Profit Analytics Blog
Read expert articles with insights about e-commerce profitability from analyzing thousands of e-commerce businesses' data.
How BeProfit Helped Suntouched Double Their Profits and Cut Expenses in Half
Learn how Suntouched, the eCom brand enabling sun-kissed, summer hair in every season, uses BeProfit to more than halve their expenses and double their profits. Increased profits by at least 2xReduced expenses by almost 60%Saved 5–10 hours per week in work If I had to sum up BeProfit, I would say this tool is a must-have for any founder trying to scale and make the right business decisions for their brand’s profitability." - Charlotte St-Germain, Founder & CEO of Suntouched About Customers across the globe turn to Suntouched for sunshine in a bottle. The omnichannel brand’s hair-lightening sprays are formulated with clean, hydrating ingredients and help you hold on to your beachy, sun-kissed, summer hair year-round. To gain clarity on their metrics and maximize profit margins, the Suntouched team turned to BeProfit. The Challenge Without airtight analytics, short-term decisions burn through your runway. Charlotte St-Germain, Founder & CEO of Suntouched, admits that juggling endless tasks as a solo eCom founder can be draining — and that finances are her least favorite responsibility. Early on, she got away with very basic startup analytics to stay afloat. However, soon enough, the company’s reliance on inaccurate financial data led to short-term decision-making. For instance, they wound up expanding the team too soon based on Shopify sales numbers, rather than true gross margins or net profit. These decisions based on subpar analytics compounded, leading to maxed-out cards and dwindling runway. Her brand’s challenges with nailing profit margins eventually led Charlotte to BeProfit. As a solo founder, you take care of everything, and finances are just not my favorite aspect of the job. It got to a point where, although the sales were coming in as our top line increased, we didn’t know where the money was truly going.” The Solution The Suntouched team tried a handful of analytics tools, such as Triple Whale, but found these were ultimately incompatible or overpriced when the brand needed to be cutting costs. Fortunately, Charlotte was eventually connected to BeProfit by friends in the eCom founder space. “They just sounded so happy with the real-time insights,” she explains. From there, BeProfit and Suntouched hopped on a call, tailoring the platform to meet the brand’s unique needs and omnichannel setup. After an easy sync with their commerce and ad profiles, Suntouched was ready for more data visibility and accuracy than ever before. The team at BeProfit has been super responsive and optimized everything for my brand’s needs. I’ve received really amazing support in our experience together.” The Strategy Suntouched has leveraged BeProfit to dramatically boost profitability — in three steps. 1. Gain an accurate & comprehensive view of your current finances Before BeProfit, Charlotte received monthly P&Ls, which were often confusing and inconsistent, from her accountants. Now, Suntouched has seen “a huge difference” in data accuracy. As a result, the brand has been able to come to terms with the reality of their finances. Despite believing they were profitable, BeProfit shed light on the fact that Suntouched had been in the red for several months and unfortunately needed to reduce the size of their team. “It was so hard,” Charlotte emphasizes, “but it showed me the resources we had to work with and helped us spend within our means.” 2. Identify your profit centers to allocate runway accordingly Suntouched turns to their profit analysis dashboard to know their numbers and make the highest-ROI decisions on a daily basis. For instance, if returns are climbing for one social channel, Charlotte will ping her buyer to start scaling that creative. Or, in another instance, Charlotte was surprised when BeProfit demonstrated that Amazon was the Suntouched team’s greatest profit driver. While the brand’s top line is higher on Shopify, factors like cheaper ad spend mean they receive ample organic traffic and sales on Amazon. As a result, Suntouched used the data and put more funds toward maximizing that profit center (as opposed to focusing on Shopify for ultimately fewer returns). 3. Save time & money by viewing your KPIs on 1 intuitive dashboard Thanks to BeProfit’s dashboard, which provides a centralized look at all of your real-time eCom data, Suntouched can easily view their Shopify, Amazon, and ad performance on one screen. No more switching between endless tabs, sales channels, and ad managers to understand your net profit, revenue, gross margins, and much more. “It’s a huge time-saver,” says Charlotte. In addition to time and effort, Suntouched also saves on people costs. Previously, Charlotte had to hire staffers to manually manage financial data, and delays in communication led to delays in course-correcting their spending. Today, Suntouched can instantly view their data and make informed, profit-driving business decisions. I definitely use BeProfit on a daily basis. When I open my laptop [or phone], I go to my dashboard right way. It’s made a huge difference in terms of just knowing where to put more funds and focus.” The Results Overall, BeProfit has been a game-changer for the Suntouched team. Since onboarding, our platform has helped the brand drive three impressive metric wins: Suntouched has more than halved their expenses for a roughly 60% reduction. They save anywhere from 5–10 hours per week of manual data analytics labor. Reduced expenses and data-informed budgeting have doubled their profits. I expected BeProfit to give me a stronger understanding of my basic numbers. What actually happened is it completely transformed my business for the better.” The Future Looking forward, Charlotte has an impressive vision for the growth of Suntouched. And she anticipates scaling with BeProfit as her financial partner all the way. She calls the platform “a layer of security” for her company, always keeping operational costs lean while opening up Suntouched to maximum profit margins.
