Most vendors check one number: how much came in. It is the least useful figure available, because it says nothing about whether the business is working. A handful of other numbers, reviewed monthly, tell you what to change.
Revenue is not the number that matters
Revenue tells you how much money passed through. It does not tell you what you kept.
Two vendors with identical revenue can be in completely different positions: one selling high-margin goods with few returns, the other selling low-margin goods with heavy delivery costs and a steady trickle of refunds.
Start instead with contribution per order: selling price, minus unit cost, minus commission, minus payment fees, minus any delivery you absorbed. That figure, totalled across a month, is what the business actually produced.
Know your per-product margin
Aggregate figures hide the important detail. Almost every vendor has products that make good money and products that quietly lose it, and without per-product margin they cannot tell which is which.
For each line, work out what you keep per unit sold. Then look at the combination of margin and volume.
A product with thin margin and high volume may be worth keeping if it brings customers who buy other things. A product with thin margin and low volume is occupying capital and attention for nothing.
This analysis routinely surprises people. The best-selling item is frequently not the most profitable one.
Conversion: views against orders
If your platform shows how many people viewed a listing, compare that to how many ordered. The ratio diagnoses different problems than sales figures alone.
Many views, few orders. People are finding the listing and deciding against it. The likely causes are price, unclear or incomplete description, weak photographs, visible delivery cost, or no stock. The product has demand; the listing is failing to close.
Few views, reasonable conversion. People who find it buy it, but not enough find it. This is a title and discoverability problem, not a product problem.
Few views, few orders. Either no demand, or the listing is invisible. Check the title first, since that is free to fix, before concluding the product does not sell.
This single comparison directs your effort more efficiently than any other number.
Average order value
Track what a typical order is worth. Raising it is usually easier than finding more customers, and it improves your economics directly, because fixed per-order costs are spread across more value.
Practical ways to raise it include bundling related items, setting free delivery above a threshold slightly higher than your current average, and stocking the accessories that naturally accompany your main products.
Watch whether it drifts down over time, which can indicate you are attracting more bargain-focused buyers than before.
Return rate, by product
Track returns as a proportion of orders, and track it per product rather than overall.
An overall rate hides the fact that one line is generating most of the problem. Once you see it per product, the cause is usually obvious: a listing that oversells, a size that is misjudged, an item that ships badly, or a supplier with quality issues.
A product with an unusually high return rate may be unprofitable even at a healthy headline margin, once return delivery and handling are counted.
Stock turnover
How many times a year does a given product sell through and get replaced?
Fast turnover means capital recycling quickly, which is what allows a small operation to grow without additional funding. Slow turnover means money sitting still.
A lower-margin product that turns over many times a year can generate more actual profit than a higher-margin product that sells twice. Margin alone is not the measure; margin multiplied by turnover is.
Identify your slowest lines and decide deliberately whether to fix them or clear them.
Dispatch performance
Measure how long you actually take to dispatch, not how long you intend to take.
Most vendors believe they are faster than they are. Recording the gap between order and dispatch shows the truth, and it is the number most directly tied to feedback and repeat business.
If your average dispatch time exceeds what your listings promise, either improve the process or change the promise. Promising what you do not deliver costs more than promising less.
Where the money went
Separate your costs into categories and look at the proportions: stock purchases, commission, payment fees, delivery, packaging, returns.
Doing this once often reveals a cost that has quietly grown out of proportion. Delivery is the usual culprit, particularly for vendors offering free delivery without recalculating as their product mix changed.
A workable monthly routine
Set aside an hour a month and go through five things:
- Total contribution, not revenue
- Margin per product, flagging anything below your threshold
- Views against orders on your main listings
- Return rate per product
- Any line that has not sold at all
Then take one action from each: reprice something, rewrite a title, improve a listing’s photographs, raise a supplier issue, clear something dead.
One hour and five small actions a month compounds into a materially different business over a year.
Record as you go
None of this works retrospectively. You cannot calculate per-order contribution months later from memory.
Record at the point of each order: date, product, selling price, unit cost, fees deducted, delivery cost you bore, amount settled, and outcome. A minute per order.
That habit is the difference between running a business and hoping one is happening.
Review your figures for the last three months on your Endinov storefront and identify the one product you should stop stocking.
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