7 Key Metrics for C2B E-Commerce Success: Track and Optimize Your Online Business

Welcome to the world of C2B E-Commerce! Being a serial entrepreneur, I have always been fascinated with the latest trends in the industry. As the world moves towards online shopping, understanding the top KPI metrics for your C2B E-Commerce business can be a game-changer. By measuring and tracking these KPIs, you can make informed decisions and optimize your online business's performance to ensure it keeps growing. In this article, we will dive into the top seven C2B E-Commerce business KPI metrics and how to track and calculate them.

• Number of items purchased from individuals: This KPI signifies the number of units sold from individuals to the business. The higher the number, the more successful your business is in the C2B E-Commerce industry.

In the highly competitive online marketplace, it is challenging to analyze what makes a thriving E-Commerce business. Is it the average selling price of items in retail store, number of returning customers, or percentage of items sold at full price? The answer is all of them! Each KPI plays a vital role in determining your E-Commerce business's success.

• Average time between item purchase and sale: This KPI indicates the time it takes for a product to sell after purchasing. The shorter the time, the higher the demand for the product and the more successful your business.

Hence, it is crucial to track these KPIs regularly to identify any weaknesses in your business operations and rectify them. But, that's not all! There are four more KPIs that every E-Commerce business owner should track to achieve success. Stay tuned for more!

1. Number of items purchased from individuals

Definition: The Number of items purchased from individuals KPI measures the total number of unique items purchased from individual sellers or suppliers within a given time period. This KPI is applicable to C2B e-commerce businesses that operate in markets with a large number of small-scale sellers.

Use Case: The Number of items purchased from individuals KPI is used to gauge the popularity of a C2B e-commerce platform among individual sellers. This KPI helps businesses identify trends in the buying patterns of individual sellers, which assists in developing strategies to acquire more sellers and expand the product catalog.

How To Calculate KPI: To calculate the Number of items purchased from individuals KPI, use the formula:

Calculation Example: If a C2B e-commerce platform recorded 5,000 unique items purchased from individual sellers in a given month and 20,000 transactions took place, the Number of items purchased from individuals KPI would be:

KPI Advantages:

• Helps businesses understand the nature of transactions on the platform.
• Assists in identifying the most popular categories of products sold by individual sellers, which helps in developing focus areas for the platform.
• Allows businesses to measure the success of campaigns aimed at promoting sales among individual sellers.

KPI Disadvantages:

• Does not represent the profitability of the business.
• Not applicable to all C2B e-commerce businesses.
• Can be affected by factors such as seller participation rates, competition and seasonality.

KPI Industry Benchmarks: The Number of items purchased from individuals KPI is dependent on the nature of the C2B e-commerce business and the market it operates in. Thus, there is no established benchmark for this KPI.

Top Seven C2B E-Commerce Business KPI Metrics. How to Track and Calculate

Average selling price of items in retail store:

• Helps retailers understand the pricing strategy of their products
• Enables retailers to make informed decisions about their product mix
• Maximizes profitability by ensuring products are priced effectively

• Does not consider the cost of goods sold or operational expenses
• Can be misleading if the product mix is not analyzed

Number of Returning Customers

Definition:

The number of returning customers is a KPI that measures the percentage of customers that purchase from your e-commerce business more than once. It is calculated by dividing the number of returning customers by the total number of unique customers and multiplying by 100.

Use Case:

The number of returning customers is an important KPI for any e-commerce business as it indicates how successful your business is at retaining customers. A high percentage of returning customers is a sign of customer loyalty and satisfaction, which can lead to increased revenue and profitability.

How To Calculate KPI:

To calculate the number of returning customers, use the following formula:

Calculation Example:

Suppose your e-commerce business had 500 unique customers in the past year, and 100 of those customers made more than one purchase. To calculate the number of returning customers KPI, use the following formula:

Therefore, the number of returning customers for your e-commerce business is 20%.

KPI Advantages:

• Indicates customer loyalty and satisfaction
• Helps identify customer retention strategies that are working
• Can lead to increased revenue and profitability

KPI Disadvantages:

• Does not measure the quality of returning customers (i.e. if they are low-value customers)
• Does not account for new customers that may become loyal in the future
• May not be as relevant for businesses that have a high seasonal turnover rate

KPI Industry Benchmarks:

The number of returning customers varies by industry, but the average percentage of returning customers is around 25-30%. However, some industries, such as fashion and beauty, may have higher percentages of returning customers due to the nature of their products.

4. Percentage of items sold at full price

Definition:

Percentage of items sold at full price is a KPI metric used to determine the ratio of products sold at their regular price to the total number of products sold, without any discount or offer.

Use Case:

This KPI is important for measuring the effectiveness of pricing strategies and identifying if customers are willing to pay the full price for a product, or if there is a need to offer frequent discounts to increase sales.

How To Calculate KPI:

To calculate the percentage of items sold at full price, divide the number of items sold at the full price by the total number of items sold and multiply by 100.