Profit calculationAmazon FBA Profit Calculator Is Inaccurate—How Sellers Can Avoid Costly MistakesWhile the Amazon FBA profit calculator is a handy tool, it shouldn't be taken as gospel. What do we mean by that? The information you get from the Amazon FBA profit calculator is not wrong—but it is only a guideline for your revenue analysis. So, why use the calculator at all then? Because it still gives you a good idea of your revenue. But, you need to understand the inaccuracies so that you don't get caught, like many others, with small errors that end up costing you a small fortune. It also needs to be used in conjunction with other profit calculation methods. The bottom line: to promote your Amazon products at a fair price, you need an accurate calculation of the FBA costs to maximize your e-commerce profit margin. Understanding the Difference Between FBA and FBM It's essential first to understand what FBA means and how it differs from FBM. Where FBA stands for Fulfilled by Amazon, FBM stands for Fulfilled by Merchant. What's the difference between FBA and FBM? With FBA, the merchant pays Amazon to store and ship its inventory. With FBM, the merchant stores and ships the inventory in-house—that is, this function is not outsourced to Amazon. Why the Amazon FBA Profit Calculator Isn't Always Accurate The Amazon FBA calculator—otherwise known as the Amazon profitability calculator—isn't always 100% accurate. This is because many sellers have different products and unique requirements. It would be almost impossible to create an accurate calculator that would work perfectly for such a vast market of sellers. Amazon confirms this in its disclaimer: This Fulfillment by Amazon Revenue Calculator should be used as a guide in evaluating FBA only. Amazon does not warrant the accuracy of the information or calculations in this Revenue Calculator. Independent analysis of the output of this Revenue Calculator should be conducted to verify the results. Avoiding 5 Expensive Amazon FBA Mistakes These are five of the most common mistakes that sellers make and how they can be avoided: 1. Taking Your Eyes off Your Books and Accounting Never lose track of your books. For your Amazon FBA business to work, you need to very carefully calculate your profits on your own, using the FBA calculator as a guide. The one disadvantage of Amazon is that you have many competitors. Your calculations need to be so sharp that you offer the best value for money. 2. Not Understanding the Full Scope of Fees Charged There are Amazon selling fees and FBA fees. Both sets of fees depend on different variances. For example, if you buy too much stock and it stays in Amazon storage for longer than expected, fees could increase. You need to know and understand the full details of the fees charged. 3. Not Realizing That There Are Gaps in the Calculations The calculator takes the basic costs into consideration. It doesn't take expenses like taxes, advertising and Amazon product promotion, and overheads into account. You would need to include these and other hidden costs when tracking your expenses for a more accurate picture of your profits. 4. Not Including Returns in Your Calculations Inevitably, there will be defective products and packaging. There will also always be customers that are not happy with your products. Sending products back will cost you, and this also needs to be accounted for. 5. Not Providing Amazon With Accurate Descriptions of Your Products If you input inaccurate dimensions of your products, you could be calculating the total costs of storage and delivery incorrectly. Let's look at an example. You sell a product for years, and it gets updated. Expectedly, the new packaging is slightly bigger than the previous packaging. You calculate costs according to the old specs, and Amazon calculates costs according to their measurements while in storage. » Learn how to track and calculate your profit on Amazon FBA Other Ways to Calculate Your Profit Fortunately, you don't need to rely 100% on the Amazon version, as there are other calculators to use. Five FBA calculators you could consider if you would like to research other options include: Seller App AMZScoutJungle Scout Viral LaunchHelium 10 » Discover the best Amazon FBA calculator Finding the Best Solution There are various other ways to calculate your profit—each different way will work better for some e-commerce stores than others. You should take some time to try the different versions out simultaneously, and you will soon see which calculator is the most accurate for your business and your products. There is no manual to give you all the right answers; otherwise, everyone would be highly successful Amazon merchants. The trick is to learn and keep learning, research and keep researching, and never stop growing. Good luck!
Profit calculationHow to Track and Calculate Your Profit on Amazon FBAYou may be wondering what Amazon FBA is, and you are not alone. It stands for Fulfillment By Amazon, a service that helps Amazon sellers outsource their shipping requirements to Amazon. How the Amazon FBA Calculator Works The Amazon FBA calculator is a very handy tool for anyone who is thinking about outsourcing their shipping requirements to Amazon to avoid having to calculate your own shipping costs. It calculates how much money you will make selling your products through Amazon's logistical network. It goes without saying that you need to have a clear understanding of the costs involved in running your e-commerce store, and shipping is an important aspect of those costs. Just make sure you know what mistakes to avoid when calculating profit. Also, take note that each of marketplace has its own revenue calculator, including Australia, Canada, China, USA, UK, and various European and South American countries. » Learn more about Amazon FBA profit calculators Amazon FBA Profit and Loss Spreadsheet Amazon FBA has a few handy tricks up its sleeve—one of them being its profit and loss spreadsheet. Make no mistake, the spreadsheet can be tricky if you don't manage it well; however, it can be managed better if it is all incorporated into an analytical dashboard. How to Use the Amazon FBA Calculator The Amazon FBA calculator is a relatively straightforward tool, designed to show potential sellers how much they can expect to spend on fulfillment, and how much profit they can make. To get started, you’ll need to log into your Amazon account and enter your Seller profile. Click on the Amazon FBA Calculator, or visit this link if you’re having problems. Step 1: Find the Relevant Product Firstly, you must input an “identifier” number to find the product you’re researching. You can use a search term, ISBN, EAN, or ASIN, depending on the information you have, and select a specific location for your search. Step 2: Set the Price Next, you can input values into the fields within the “Amazon Fulfillment” space to figure out a margin for the product. The first value to enter is the price of the item. Research similar products for inspiration and play around with the pricing to see what kind of margin you can achieve when raising or lowering the price. Step 3: Determine Shipping Costs Fill in the “Ship to Amazon” field. If you’re already selling products via Amazon, you should have a good sense of what the average unit price is to ship your items to the Amazon warehouse. This number varies based on the size, weight, and quantity of products being shipped. Again, experiment with a range of costs to see how it impacts the margin. Step 4: Determine Product Cost Complete the “Cost of Product” field. This is where you input the price it costs to purchase your product from a wholesaler or manufacturer. Make sure you use the “all-in” cost, including the price for any overseas shipping, packaging materials, customs, and any extra expenses related to purchasing your items. Step 5: Calculate Your Margins Click the “Calculate” button. From here, the calculator will give you a net profit and net margin for the product as well as your selling on Amazon fees and fulfillment costs. Other Ways to Calculate Profit on Amazon FBA Amazon FBA Profit Margin Calculator This calculator gives a broader view because you can include all your expenses to get to your net profit per unit. To use this calculator, you start by entering some basic information as well as your