The numbers that matter.
WHAT PEOPLE MEASURE
Revenue. Which tells you almost nothing on its own.
WHAT TO MEASURE INSTEAD
Cost of goods Delivery cost, including failed deliveries Payment gateway fees Packaging Hosting and software Your own time
Subtract all of it from revenue.
THE COMMON DISCOVERY
A busy business making very little, because delivery is under-charged, or gateway fees eat a thin margin, or a popular product is barely profitable.
PER PRODUCT
Work out the margin on each product, not just overall. Frequently one line is subsidising another, and the busy one is the unprofitable one.
FAILED DELIVERIES
If ten per cent of cash-on-delivery orders are refused, that cost belongs on every such order.
PRICING
If the margin is too thin, raise prices or reduce costs. Volume does not fix an unprofitable unit.
REVIEWING
Quarterly. Costs change, particularly delivery and exchange-rate-linked inputs.