Calculation Example:

Suppose a company sold 500 products in a month, including 100 products at full price and the rest with a discount. Using the formula above, the percentage of items sold at full price would be:

KPI Advantages:

• Helps to measure the effectiveness of pricing strategies and find out if the price is too high or too low
• Assists in identifying if the target audience is willing to pay the full price or if there is a need to continuously offer discounts to boost sales

KPI Disadvantages:

• Does not provide information about the profitability of each item sold
• Does not represent the overall performance of the company

KPI Industry Benchmarks:

According to the latest industry research report, the average percentage of items sold at full price for e-commerce companies should be around 25%. However, this number may vary depending on the type of product, industry, and target market.

5. Average time between item purchase and sale

As an e-commerce business owner, it is important for you to measure the average time between an item being purchased and sold. This key performance indicator (KPI) can be useful in determining inventory management and forecasting sales.

Definition

The average time between item purchase and sale measures the time that elapses between a customer purchasing an item and when the same item is sold by your e-commerce business.

Use Case

An e-commerce business can use this KPI to understand how long its inventory sits before it is sold. This information can be used to optimize inventory management and reduce carrying costs for unsold products.

How To Calculate KPI

To calculate the average time between item purchase and sale, you need to divide the total number of days between item purchase and sale by the total number of units sold.

Calculation Example

Suppose that your e-commerce business sells 100 units of product A in a month. The total number of days between item purchase and sale for these units is 200 days. Then:

Therefore, the average time between item purchase and sale for product A is 2 days.

KPI Advantages

• Provides insight into inventory management
• Helps forecast sales
• Can reduce carrying costs for unsold products

KPI Disadvantages

• Does not account for out-of-stock situations
• May not be relevant for businesses with very short or long selling cycles
• May not be a reliable indicator of future sales performance

KPI Industry Benchmarks

The average time between item purchase and sale can vary widely across different industries and products. However, some general benchmarks include:

• Food and beverage: 1-3 days
• Clothing and apparel: 3-5 days
• Electronics: 5-7 days

6. Number of positive seller reviews

Definition

The number of positive seller reviews is a KPI metric used in e-commerce businesses to measure the number of positive reviews received by a seller on their products or services.

Use Case

This KPI is important as it helps to establish the credibility and trustworthiness of a seller on an e-commerce platform. A higher number of positive reviews can act as a significant factor in driving sales for a seller.

How To Calculate KPI

To calculate the number of positive seller reviews, first, count all the positive reviews received by a seller on their products or services. Next, divide the total count of positive reviews by the total count of reviews received by the seller, and then multiply by 100 to get the percentage of positive seller reviews.

Calculation Example

Suppose a seller has received a total of 100 reviews, out of which 80 are positive. To calculate the number of positive seller reviews, divide the total positive reviews by the total reviews received, and then multiply by 100, as shown below:

KPI Advantages

• Establishes credibility and trustworthiness of a seller
• Helps to drive sales by acting as a significant factor in the purchasing decision of a buyer
• Enables sellers to monitor and improve their performance by identifying areas for improvement and addressing negative reviews

KPI Disadvantages

• Can be vulnerable to fake reviews and bias
• May not be reliable if the sample size is small
• Does not take into account the frequency of reviews

KPI Industry Benchmarks

The industry benchmarks for the number of positive seller reviews vary by platform and industry. However, on average, a positive seller review percentage of 80% or higher is considered to be good in the e-commerce industry.

7. Gross profit margin on resold items

Definition

Gross profit margin on resold items is a C2B e-commerce KPI that measures the profitability of items resold by an e-commerce platform. It represents the difference between the selling price of the product and the cost of that product.

Use Case

This KPI helps e-commerce companies to assess their profitability. It also helps them to determine whether they are pricing their resold items correctly and if they need to adjust their pricing to maintain profitability.

How To Calculate KPI

You can calculate the gross profit margin on resold items by using the following formula:

Calculation Example

Suppose that the total selling price of the resold items on your e-commerce platform is $10,000, and the total cost of those items is $5,000. The gross profit margin on resold items for your business would be:

• Selling Price - Cost of Goods Sold = $10,000 - $5,000 = $5,000
• Gross Profit Margin = ($5,000 / $10,000) x 100 = 50%

KPI Advantages

• Helps to identify pricing issues that may affect profitability;
• Enables an assessment of the overall profitability of the e-commerce business;
• Allows for insight into how the business compares to industry benchmarks.

KPI Disadvantages

• Does not consider other factors that may affect profitability, such as marketing expenses;
• Does not take into account the overhead costs of running an e-commerce platform;
• Industry benchmarks may not accurately apply to the particular market in which the e-commerce business operates.

KPI Industry Benchmarks

The average gross profit margin on resold items in the e-commerce industry is approximately 40% - 50%. However, this can vary depending on the type of product or service being sold and the targeted audience.