fixed costs and upfront costs per product. Your job is to replace the red information in the table provided with your own information. You don't need to do anything with the green figures; those are formulas. Just enter "0" if something doesn't apply to your business. The next step is to enter your marketing costs under "advertising" and "promotions and giveaways," but only if you have marketing costs. And finally, enter "calculate," and you'll get your gross margin calculations. Amazon Profit and Loss Dashboard You can also give the BeProfit profit tracker tool a try. BeProfit offers one of the most accurate profit calculators available on the market today. It includes a data analytics dashboard specifically developed for e-commerce businesses. This innovative tool helps you to stay on top of your business finances while optimizing your bottom line. It is easy to navigate and can be a trusted partner that supports you through the highs and lows of your business's journey. FBA is a service offered to businesses that helps them grow by using Amazon's extensive logistics network. It's quite simple in practice—businesses send their products to an Amazon fulfillment center. Once the products are at the center, and a customer buys one, Amazon receives, packs, and ships those orders, while taking care of customer service, returns, and refunds. This isn't the only way to fulfill your e-commerce orders with Amazon—read our Amazon FBA vs FBM post and our dropshipping on Amazon for beginners guide to learn more. Calculate Your Amazon FBA Fees Before you start your business and throughout your product's lifecycle, your very first step is to consider all your costs. There are four main categories of costs that you would need to look into on Amazon: Upfront costs You'll need samples, and you'll need to ship those samples.Variable costs This includes your FBA fees (15% of your product's price plus $3 to handle and ship your product), returns, and storage fees.Marketing costs You'll have to launch your products at some point and then promote them on an ongoing basis.Business costs This includes insurance, taxes, salaries, and wages. These costs largely depend on the product(s) you are selling. All these costs will impact your profits. To offer your customers a product that is value for money, you need to finetune your expenses and sharpen your calculations to find the perfect match between your profit margins and your customer's pocket. Additionally, you'll need an Amazon profit calculator. Struggling to optimize your spending? Read our guide to using Amazon advertising reports to help you do so. » Find the best Amazon FBA calculator Is Amazon FBA Profitable? The short answer to this question is yes. The long answer to this question takes a couple of statistics into account. Firstly, did you know that Amazon’s revenue was $386 billion in 2020? That's quite a leap from $280 billion in 2019. Almost half (54%) of this revenue comes from third-party sellers! But that's not all. A total of 92% of those third-party sellers use Amazon FBA. The bottom line is that the demand for online shopping has increased significantly since the onset of COVID-19. People are feeling more comfortable with online shopping and are, therefore, exploring different online shopping avenues. To drive the point home, 62% of online shoppers start their search for the products they want to buy on Amazon. If that doesn't convince you, nothing will! And once you get started, be sure to take a look at our guide to promoting your Amazon products.
Business metricsHow to Calculate Your e-Commerce Store's Product Return RateHigh e-commerce return rates can be a serious issue for your store's bottom line. Currently, statistics suggest the cost of returns each year amounts to around $101 billion in lost cash for businesses. While returns are problematic for any store, they can be particularly damaging for e-commerce store owners. Apart from having a dissatisfied customer, you miss out on a sale and lose cash on two-way shipping expenses and packaging costs. Understanding Product Return Rate in e-Commerce Product return rate looks at the frequency at which customers return items to your online store. According to studies, a quarter of all consumers return between 5% and 15% of all the items they buy online. If your return rate is higher than this, it could be a sign you need to make some significant changes to your quality management processes. Product Return Rate Calculation: The Formula The formula for calculating product return rate is relatively straightforward. Simply divide the number of products returned by the number of products sold, then multiply by 100. Return Rate = Products Returned / Products Sold x 100 Example Imagine your online clothing store sells 15,000 products within a year, but 5,000 of those products are returned by customers. The formula for calculating your product return rate would be: 5000 / 15,000 x 100 = 33%. If your company sold 10,000 products but had 100 of those items returned, the formula would be: 10,000 / 100 x 100 = 10%. What Is Considered a Good e-Commerce Product Return Rate? A "good" e-commerce product return rate can be difficult to define because the average refund rate for e-commerce stores typically depends on the industry. For instance, apparel retailers generally experience an average return rate of around 12.12%, while home improvement and houseware brands can experience an average return rate of up to 11.5%. After industry, a business's return policy also holds great sway over the return rate. A generous return policy with free returns may have a higher return rate because customers are less likely to accept a product they’re not 100% happy with. Other factors that can contribute to higher return rates include: Price: Organizations selling high-price items may receive more returns because customers have higher expectations.Seasonality: A quarter of holiday shoppers buy items online intending to return them at a later date. Holiday returns are particularly common because gift recipients aren’t always happy with the item they receive. Poor product pages: Companies who provide little product information on their online platforms are more likely to see higher returns because customers may have made an uninformed decision when buying the item. The versatility of product return rates means it’s important for retailers to look at their metrics in the context of customer behavior. Organizations generally achieve the best return rates when they reduce the need for returns with high-quality products, and deliver customer-friendly purchasing policies. Best Practices to Optimize e-Commerce Returns There are a few ways companies can improve customer experiences and mitigate returns. Some of the best strategies to reduce return rates include: Implement the right return policy: A well-crafted return policy can help to reduce product returns and boost sales, while reducing cart abandonment. Make sure your customers know what to expect when returning an item. Make product information accurate and accessible: Ensure your product descriptions provide plenty of clear information for your customers to make confident decisions. Include high-quality photos, interesting product details, and relevant sizing charts. Keep customers informed about returns: Leverage automatic emails and notifications to inform your customers about the returns process. Around 92% of customers say they will buy from a company again if the returns process is simple. Elevate the value of customer reviews: Use customer reviews to highlight the values and benefits of a product in advance of a purchase. Most customers will check reviews to determine what they can expect from a product before buying. Promote exchanges over returns: Give customers a hassle-free way to exchange their products for something else on your store. This will also help to reduce the amount of money you lose from a potential return. » Discover 5 strategies to reduce your e-commerce return rates Reduce Your Return Rates Now that you know how to calculate product return rates, it might be time to think about the other metrics and strategies you can use to improve the success of your online store. Tools like BeProfit can give you a behind-the-scenes insight into the factors that influence your company’s profitability.
