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 Gross RevenueTotal sales before any deductions (discounts, refunds, taxes). This is the revenue displayed by your CMS.See definition Net ProfitActual profit after deducting all costs: product, shipping, transaction, advertising, and operational.See definition Cart Abandonment RatePercentage of visitors who add a product to cart but do not complete the purchase.See definition Purchase FrequencyAverage number of orders placed per customer over a given period.See definition Marketing ROIReturn on investment of marketing spend. Measures the profit generated per dollar spent on marketing.See definition Product MarginDifference between the selling price and the cost price (COGS) of a product, expressed as a percentage.See definition Stock TurnoverNumber of times inventory is sold and replaced over a given period. A logistics efficiency indicator.See definition Customer LifespanAverage duration during which a customer remains active and makes purchases on your store.See definition Marketing AttributionMethod for crediting a conversion to the various marketing touchpoints involved.See definition Blended CPAAverage acquisition cost across all channels. Total marketing spend divided by the number of new customers.See definition Ad SpendTotal amount invested in paid advertising over a given period (Meta Ads, Google Ads, TikTok Ads, etc.).See definition Incremental RevenueAdditional revenue directly attributable to a specific marketing action.See definition Return RatePercentage of orders that result in a product return or refund.See definition Revenue Per VisitorAverage revenue generated by each unique visitor to your site.See definition Repeat Purchase RatePercentage of customers who make at least a second purchase after their first order.See definition Gross ProfitDifference between revenue and the cost of goods sold, a key indicator of gross margin.See definition EBITDAEarnings before interest, taxes, depreciation, and amortization, a measure of operational performance.See definition Customer EquityTotal discounted value of your entire customer base over their estimated lifetime.See definition Marketing Mix ModelingStatistical model measuring the contribution of each marketing channel to total sales.See definition Halo EffectIndirect impact of a campaign on products or channels not directly targeted.See definition Brand LiftMeasurable increase in awareness, consideration, or purchase intent following a campaign.See definition View-Through ConversionConversion attributed to an ad that was viewed but not clicked by the user.See definition Click-Through Rate (CTR)Percentage of users who click on an ad or link after seeing it.See definition Bounce RatePercentage of visitors who leave your site after viewing only one page without interaction.See definition Time on SiteAverage duration a visitor spends on your site during a session.See definition Pages Per SessionAverage number of pages viewed by a visitor during a session.See definition Session DurationTotal time spent by a visitor between entering and leaving the site.See definition Exit RatePercentage of visitors who leave your site from a specific page.See definition Micro-ConversionIntermediate action that signals visitor engagement without being the final purchase goal.See definition Macro-ConversionMain action representing the final goal of your site, typically a purchase.See definition Conversion FunnelSuccession of steps a visitor goes through from the first visit to the final purchase.See definition Upsell RatePercentage of customers who accept a higher-end product offer during the purchase process.See definition Cross-Sell RatePercentage of orders including multiple complementary products sold together.See definition Average Purchase ValueAverage amount spent by a customer in a single transaction or over a period.See definition Share of WalletPercentage of a customer's total category spend captured by your brand.See definition Customer ProfitabilityNet profit generated by an individual customer over their entire lifetime.See definition Win-Back RatePercentage of former inactive customers who make a new purchase after a reactivation campaign.See definition Customer Engagement ScoreComposite score that reflects the level of interaction and loyalty of a customer with your brand.See definition Net Promoter Score (NPS)Recommendation indicator measuring the likelihood that your customers will recommend your brand.See definition Customer Satisfaction Score (CSAT)Direct measure of a customer's satisfaction after an interaction or a purchase.See definition Inventory TurnoverNumber of times your stock is fully sold and replenished over a given period.See definition Dead StockStock of products that no longer sell for a long time and immobilize capital.See definition Safety StockBuffer stock quantity maintained to avoid stockouts in case of unexpected demand or supplier delay.See definition Reorder PointStock level at which you must place a new supplier order to avoid stockout.See definition Fulfillment RatePercentage of orders delivered complete, on time, and without incident compared to total orders.See definition Customer Acquisition Cost (CAC)Customer Acquisition Cost (CAC) is the total expense required to acquire a new customer, including all marketing and sales costs. It is a critical metric for measuring e-commerce profitability.See definition E-commerce conversion rateThe e-commerce conversion rate measures the percentage of website visitors who complete a purchase. A critical KPI for online stores, the average rate typically falls between 2% and 3%.See definition Average e-commerce marginThe average e-commerce margin measures the percentage of profit retained after deducting direct costs across all online sales.See definition E-commerce bounce rateThe e-commerce bounce rate measures the percentage of visitors who leave the site after viewing only one page, without any further interaction.See definition Cost of Goods Sold (COGS)Cost of goods sold (COGS) is the total of all direct and indirect costs required to produce, deliver, and sell a product. It is essential for calculating true net margin in e-commerce.See definition E-commerce attributionE-commerce attribution identifies which marketing channels (SEO, ads, email, social) contributed to a conversion, enabling smarter budget allocation.See definition E-commerce inventory managementE-commerce inventory management involves controlling stock levels to prevent stockouts and overstock, optimizing cash flow and customer satisfaction.See definition E-commerce logistics costE-commerce logistics cost covers all expenses related to warehousing, order preparation and delivery, typically representing 10 to 20% of revenue.See definition Average basket valueAverage basket value represents the mean value of an order placed on your online store. It is calculated by dividing total revenue by the number of orders over a given period.See definition Cart Abandonment RateThe cart abandonment rate measures the percentage of visitors who add a product to their cart but leave without completing their purchase.See definition Markup rateThe markup rate measures the share of gross margin within the selling price excluding tax. Expressed as a percentage, it helps evaluate the commercial profitability of a product or an e-commerce business.See definition Profit margin rateThe profit margin rate measures the percentage of gain relative to the purchase cost excluding tax. It evaluates product profitability by comparing gross margin to the acquisition price.See definition Markup coefficientThe markup coefficient is the ratio between the final selling price (including tax) and the purchase cost (excluding tax). It allows merchants to determine the selling price in a single calculation.See definition
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