How to Use Data to Grow Your Ecommerce Business

Finding and analyzing sales data to grow your ecommerce business can be daunting; however, if you take small, actionable steps, it can quickly turn into a fun project. Understanding your numbers will help you take your business to the next level. Downloading your sales data is rather effortless: simply go to the reporting or analytics suite within your shopping cart and let the magic begin. Below are some key data points you should be looking at.

Best Selling Products

All online sellers should know what their best selling products are. If you cannot list your top 5 best selling products, it means you don't know your numbers and you should reevaluate how you're spending your time. Have you ever seen Shark Tank? Contestants that don't know their numbers get shunned. So download your sales data and get to work!You may find that your best selling products aren't what you thought they'd be, and that you're burning ad spend on products that don't convert. Demote the products that aren't selling, and focus on the 20% of your products that are producing 80% of your revenue.

Further, analyze which sales channels each product performs well on. For example, lets say you advertise 50 products across all channels and you find that only 3 products generate 90% of your revenue on Facebook. You currently spend $1,500 a month on Facebook ads across all 50 products. With this new information, you should be spending 80%+ of your monthly Facebook budget on the 3 products that actually sell.If you find that 6 products generate a majority of the revenue on your webstore, you should build landing pages, do more keyword research, and find ways to drive more traffic and increase conversion rates.Use data to your advantage.

Purchase Bundles

Do you know what combination of products are commonly purchased together? It should be easy to find this data in your shopping cart's reporting suite. Let's say you find that a USA t-shirt is frequently purchased with USA socks and and a USA hat. Offer these 3 products as a bundle at a slight discount to make it easier for consumers to purchase them together. This will increase your average order value (AOV), decrease your per order shipping costs, and keep your customers happy.

Advertising Cost of Sale

Advertising Cost of Sale (ACoS) is an important metric to track because it shows how much advertising spend it costs to generate a sale. ACoS should be factored into your profitability metrics. It will tell you if a product is worth burning advertising dollars on. For example, if a phone case sells for $20 with free shipping and your cost of goods sold (CoGS) is $8, plus another $5 for shipping, that leaves you with a profit margin of $7. If your ACoS is $6.50 per sale, you should reconsider how you're marketing this product or perhaps drop the product all together.

Profitability

It goes without saying that you should be tracking profitability. Not only is tracking profitability easy to do, taking action on the data can have profound results on your business. Focus on products that are profitable and eliminate those that are unprofitable .Here are a few profitability metrics you should be tracking:

       
• Profit per product
• Profit margin per product
• Profit per month/year
• Profit per category
• Profit per channel

Device Used for Purchase

Your Shopping Cart should provide you with data related to the device used for a purchase. If it doesn't, install your Google Analytics and Facebook Pixels into your shopping cart so that you can start tracking this data.Why do you want to know which device was used for a purchase? Because you may find that an overwhelming amount of customers are purchasing from an iPhone 8, in which case you should consider targeting your ads towards iPhone 8 users. Additionally, you should constantly be optimizing your mobile checkout experience.------Overall, you need to be in the know when it comes to your ecommerce sales data because it will help you to make more educated business decisions. Start tracking your data, and let us know how it helps you! If you found this article helpful, please subscribe to our newsletter below where we share actionable ecommerce tips weekly!