Marketing5 Strategies to Reduce Your eCommerce Return RatesA strategic approach to reducing returns is crucial to eCommerce success. The average return rate for eCommerce has doubled in the last few years, bringing it up to 20.8%, and many eCommerce merchants are left scratching their heads about how to cope with this new situation. Consider how you can simplify the return process and learn from it to prevent returns before they happen. What is a Return Rate? Return rate refers to the frequency that your customers return products at your eCommerce store. Return rates are represented as a percentage of the total number of products sold within a specified timeframe. To calculate your product return rate, divide the number of returned items by the total number of items sold and multiply by 100. For example, if you sell 10,000 products in a year, and 2,000 of them were returned, your eCommerce return rate would be 20%. Why Reducing Your Return Rate is Important A high return rate can have a big impact on your profit margins, and can often signal the end of customer relationships. While it’s inevitable that every company (no matter the size) will have to deal with a certain amount of returns, there’s a lot you can do to optimize your customer experience to reduce the chance of customers wanting to send products back. 5 Ways to Reduce Your Returns If your eCommerce business doesn’t already have an effective strategy in place for handling returns, now’s the time to take action. Here are a few hand-picked strategies you can use to reduce your return rates. Optimize Your Product Descriptions The best way to make sure that your products meet your customers’ expectations is to provide them with as much detail as possible. Customers can’t touch or feel online products, so your product descriptions matter. Make sure your customers know exactly what they’re ordering.Make sure each product has a clear headline, a paragraph with details of what makes the product unique, a bulleted list of product specifications and features, and user-generated content like reviews and images.Include high-quality product photos from different angles, and consider incorporating product videos for an even more detailed look at the products. Provide detailed sizing charts with all the measurements your customers need to know or offer a sizing guide based on the sizes they wear in other brands.The more information your customers have before they make a purchase, the less likely they are to return their order.Create a Clearly-Defined Return Policy Your return policy is a key tool for reducing returns by clearly setting expectations.Over 60% of customers check return policies before buying. A well-crafted return policy can act as a prevention barrier for product returns as well as boost sales and reduce cart abandonment.Give your customers the confidence to buy from you, knowing exactly what the terms are for returning an item, and how they would go about doing so.Ensure your returns policy is clearly displayed on your website and is written in an easy-to-read format using bolding, subheadings, and bullet points.Automate Your Returns Process Customers want to support businesses that make their lives easier. When your customers have confidence in your returns process, they won’t hesitate to purchase from you again. 92% of customers say they will buy again if the returns process is easy.Use a post-purchase returns solution like ReturnGO to automate your returns process and simplify things both for your customers and for your team.Provide customers with an online return portal where they can return items without having to deal with back-and-forth emails or wait for someone to get back to them. Set up your return portal to automatically follow your return policy, and give your customers a convenient self-service returns experience.The ideal return process is hassle-free for your customers and cost-effective for your business. Having a good system in place for handling eCommerce returns differentiates your brand, creates a competitive advantage, makes you more profitable, and reduces your return rate. Analyze Your Customers’ Return Patterns Just like you can track which products sell most, you can also track which products are most frequently returned and why. Part of using a returns management system includes having access to insights into your customers’ return patterns, which can help you take data-driven actions to reduce your return rate. Track common return reasons and how your customers like to handle returns. Products that are frequently returned may be defective, packaged poorly, or have an unclear product description. Identifying problematic products and correcting the issues can help you avoid potential future returns for those products.Encourage Exchanges Over Refunds Your return and exchange policy should make the returns process seamless and hassle-free, and give customers a clear incentive to choose an exchange over a refund. A hassle-free exchange process helps keep your customers happy by giving them what they need. Prioritizing exchanges over other types of returns can save your eCommerce store a lot of time and money.More than half of Shopify returns are due to customers ordering the wrong size or style. Giving customers the option to exchange their order for a more suitable product leaves them with an excellent customer experience and increases the chance they’ll buy from your store again.Incentivize customers to request an exchange instead of a refund by offering coupons, discounts, or free shipping specifically on exchanges.Exchanges enhance the customer return experience, increasing customer loyalty and retaining revenue that would be lost with a refund. Prioritizing Reducing the Rate of Your Returns Making sure customers have all the information they need will help provide your customers with a clearer picture of your products and ensure that a higher percentage of them are satisfied with their purchases. Streamlining the return process will help to leave your customers satisfied and provide you with information on how to serve them most effectively. Reducing the number of returns is in everyone’s best interest. Having fewer returns saves you money and creates a better customer experience. Start small - pick one strategy and take the first step towards reducing your return rates.
Business data analysisThe Best Apps for Shopify Cohort AnalysisAnalytics is one of the most valuable tools for anyone starting a Shopify store. The right reports and data insights can provide a behind-the-scenes look into the success of your omnichannel strategies for marketing and sales, or tell you which of your products are achieving the most sales. One of the most important forms of analysis from a marketing and sales perspective is cohort analysis. This is a form of behavioral analytics that takes data from an e-commerce platform and breaks it down into specific segments. Cohort analysis provides you with a comprehensive view of how well your website is performing and which of your customers have the highest lifetime value or engagement levels. Google Analytics for Cohort Analysis One of the easiest ways to conduct a cohort analysis is to connect your Google Analytics account to your Shopify store in the admin center. Simply go into the “Settings” page, then “Apps and Sales” channel, and click on “Online store”. In the “Google Analytics” section, you can paste your code from your Google Analytics account to make the connection. Once connected, you’ll be able to access a range of reports to help improve your Shopify conversion rate, discover your best sources of traffic, and develop opportunities to increase customer loyalty. Google Analytics has its own dedicated “Cohort Analysis” report, available to anyone using the Universal Analytics service. Simply sign into Google Analytics, select “Audience” and then “Cohort Analysis”. The report will show the behaviors of various user groups on your website, offering insights to help you increase organic traffic and increase profit margins. Shopify Apps for Cohort Analysis While Google Analytics is one of the most popular tools for conducting a cohort analysis in Shopify, it’s not the only option. In the Shopify App store, you can find a range of other valuable tools for conducting a customer profitability analysis, or evaluating customer lifetime value. Some of the top-rated options include: 1. Lifetimely Lifetimely is an analytics and reporting app that allows Shopify users to track profits and losses in real-time. This includes a custom dashboard for tracking your preferred KPIs and marketing metrics. Lifetimely has precise cohort analysis tools to help you discover your most profitable segments. The lifetime value model is even powered by AI to help you accurately project the potential lifetime value for each cohort. Plus, benchmarking tools show you how your metrics compare with competing brands. There’s a 14-day trial available for beginners, after which paid pricing starts at $19 per month for the basic package. 2. Customer Intelligence The Customer Intelligence app by RetentionX ensures Shopify users can collect valuable information about their customers and segment them based on their value or behaviors. The all-in-one platform offers deep insights into the key customer segments responsible for driving business profits, and tips for how to identify your ideal market. The tool can help pinpoint customers at risk of churn, so you can reconnect with them. It can also show your most valuable products, so you can upgrade your sales strategies. Customer Intelligence integrates with a range of other apps, so you can link it to your loyalty program for Shopify and your Facebook Ads. What’s more, you can use this app for up to 250 active users without paying anything. The advanced package for more than 250 customers starts at $10 per month. » Find out how you can use cohort analysis tools for your Shopify store 3. BeProfit BeProfit is an all-in-one analytics application for Shopify that specializes in offering real-time profit calculations with an intuitive and customizable dashboard. You can automate reports, or access insights on-demand into order metrics, shipping, inventory, and marketing costs. The service makes it easy to analyze the profitability of different customer groups and track customer lifetime value for your most crucial segments. You can also create custom reports based on your most important metrics, and export them in a range of different formats. BeProfit offers a 7-day trial to beginners, followed by premium packages starting at $25 per month. The basic plan includes a comprehensive profit and expense dashboard, unlimited ad integrations, order and product metrics, and daily data updates. Provides a complete business and financial overview.Access to real-time data and custom reports.Link multiple platforms and shops for an aggregated view. Leveraging Shopify Cohort Analysis Cohort analysis allows e-commerce store owners to understand their target audience, and which customers deliver the most value for their business. Not only can you more accurately distribute your marketing budget with these insights, but you can also improve your chances of retention by finding out exactly what each customer needs from your brand to enjoy a fantastic experience.
