An ecommerce proforma should track several key metrics to help the brand understand its financial performance and make informed decisions. These metrics can include:
- Revenue: This is the total amount of money the brand brings in through sales. It is important to track this metric to understand the overall health of the business and to see how well the brand is performing compared to previous periods.
- Gross margin: This is the difference between the price at which the brand sells its products and the cost of the goods it sells. It is important to track this metric to understand how much profit the brand is making on each sale and to identify opportunities for cost savings.
- Customer acquisition cost (CAC): This is the total cost of acquiring a new customer, including marketing and sales expenses. It is important to track this metric to understand the efficiency of the brand’s customer acquisition efforts and to identify opportunities for improvement.
- Customer lifetime value (CLV): This is the projected revenue a customer will generate for the brand over the course of their relationship with the brand. It is important to track this metric to understand the value of each customer and to identify opportunities to retain and grow customer relationships.
- Conversion rate: This is the percentage of website visitors who make a purchase. It is important to track this metric to understand the effectiveness of the brand’s sales funnel and to identify opportunities for improvement.
- Average order value (AOV): This is the average amount that customers spend per order. It is important to track this metric to understand the value of each customer and to identify opportunities to increase AOV through upselling and cross-selling.
- Return on investment (ROI): This is the ratio of the brand’s profits to its costs. It is important to track this metric to understand the overall profitability of the brand and to identify opportunities for improvement.
- Operating expenses: This is the total cost of running the business, including rent, utilities, payroll, and other expenses. It is important to track this metric to understand the overall cost structure of the business and to identify opportunities for cost savings.
- Fulfillment costs: This is the cost of storing, packing, and shipping products to customers. It is important to track this metric to understand the efficiency of the brand’s fulfillment process and to identify opportunities for cost savings.
- Marketing costs: This is the cost of promoting the brand and its products, including advertising, content marketing, and social media marketing. It is important to track this metric to understand the efficiency of the brand’s marketing efforts and to identify opportunities for improvement.
- Technology costs: This is the cost of developing and maintaining the brand’s website and other technology platforms, such as ecommerce and customer relationship management (CRM) systems. It is important to track this metric to understand the efficiency of the brand’s technology investments and to identify opportunities for cost savings.
- Cash inflows: This is the money that comes into the business, including revenue from sales, investment income, and loans. It is important to track cash inflows to understand the sources of the business’s funds and to identify opportunities for growth.
- Cash outflows: This is the money that goes out of the business, including expenses such as payroll, rent, and taxes. It is important to track cash outflows to understand the business’s spending habits and to identify opportunities for cost savings.
- Net cashflow: This is the difference between the business’s cash inflows and outflows. It is important to track net cashflow to understand the overall health of the business’s finances and to identify potential issues with cashflow.
By tracking these key metrics, ecommerce brands can gain valuable insights into their financial performance and make informed decisions to drive growth and success.
