E-commerce Glossary
30 essential definitions to run your e-commerce business
From AOV to ROAS, through LTV, CAC, and RFM. Clear definitions, concrete examples, practical formulas.
AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition CLV / LTV (Customer Lifetime Value)Total value a customer generates over their entire relationship.See definition COGS (Cost of Goods Sold)Direct cost of products sold, excluding marketing expenses.See definition Cohort AnalysisStudy of behavior patterns among customer groups acquired in the same period.See definition Contribution MarginMargin after deducting all variable costs per order.See definition Conversion RatePercentage of visitors who complete a purchase.See definition CPA (Cost Per Acquisition)Advertising cost to achieve a specific conversion.See definition CPC (Cost Per Click)Cost paid for each click on an advertisement.See definition CPM (Cost Per Mille)Cost per thousand ad impressions.See definition First-Order ProfitabilityAbility to be profitable from a customer's very first order.See definition Gross MarginPercentage of revenue remaining after COGS.See definition MER (Marketing Efficiency Ratio)Ratio of total revenue to total marketing spend.See definition Net MarginPercentage of final profit after all expenses.See definition Net RevenueRevenue after refunds, discounts, and returns.See definition POAS (Profit On Ad Spend)Profit generated per dollar spent on advertising.See definition Repeat Purchase RatePercentage of customers who make more than one purchase.See definition Retention RatePercentage of customers retained over a given period.See definition ROAS (Return On Ad Spend)Revenue generated per dollar spent on advertising.See definition RFM Segmentation (Recency, Frequency, Monetary)Customer classification based on purchasing behavior.See definition Server-Side TrackingData collection via the server instead of the browser.See definition First-Party DataData collected directly from your own customers.See definition AttributionMethod for crediting a conversion to marketing touchpoints.See definition Break-Even ROASMinimum ROAS needed to cover all costs with no profit or loss.See definition Payback PeriodTime needed to recoup a customer's acquisition cost.See definition Unit EconomicsProfitability analyzed at the level of a single customer or order.See definition
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