Business data analysisHow to Conduct Cohort Analysis for Your Shopify StoreA cohort analysis is one of the most valuable tools Shopify store owners can use to understand their customers, top-selling products, and revenue growth opportunities. The more you care about your data, the more you’ll learn about growing your company. Perfecting analytics using cohorts allows Shopify store owners to answer important questions about their company such as how much you should be investing in specific marketing strategies, or which customers deliver the most revenue. » Struggling to analyze your customer's journey? Perfect your sales funnel with GA4 What Is a Cohort Analysis? Cohort analysis involves tracking data from your store by segmenting users into groups. You can filter your “customer cohort” by a specific time period, marketing platform, or discount code. By using cohort analysis, business leaders can generate meaningful insights into how well a product or service is performing over time. It’s also possible to learn more about the individual groups of customers you’re targeting, and how much value they bring to your brand. Therefore, a successful cohort analysis will assist you in making intelligent decisions about how to adapt your marketing, sales, and pricing strategies, to create the most revenue. » How do you calculate customer profitability? Follow this step-by-step guide for customer profitability analysis Benefits of Cohort Analysis for Your Shopify Store Cohort analysis can help you understand how different changes to your store impact your business, how specific marketing campaigns increase sales, and which customer segments are the most relevant to your business. With a cohort analysis you can: Find your most valuable customers: Determine which of your customers are generating the most revenue, so you can work to improve customer retention with these clients.Identify why and when purchases drop off: Effectively prevent lost sales and boost your chances of constant conversions.Improve marketing campaigns: Determine how much you should be investing in customer acquisition, and which of your lead generation efforts are paying off. Implement new business strategies: Identify and implement new strategies like changing pricing structures and monitoring the impact on customers. » Battling to monitor your store's profitability amidst these changes? Use these tips to perform a profitability analysis How to Perform Your Own Cohort Analysis Cohort analysis tools are the easiest way to collect, aggregate, and access the data you need. There are various solutions available, but some offer greater insights than others. For instance, BeProfit goes beyond the basics of simple lifetime value calculations to provide business leaders with insights into the core elements of profitability. To perform a cohort analysis, you’ll need to: 1. Integrate Your Shopify Data Use a cohort analysis tool that allows you to integrate your data directly from Shopify into your analytics system. This will make it easier to track all the information without copying and pasting tables and raw data into different environments. 2. Choose Your Cohort Decide which group of customers you want to focus on. For instance, you might look into customers purchasing a specific product, or those who come to your Shopify store after clicking a Google or Facebook ad. 3. Select a Time Period Cohort analysis involves looking at the behavior of customers over a specific period of time. For instance, if you want to see how customers respond to a new marketing campaign over a period of 1 month, you can use your cohort analysis tool to analyze the appropriate metrics over 30 days. BeProfit allows you to choose your time period on a weekly, monthly, or yearly basis. 4. Adjust Your Filters Use your cohort analysis tool to focus on the information you’re most interested in. For instance, you can adjust your “base metric” to look at ROAS, gross profit, or repurchase rate. You can also update your data progression to an accumulated or marginal overview. BeProfit also allows you to change your “Calculation Scheme” between “Average Per Customer” or “Total Cohort”. 5. Conduct Your Analysis Once you’ve added all the correct information to your cohort analysis tool, you’ll be able to view your metrics and make decisions based on the data provided. For instance, if you see that the ROAS of your target cohort increased gradually over the course of a month after you implemented a new marketing strategy, you’ll know this advertising effort is working for your brand. If you’re struggling with reading your results, hover your mouse over each cell to view a tooltip that translates the numerical data in the cell into an easy-to-understand sentence. » Discover the best apps for a Shopify cohort analysis Exploring Cohort Analysis Cohort analysis is an important tool for Shopify store owners, but it can also be a daunting concept for beginners. Using the right cohort analysis tool to synchronize and organize your data, like BeProfit, will help you to minimize the complexity involved in understanding your customer base. » Want to explore what BeProfit has to offer? Browse BeProfit's features
