Glossary of Terms

A high abandonment rate may indicate high friction in your web store's checkout process. However, since the average cart abandonment rate is between 60% to 80%, merchants should realize that abandoning shopping carts is now a normal way that consumers shop online.

The abandonment rate is calculated as the number of abandoned carts divided by all cart sessions within a given time period, expressed as a percentage.

Tells you what is the amount, on average, your customers are spending when they place an order in your web store.

AOV is calculated as Total Sales divided by Total Orders within a given time period.

Tells you what is the price-sensitivity of the customer.  You may have lots of high-priced items in your catalog.  But if the APP of your customers is significantly lower, then perhaps you should reconsider carrying inventory on items that are too expensive for your customers.

APP is calculated as Total Sales divided by Total Units purchased within a given time period.

The churn rate of your subscribers helps you determine the value of your offering.

The churn rate is calculated as the number of subscribers that have churned in the past 30 days divided by the number of active subscribers exactly 30 days ago, expressed as a percentage.

The conversion rate is a good measure of easy it is for customers to shop and checkout of your web store.  Use conversion rate as a KPI when A|B testing web forms.

Conversion Rate is calculated as the number of checkouts completed within the same web sesion divided by the total number of cart sessions within a given time period, expressed as a percentage.

1-time Buyer: These customers have exactly one purchase in their entire history.

Repeat: These customers have exactly two purchases with at least one day between each purchase.

Loyalist: These customers have three or more purchases with at least one day between each purchase.

Gross Margin is a way to benchmark Gross Margin of your web store against industry averages.

Gross Margin is calculated as Gross Profit divided by Net Sales, expressed as a percentage.

Gross Profit will tell you how much money your web store earned in a given time period.

Gross Profit is calculated as Net Sales - Total Cost Price of all Items Sold.

Gross sales gives you the amount of revenue attributed to just products purchased within a given time period.  It does not include shipping charges nor taxes.

Gross sales is calculated as Product Price times the number of units purchased in each Order, and then summed for all Orders placed within the given time period.

This amount is helpful for you to determine your monthly income from subscriptions.

MRR is calculated as the normalized monthly revenue of all subscriptions that are neither Cancelled nor Expired. It does not include one-time setup fees, nor sales tax. If shipping fees are charged each billing cycle, then they are included in the MRR calculation.

Net sales gives you the true amount of revenue attributed to just products purchased less discounts and returns within a given time period.  It does not include shipping charges nor taxes.

Net Sales is calculated as Gross Sales - Returns - Discounts.

Revenue per Visit tells you how much money is captured each time someone visits your web store, and is a good way of estimating the value of every site visit.

Revenue per Visits is calculated by dividing Total Sales within a given time period by the total number of visits to your web store within that same period.

The total amount of net revenue the customer has spent shopping in your web store since the beginning.

Total Lifetime Value is calculated as total amount of all of the customer's Orders substracted by the total amount of all of the customer's returned and credited Orders.

The net total count of all Orders the customer has completed in your web store since the beginning.

Total Lifetime Orders is calculated as the total count of all of the customer's Orders substracted by the total count of all of the customer's returned and credited Orders.

Total Sales gives you the true amount of revenue captured within a given time period.

Total Sales is calculated as Gross Sales + Taxes + Shipping charges - Discounts - Returns.

The total number of unique items within an Order.  For example, an Order with 5 bottles of the same vitamin counts as 1 total unique item.

An Order having extremely high Total Items compared to the Total Unique Items could indicate someone wanting to purchase your product in bulk with the intent to resell.