Ecommerce metrics, tactics and strategies Here in Veeqo we try hard to look at things systematically and only produce functionality in a methodical way. The way which leads our customers to their success. We don’t keep the data just in case - every pieces of information is building up into useful metric in order to implement clever tactics. This is how the strategy appears. Inventory strategy Costs associated with purchases Costs associated with sales Delivery times Metric Metric Sold to purchased products mapping Metric Products sold Optimization tactic Product purchased Optimization tactic Metric Key inventory management metrics Metric Formula Meaning Gross Margin Return on investment (GMROI) = Gross margin / Average inventory cost Measures inventory profitability Inventory Turnover Ratio = Cost of Goods Sold (COGS) ÷ Average Inventory Shows how many times inventory was repeatedly sold and replaced over a period of time Average Days To Sell Inventory =(Average Inventory ÷ Cost of Goods Sold) x 365 Same aspect expressed in days Inventory-to-sales ratio = Average Inventory Value / Net Sales Indicates how much money you are investing in inventory to generate your sales over a period of time Sell-Through Rate = Units Sold / Beginning Inventory x 100 Illustrates how quickly you are selling your products Tactics around <Gross Margin Return on investment> Optimise margin against sales volumes. Low sales numbers should not be accompanied with low margin Gross Margin Return on investment (GMROI) = Gross margin / Average inventory cost Tactics around <Inventory Turnover Ratio> Products with simple supply logistics should turn fast. Complex international products may take time in turning Inventory Turnover Ratio = Cost of Goods Sold (COGS) ÷ Average Inventory Tactics around <Average Days To Sell Inventory> Low margin products should move fast. High margin may take time to sell. Average Days To Sell Inventory = (Average Inventory ÷ Cost of Goods Sold) x 365 Tactics around <Inventory-to-sales ratio> Maximise return on investments Inventory-to-sales ratio = Average Inventory Value / Net Sales Tactics around <Sell-Through Rate> Guarantee stock availability Sell-Through Rate = Units Sold / Beginning Inventory x 100