MarketingTop 7 Amazon Marketing Metrics You Should 100% Be TrackingMarketing metrics are used to measure the success of a campaign and, in conjunction with retail metrics, can help clarify which methods are fostering business growth and which may be impeding it. Which Amazon Marketing Metrics Are Most Important? You can track a variety of metrics, but you will primarily focus on metrics pertinent to the type of campaign you're running and its objectives. However, there are core metrics you should always measure, and they are: ImpressionsClick-Through RateCost-per-ClickConversion RateReturn on Ad SpendAdvertising Cost of SalesTotal Advertising Cost of Sales Understanding these Amazon marketing metrics can benefit you and your business. Now that you are aware of the marketing metrics you should track, let's examine each of them individually. » Are you using other advertising platforms? See whether Amazon ads vs Google ads are better Data Analysis Made Easy Data analysis can be complicated, particularly when analyzing your profits and expenses. The BeProfit analysis dashboard is designed to simplify your life. » Curious about BeProfit's offering? Explore BeProfit's features 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. 1. Impressions Impressions refer to the number of times your content/ad is displayed to a viewer, but this does not necessarily indicate that the content is engaged with or clicked on. Impressions are not unique and are counted whenever the content is displayed. To calculate possible impressions for a Cost Per Mille (CPM) ad campaign: Impressions = Budget / CPM × 1,000 Impressions can help you understand how many potential customers see your product. By comparing impressions to other metrics like reach and CTR, you can gauge the success of your ad. 2. Click-Through Rate Click-through rate (CTR) is the ratio of clicks to impressions for an ad. CTR reveals only those viewers who have clicked and followed an ad, making it a more targeted metric than impressions. To calculate CTR: CTR = Number of clicks / Number of impressions X 100 A good average CTR is 2%; however, this number is highly dependent on the campaign's circumstances. A higher CTR indicates a successful campaign that is attracting customers, whereas a lower CTR indicates that something about the campaign is either discouraging customers or is not suitable for the intended audience. 3. Cost-per-Click Cost-per-click (CPC) refers to how much each click on an ad costs you. CPC is frequently used in well-targeted marketing campaigns, as the advertiser pays each time a viewer clicks on their ad. To calculate CPC: CPC = Total cost of clicks / Total number of clicks CPC assists with marketing budget management by revealing the cost of your brand's advertising efforts. If you have a very high CPC and a low conversion rate, your business may quickly be operating at a loss. 4. Conversion Rate Conversion rate measures the percentage of passive, prospective customers who become active, engaged customers. Conversion occurs when a customer completes the promoted call to action (e.g., placing an order, subscribing, etc.). To calculate conversion rate: Conversion Rate = Total conversions / Total number of sessions X 100 Your campaign is successful if it resonates with your target audience and persuades them to take the desired action, as indicated by a high conversion rate. 5. Return on Ad Spend Return on ad spend (ROAS) measures how much revenue an ad campaign generates relative to the cost of the campaign. To calculate ROAS: ROAS = Total ad revenue / Total ad costs ROAS provides information regarding profitability. Use it to determine which campaigns generate the most revenue and which are less successful. » Don't understand how to do ROAS calculations? See how Amazon ROAS is simplified 6. Advertising Cost of Sales Advertising Cost of Sales (ACos) is an Amazon-specific metric that measures the performance and success of pay-per-click (PPC) advertising campaigns related to Amazon Sponsored Products. ACos employs the same metrics as ROAS, but it is represented differently. To calculate ACos: ACos = Total ad costs / Total ad revenue X 100 This is the inverse of ROAS and represents an increase in percentage. A good Amazon ACoS is contingent on a number of factors, such as the type of business and industry. Nonetheless, avoid analyzing ACos on its own. Think about your profit margins and break-even points as well. » Not sure where to get Amazon sales data? Follow these steps 7. Total Advertising Cost of Sales Total Advertising Cost of Sales (TACoS) is similar to ROAS and ACoS, in that it also demonstrates the success of a marketing campaign, but it shows how a campaign affects your entire business (including organic traffic) and not just direct ad revenue. To calculate TACoS: TACoS = Total ad costs / Total revenue X 100 This metric can help you determine how your campaigns affect your company's overall revenue growth and whether or not you remain profitable after advertising. » Struggling to track your Amazon sales? Learn how Google Analytics can help Track Marketing Metrics With Amazon Advertising & Reports Amazon makes it easy to track these metrics in a single location through its advertising reports including Amazon DSP, Sponsored brands, video ads, and more. The ability to interpret Amazon advertising reports can provide numerous benefits for your business, including: A better understanding of audiences: Ad metrics can help you understand your customers' preferences and structure your future business accordingly.Ability to prove advertising impact: Assess your campaigns' effectiveness. Then, invest in successful campaigns and stop unsuccessful ones.Optimization of marketing strategies: Campaigns can be refined for the future to deliver even better results. » Find out what ad trackers are and how you can use them in e-commerce Track and Analyze Your Data With BeProfit Marketing activities, performance, customers, and revenue are all interconnected. Understanding these relationships will assist you in making informed decisions regarding your Amazon platform. Rather than a generic ad spend tracker, consider investing in an all-in-one analytics dashboard to monitor your company's expenses and profits if tracking and analyzing this data seems complicated. However, keep in mind that not all profit calculators are accurate; the best profit calculators for Amazon take all relevant factors into consideration. The BeProfit app offers e-commerce sellers insights that enable them to understand and scale their businesses. The app allows you to connect all your stores, allowing you to obtain a comprehensive view of your business operations.
