantages, particularly in the context of e-commerce. e-Commerce Cohort Analysis An e-commerce cohort analysis will group your clients according to common traits and characteristics. Within each cohort, you can track users' entire customer journey to identify key patterns and any changes in their behavior. Cohort analysis can answer questions like: How often do customers shop in your store?How much do they spend (average order value)?How long do they engage with your store? Understanding Cohorts Every cohort is time-bound: it has a start and end date. This is because one user can belong to multiple cohorts during different time periods. For example, a user can buy different products, use different devices to access your site, or carry out actions on different days. You can conduct your analysis more easily when you focus on data set in a certain time period. For e-commerce, you can analyze the following cohorts: Product or service Find out which of your products or services encourage repeat purchases. You can focus on these items in your marketing campaigns. Country What works in one country doesn't always work in another. Understanding the different trends according to geographical areas will give you deeper insights into your customers' behavior.Marketing channels Determine how customers engage with your marketing channels, because this will help you optimize your ad campaigns. » Struggling with ad campaigns? Follow this ultimate guide to e-commerce ads Behavioral Cohorts Behavioral cohorts allow you to define a specific group of users based on their actions over a specified period of time. For example, customers who buy a discounted product on the same day during a sale period are a behavioral cohort because they have a high affinity for discounts. Behavioral cohorts can help you understand your customers better because: You get to see how your users engage with your business.You find out which of your marketing campaigns attract which customers.You'll learn how to retain customers and get valuable insights into your churn rate. Acquisition Cohorts Acquisition cohorts focus on the "when" and "how" of acquiring a new customer. This can be replicated to acquire more customers. Examples of some grouping factors in acquisition cohorts include: Types of discounts usedType of marketing campaign with the highest engagementMarketing channel with the highest engagementProducts purchased Acquisition dates The insights you can get from these grouping factors can help you determine which discounts are most popular, which marketing campaigns and channels work best for your business, which products are more popular, and when customers are more likely to convert. Acquisition cohorts will also tell you at which point of the customer lifecycle or journey your users are more likely to drop off. » What does it cost to acquire customers? Here's how to calculate customer acquisition cost Additional Benefits of Cohort Analysis for e-Commerce But that's not all. Here are additional benefits of cohort analysis that you simply can't ignore: Identify best sellers Other than identifying your popular products, you can identify best sellers and seasonal trends. This will help you to plan your stock holding according to what your customers want and when.Identify your best-performing acquisition channels Knowing which of your channels is enabling the most sales will help you adjust the other channels in a similar way, streamlining the purchasing process for all customers on all channels.Reinforce your marketing efforts with data When you know what works and what doesn't, you can adjust your campaigns accordingly— eventually reaching a point where you give your customers exactly what they want. » Do you have a Shopify store? Learn how to conduct cohort analysis for Shopify Bottom Line If you want a thriving e-commerce business, you need to get into the minds of your customers successfully. Cohort analysis will help you achieve this. Sure, there are other data analytics you can use, but beware of "vanity" analyses that give you numbers that may make you feel good, but don't give you engagement (like cohort analysis does). Engagement is a much richer and more valuable look into the characters and behavior of your customers. If you need some help with cohort analysis, consider BeProfit's innovative app to help you effortlessly solve the pain points of profit tracking and calculation. » Need an all-in-one data analytics partner? Explore BeProfit's solutions
Profit optimizationHow to Calculate Incremental Margin in e-Commerce (Formula + Explanation)Are you new to the big, wide world of e-commerce analytics? Do you find it complicated and overwhelming? Well, you're not alone. Even some of the more experienced sellers are constantly looking for new ways to advance their insights and optimize their decisions. Calculating and understanding incremental margin is a useful metric to help you dig deeper into your profitability and growth. » Worried about your profit margins? Explore how to increase your e-commerce profit margin Understanding Incremental Margin Let's start right at the beginning. Margin is the profit you make from selling your products or services, thereby giving you perspective on the overall financial health of your business. Incremental margin is the profit you make from selling an incremental unit of your product or service. In other words, it measures how your profits change because your sales volume has changed. This feeds directly into the growth of your business, because incremental margin will help you make predictions about your business's future performance. In comparison, margins reflect your business's current performance only. Formula Use this formula to calculate your incremental margin: Incremental Margin =(Ending Profit Metric - Beginning Profit Metric) / (Ending Revenue - Beginning Revenue) Incremental margin can be expressed as a percentage. It measures how a specific profit metric has changed in relation to any changes that occurred in revenue. Therefore, you can customize the formula according to which data you want to analyze (e.g., net profit margin, gross profit margin, EBITDA margin, etc.). The different metrics will have different increments. Common Profit Margin Metrics to Calculate Incrementally Gross Profit Margin Use this formula to calculate your gross profit margin: Gross Profit Margin = Gross Profit / Revenue x 100 Gross profit margin tells you how much profit you've made after you've deducted the cost of goods sold (COGS). This refers to the direct costs that are associated with the production of the products or services you sell. Gross profit margin provides perspective on your business's profitability, but because it focuses on direct costs only, it also comments on the management of these costs. A low gross profit margin may indicate operational changes are necessary. » How do you calculate COGS? Follow this easy guide EBITDA Margin Use this formula to calculate your EBITDA (earnings before interest, taxes, depreciation, and amortization) margin: EBITDA margin = EBITA / Total revenue x 100 EBITDA margin measures how much your business earns before interest, taxes, depreciation, and amortization. Calculate your earnings by deducting operating expenses (COGS, selling, general, and administrative expenses) from your sales revenue. EBITDA margin is also known as a profitability ratio. Specifically, it indicates whether your business has a healthy cash flow because the calculation doesn't take non-cash expenses into consideration. Net Profit Margin Use this formula to calculate your net profit margin: Net Profit Margin = Net Income / Revenue x 100 Unlike your gross profit margin, your net profit margin accounts for all your expenses. Calculate your net profit margin by deducting COGS, interest, taxes, operating, and other expenses. Net profit margin is easily the most important profitability analysis calculation. Ultimately, it tells you whether your current practices are working because it checks that you're generating enough profit while keeping your expenses under control. You can also use this metric to compare your business's performance across different reporting periods, thereby setting benchmarks for yourself. Operating Margin Use this formula to calculate your operating profit margin: Operating Profit Margin =Operating Profit / Revenue x 100 Your operating profit margin is a performance ratio. It tells you the percentage of profit your business makes from sales after paying for production, but before deducting interest and taxes. Operating profit margin, also known as Return on Sales (ROS), checks whether you manage your sales effectively, i.e., can you produce profits just from your core operation? If not, then it means most of your revenue is coming from another source—and not the product or service you're selling. » How do you evaluate profit margins? Find out how to determine high profit margins Best Practices for Interpreting Incremental Margin Make sure you're working with correct and useful data. There's no point in calculating incremental margin if it's going to be incorrect. Consider investing in a profit calculator tool to help you manage your data and calculations. BeProfit allows you to connect all of your e-commerce stores to one platform with an aggregated view of your business performance. Also, realize that calculations can vary, especially if you're in manufacturing and dependent on external factors. View your incremental margin realistically and investigate when it indicates problems. » Need help calculating your profits? Let BeProfit help