BusinessWhat Are Ad Trackers & How Can You Use Them in E-Commerce?Imagine you're out fishing, and another fisherman walks past with a bucket full of fish—your bucket is empty. You ask him where he was standing, and he tells you on the other side of the dam, between the bushes and knee-deep in water. That is essentially how an ad tracker works—by giving you practical insights into your e-commerce ad campaigns so that you can tweak them and get more reach (or fish). What Is Tracked With an Ad Tracker? Depending on the ad tracker you choose, different metrics and marketing channels are tracked. The data collected is then used to increase customer engagement and, in turn, optimize your return on investments and provide good ROAS for e-commerce. Do note that an ad tracker shouldn't be confused with an ad spend tracker. These are some of the metrics that are tracked: The number of views on your ad campaign—how many people saw your adThe average amount of time the users spent viewing your adThe user's interaction with the ad—views, impressions, clicks The number of clicks on your call to action, taking users to your website Types of Ad Trackers There are many different ad trackers, but these are the main types you'll find on the market today: Conversion tracker This tracker measures the media performance according to your ad's key performance indicators. If you have conversion trackers on your page, you'll also be able to track the bottom of the funnel.Cookies Cookies are used to retarget audiences that have started and abandoned sales before completing the process. They track the user's behavior at all points in the conversion process.Impression tracker While your page is loading, pixels inform the analytics platform about any user activity taking place. The loading "traffic" tells you how well your ads are performing.Tracking URL This is one of the most effective (impression) tracking methods. It is best suited for PPC, website ads, and email marketing. The UTM or Urchin Tracking Module tag is added to the URL of your website, webpage, or landing page, and then helps track your ad campaign's performance over all your online platforms.Viewability tracker A tracker gets inserted into your ad during rendering. The tag is then used to give you metrics that tell you how often your ad's impressions were viewable.Click and engagement tracker The click tracking metrics will tell you how interested your audience was in your ads and how they reacted. Using these can help you get to know how Tiktok ads work, as well as Snapchat ads to further boost sales. » Discover the top 7 Amazon marketing metrics you should track Benefits of Ad Tracking Let's go back to your fishing expedition. You could stand at the same pond the whole day and not catch a single fish. Or, you could listen to the other fisherman's insights about positioning and go home with supper for the family. Ad tracking gives you that kind of insider information, making it crucial to your business and bottom line. Here are some more ways that ad tracking can ensure your e-commerce ads are effective: Streamlining You get to know your audience better. This, in turn, helps you streamline your ad campaigns instead of using the "spray and pray" methodology.Engagement You increase engagement with your targeted users because you know what they want and how they react to your different e-commerce platforms. In other words, you give them a relevant ad experience, promoting more engagement.Return on investment When your ad campaigns are streamlined, and your target audience is engaged, you'll get more conversions and an improved return on investment. Why You Should Use an Ad Tracker An ad tracker is, quite frankly, a must-have for every e-commerce business, full stop. Not using an ad tracker can be compared to buying one of the most sophisticated computers on the market and then simply putting it in a display cabinet for everyone to see. That computer can do so much more for you once you've plugged it in and switched it on, and the same applies to ad trackers. The functionality of an ad tracker gives you valuable insights into your target market that you can use to shape and mold your e-commerce advertising campaigns. This will make future advertising campaigns sharper and more targeted, which will, in turn, boost your sales and conversions and play a significant role in the future success of your business.
MarketingEmail Marketing Best Practices—How to Improve Your ROIEmail marketing takes some skill – if you aren’t doing it right, you actually may be doing more harm than good. Of course, it doesn’t take a computer genius to figure out what it takes to be a successful email marketer. What’s the secret to B2C marketing? Join us as we take a deep dive into the world of email marketing best practices, just below. Not sure if your business focus should be B2C or B2B? Read our guide to the four main types of e-commerce business models. Different Types of B2C Email Marketing Campaigns The first step to developing a successful B2C email marketing campaign (EMK for short) is to decide on which type of EMK is best fit for your intended audience and specific goals. Are you looking to resolve online shopping cart abandonment? Trying to up-sell by targeting first-time customers? Are you asking for feedback from your regular customers? Maybe you just want to stay in touch with your customers so they don’t forget about you! Whatever the reason or audience is for your B2C email marketing campaign, there’s a type of EMK that will fit your needs and goals. Here are just a few examples: Newsletter A key characteristic of a successful SEO strategy is to create a blog and publish articles on a consistent basis. While the targeting of keywords will help improve your search engine rankings, that’s not the only way for you to use your unique content. Keep your customers engaged with your website by drawing them in with weekly, bi-weekly, or monthly newsletters that provide a summary of your recent blog articles. There’s really no rule or limit as to the type of newsletters you can potentially send out – find creative ways to give your readers a reason to stay tuned for the next newsletter. Ideally, a continuous interest in what you have to say will eventually turn those readers into repeat customers. Cart Abandonment The issue of online shopping cart abandonment in the e-commerce industry is one that all online sellers should pay serious attention to. Why? Because close to 90% of all online shopping orders worldwide were abandoned in March 2020, which makes it clear how important it is for online businesses to tackle this problem head-on. Cart abandonment emails might seem like a somewhat passive way of reaching out to clients, but they’re actually a remarkably effective way of bringing ‘abandoners’ back to complete their purchases. In fact, more than 40% of cart abandonment emails are opened, and more than 8% of abandoners end up making the buy. Cart abandonment might be unavoidable, but it can be addressed by using B2C email marketing. More than 40% of cart abandonment emails are opened, and more than 8% of abandoners end up making the buy. Cart abandonment might be unavoidable, but it can be addressed by using B2C email marketing. —Click to tweet Loyalty Program If publishing newsletters isn’t the way you want to go, creating a loyalty program can be an alternative way of using business email lists to keep customers coming back to your online store. This email strategy makes use of the classic principle of ‘you scratch my back and I scratch yours’. Try sending email alerts to your current regular customers giving them unique coupon codes (which will also make them feel special!). To encourage your first-time or not-so-regular customers to come back again and become regular shoppers, you can send emails informing them of your store’s loyalty program. Or, you can give them a ‘sample’ discount and tell them the discount is higher for return customers. Again, creativity is a powerful tool when it comes to B2C email marketing! Announcements Introducing a new product to your store? Bringing back a classic item that everyone loved? Launching a brand new feature to make the user experience more exciting? Whatever the announcement is, it’s almost always a good excuse to reach out to your customers and keep them in the loop. Granted, you don’t want to make a mountain out of every mole hill your business comes across – be somewhat selective. Ultimately, the goal of announcement emails is to share some energy with your customers and draw them in to take part in this “new and exciting” event taking place on your website. Your business email lists can be split up so that you can test different sorts of announcements to see which get the best engagement. Sales Make the customers on your business email lists eager for your next email by making special sales part of what they can expect to get from your online store. You can launch season-ending sales campaigns that will help you empty your inventory of items that won’t be in demand the next season. Make the most of holidays. And, of course, be prepared for Black Friday! Another way that using sales can be incorporated into your email marketing best practices is to raise your prices a bit and then offer an exclusive sale for a limited time to encourage your customers to purchase some of your more profitable items. This isn’t to ‘trick’ the customer – the products should be priced fairly so as not to be taking advantage of anybody. But there are ways to weave sales into your business’s broader emailing marketing and pricing strategies. Personalized emails Who doesn’t enjoy feeling like a VIP? Thanks to the power of technology, you can make your customers feel special with very little effort. There are plenty of apps and plugins you can add to your online store and use to pull customer data such as names, birthdates, locations, device use, and much more. With that data, you can create B2C email campaigns that have a personal touch to them. Address customers by their first name to sound more friendly. Automatically send out happy birthday promotions to put a smile on your customers’ faces. Target certain products for customers in specific geographic locations to increase sales (e.g. swimsuits for customers in Florida, winter gear for customers in the Mid-West, etc.). As with the other email marketing best practices, personalized emails depend on a fair bit of creativity to really pack a punch. Don’t be afraid to try something new. Prioritize Email Marketing for Better ROI Business email lists and B2C email campaigns aren’t the only ways to market your e-commerce business (far from it!). Other e-commerce advertising strategies include: Pay per click (PPC)Affiliate marketingSocial media marketingContent marketingEtc. So why all the fuss about email marketing? It turns out that email marketing has continued to rank as the most cost-effective form of digital marketing for quite some time, with a median ROI of roughly 122%. That’s an impressive figure, particularly when you consider the fact that no other form of digital marketing has such a high return on investment. These stats serve as a pretty clear reason for you to prioritize email marketing! Yes, a diversified marketing strategy will work best – but just make sure that you don’t underestimate the importance of keeping emails as a key component. Note: If your email marketing strategy is working well, but you need some extra cash to get started with a new e-commerce marketing strategy, consider using an e-commerce business loan to bridge the financial gap. E-commerce businesses have had a notoriously difficult time finding funding in the past, but BeProfit's online lending marketplace is changing that. » Find out 4 ways to increase your marketing ROI with dynamic pricing Analyze Data of Email Marketing Campaigns Having tons of data about your customers and the performance of your B2C email campaigns doesn’t serve much of a purpose unless you learn how to analyze that data to come up with useful insights. What are ‘useful insights’? Any patterns that you find in the way that your customers engage with your email campaigns that can ultimately be used to improve that engagement. Okay, that’s a little vague – let’s use an example to make this point more concrete. Let’s say you’ve sent out a number of emails to your customers over the past few weeks, and you notice that the highest open rates for all emails were among customers between the ages of 25 and 35 years. You can use that insight in several ways – for one, you can create different email templates to draw more engagement from customers in older age groups in order to increase their open rates. On the other hand, you could seek out ways to further capitalize on the high email open rates you already have – perhaps by adding special offers for products more targeted at younger customers. The bottom line: If your goal is to create the best email marketing campaigns you possibly can, then analyzing data from your EMKs is an absolutely essential part of the process! Klaviyo is a great example of an Email Marketing platform that takes analytics seriously. Its proprietary data analytics software makes use of machine learning to provide statistics with accurate predictive insights; metrics include predicted date of next purchase, number of upcoming purchases, CLV calculations, average time between orders, probability of churn, and more. Responsive Email Marketing Responsive email marketing is a simple idea – your emails should include a special form of coding that will allow it to display properly across all sorts of devices. After all, nobody likes to open an email and have to play around with the zooming, or read paragraphs that are broken up into weird pieces, and so on. The visual attractiveness of an email (or lack thereof) may sound like a petty way to make a decision to give business to a company, but more than 1-in-5 people say their biggest turnoff with mobile email is when emails are poorly formatted. Combine that with the fact that more than half (60%) of all email opens are made on a mobile device or tablet, and it becomes very clear why responsive email marketing is crucial. Customer-Centric Email Marketing A customer-centric approach to email marketing is one that is characterized by a focus on the defining traits of the customer(s) and what makes them unique. From that humanistic perspective, marketing teams then try to find the best ways to engage with customers through emails based on those defining traits. For example, emails make be different for iPhone users as opposed to predominantly desktop-using customers. Or the tone or CTA in the email may differ depending on the customer’s age group. Other parts of the customer-centric approach to email marketing include: Giving customers the ability to customize the types of emails they will receiveAllowing customers to choose the frequency at which they receive emails from youProviding customers with the ability to respond to your emails with questions or commentsAnd so on The customer-centric approach is contrasted with the content-centric approach to email marketing which emphasizes a focus on the emails themselves as well as metrics such as the number of email recipients, open rates, click rates and so on. Both types of email marketing campaigns are useful in their own right, so it’s best to think critically about how each strategy matches with your audience, your business type, and your broader business goals. Email Marketing Tips In case you missed any details above, we wrap things up for you nicely with this short-and-sweet list of email marketing best practices. Scroll down and have a look! 1. Emphasize a Sense of Urgency It’s always good to keep your customers feeling that the clock is ticking and time is running short. Try encouraging them to purchase when you have limited stock, or have the sale last only for a given period of time, or even make a one-time offer such as a discount on any item in your store for example. The important thing is that your customers understand that your great deals will only be available to them for a set amount of time – and that time is running lower by the minute! 2. Try Not to Use ‘No-Reply’ in Your Business’s Outbound Email Address Don’t get confused, you can still ask your customers not to reply to those emails. The point here is that when customers see an email in their inbox, they’ll see your company name or even a representative’s name. When customers see ‘no-reply’, it can create a sense of distance and coldness as if they’re not important enough for you to hear their reply. Avoid this bad practice. 3. Keep the Typeface in Your Emails Consistent Part of establishing a brand is consistency. Sometimes, a company’s font can become so iconic that the script can say something different but the shape of the letters will still remind customers of the company. Think about companies like Disney, Netflix, Adidas, Facebook, and so on. The same concept can and should be applied to your B2C email campaigns – choose a font that fits your liking and stick to it. Try not to stray too far from the base font by messing around with italics, boldness, or size too much. 4. Finish Your Emails With a Signature Even for the most popular, big-name, recognizable companies, signing an email is a standard procedure. It could be signed by a representative’s name or even just your company name and the word ‘team’ (for example here we sign some of our emails as ‘Team BeProfit’). Including some sort of signature is better than nothing at all – receiving an email from an unspecified person or group may raise some suspicions for online shoppers and cause them to avoid doing business with your online store. 5. Run a Quick Test Before Sending Emails Out Don’t get caught in a sticky situation as a result of laziness. It takes a simple matter of minutes to forward a copy of your proposed email marketing campaign to a friend or business associate for review prior to distributing to real customers. Check that your friend or coworker can quickly identify the call to action in the email. If they can, then you’re in good shape. If not, keep making adjustments until you get where you need to be. You’ve Got Mail Or at least your customers do! Email may be one of the oldest forms of online communication, but that hasn’t made it any less effective as a form of marketing. It’s never too late – get started with email marketing best practices today and use the information above to keep your B2C email campaigns on the right track. Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.