Boost Your Wholesale Ecommerce Success with These 7 Essential KPIs

Welcome, fellow entrepreneurs!

In today's fast-paced world, it is more important than ever to have a strong ecommerce strategy. One of the most important components of that strategy is tracking the right KPIs to ensure your business is on track for success. Today, we will be discussing the top seven wholesale ecommerce KPI metrics that every business owner should be tracking.

• Number of registered retailers on the platform - This KPI is crucial for understanding the growth of your platform over time and the potential customer base.
• Average commission fee earned per transaction - This KPI represents the amount of money your business is making per transaction and can indicate areas for improvement.
• Number of products offered on the platform - This KPI is a great indicator of your platform's scope and the variety of products available to your customers.

By tracking these core KPIs, you can gain a solid understanding of how your business is performing and what areas you should focus on for growth. So, let's dive into the details:

Number of registered retailers on the platform

In the world of wholesale eCommerce, one of the most important key performance indicators (KPIs) is the number of registered retailers on the platform. This KPI is used to measure the success of a platform in attracting and retaining retailers. In this chapter, we will explore the definition, use case, and calculation of this KPI. We will also look at the advantages and disadvantages of using it and the industry benchmarks associated with it.

Definition

The number of registered retailers on the platform is a KPI that measures the total number of retailers who have registered on the platform. This includes both active and inactive retailers. This KPI is important, as it gives platform owners an idea of the number of retailers who are interested in their product. This KPI can help platform owners grow their customer base, increase their revenue, and improve their customer relationship.

Use Case

The number of registered retailers on the platform KPI is widely used in the eCommerce industry. It can be used to track the growth of a platform, help platform owners determine areas of improvement, and make strategic decisions. For example, if the number of registered retailers is not increasing, platform owners can determine why and plan accordingly.

How To Calculate KPI

The formula for calculating the number of registered retailers on the platform KPI is:

Calculation Example

Suppose a wholesale eCommerce platform has 1000 registered retailers. The number of registered retailers on the platform KPI would be:

Therefore, the platform has 1000 registered retailers on their platform.

KPI Advantages

• The number of registered retailers on the platform KPI can provide insight into the level of interest in the platform.
• It can help platform owners identify areas of growth and improvement.
• It can be used as a benchmark to compare the performance of the platform to competitors.

KPI Disadvantages

• The number of registered retailers on the platform KPI does not take into account the active retailers on the platform.
• The KPI does not reflect the revenue generated by the registered retailers.
• The KPI may be skewed if a large number of inactive retailers are included in the total.

KPI Industry Benchmarks

• Average number of registered retailers in the B2B eCommerce industry is 678
• Average number of registered retailers on the Amazon Business platform is 1 million
• Average number of registered retailers on the Alibaba platform is 8.5 million

Number of transactions completed on the platform

Definition

The number of transactions completed on the platform is the total number of successful transactions that have taken place on an e-commerce platform, including purchases, orders, and other types of transactions.

Use Case

The number of transactions completed on the platform is a crucial KPI for online businesses as it helps them understand the transactional behavior of their customers. The data can be used to track sales performance, identify trends, and optimize the overall customer experience. Having a clear understanding of this metric can help businesses identify areas of opportunity for growth and make informed decisions about pricing, marketing, and inventory management.

How To Calculate KPI

The formula for calculating the number of transactions completed on the platform is:

Calculation Example

If a business had 1,000 successful transactions in a month, and 5,000 unique visitors during the same period, the calculation for the number of transactions completed on the platform would be:

Therefore, the number of transactions completed on the platform is 20% for the given month.

KPI Advantages

• Provides insights into transactional behavior of customers
• Helps businesses identify areas of opportunity for growth
• Useful in making informed decisions about pricing and inventory management

KPI Disadvantages

• Does not provide information about the quality of transactions
• Transactional behavior may be affected by external factors
• May not accurately reflect the overall performance of the business

KPI Industry Benchmarks

As of 2021, the average number of transactions completed on the platform for e-commerce businesses is approximately 10-15%, depending on the industry. However, this may vary significantly based on the type of business, target audience, and other factors.

Average commission fee earned per transaction

Definition

Average commission fee earned per transaction is a key performance indicator that measures the average commission earned on each transaction. It helps businesses assess their pricing strategy and determine the profitability of their sales.

Use Case

This KPI is particularly useful for wholesale ecommerce businesses that rely on commissions as a significant source of revenue. By tracking the average commission fee earned per transaction, businesses can identify patterns and trends to optimize their sales strategy.

How To Calculate KPI

To calculate the average commission fee earned per transaction, use the following formula:

Calculation Example

For example, if a wholesale ecommerce business earned a total of $10,000 in commission fees and completed 500 transactions in a month, the average commission fee earned per transaction would be $20.

KPI Advantages

• Helps businesses assess pricing strategy
• Provides insight into the profitability of sales
• Allows businesses to identify patterns and trends

KPI Disadvantages

• Does not take into account other sources of revenue
• May not be applicable to businesses that do not rely on commissions
• Can be skewed by outliers or seasonal factors

KPI Industry Benchmarks

According to the Ecommerce Benchmark Report, the average commission fee earned per transaction for wholesale ecommerce businesses ranges from $10 to $40, with an average of $20.

Supplier satisfaction rating

Definition

Supplier satisfaction rating measures the level of satisfaction that suppliers have with your eCommerce business. This includes how well you communicate with them and how responsive you are to their needs.

Use Case

By measuring supplier satisfaction rating, you can identify areas of improvement in your communication and responsiveness. This can lead to better supplier relationships, which can result in better pricing and higher quality products.

How To Calculate KPI

Calculation Example

Suppose you surveyed 100 suppliers and found that 80 of them are satisfied with your eCommerce business. Then, your supplier satisfaction rating would be:

KPI Advantages

• Identifies areas for improvement in supplier communication and responsiveness
• Improves supplier relationships, resulting in better pricing and higher quality products
• Provides a more complete view of your eCommerce business's performance

KPI Disadvantages

• May not take into account the quality of products or pricing
• Supplier satisfaction may be influenced by factors outside of your control, such as shipping times
• Difficult to compare across industries, as supplier satisfaction may vary widely depending on industry norms

KPI Industry Benchmarks

The supplier satisfaction rating varies significantly depending on the industry and business size. Here are the benchmarks for various industries:

• Retail: 80%
• Manufacturing: 70%
• Transportation and warehousing: 60%
• Finance and insurance: 90%

Top Seven Wholesale ecommerce KPI Metrics. How to Track and Calculate

Retailer satisfaction rating

As a wholesale eCommerce business, it is essential to keep track of your retailer satisfaction rating. This key performance indicator (KPI) is used to evaluate how satisfied your retailers are with your products, services, and overall brand experience. A high retailer satisfaction rating translates to better customer retention, increased sales, and improved brand reputation.

• Definition: Retailer satisfaction rating measures how satisfied retailers are with a wholesale eCommerce business. It is determined by collecting feedback through surveys, reviews, and other touchpoints.
• Use Case: Retailer satisfaction rating is an important metric for assessing the overall quality of the service provided by a wholesale eCommerce business. With this KPI, you can identify areas that require improvement to ensure more satisfied customers.
• How To Calculate KPI:
Retailer Satisfaction Rating (%) = (Number of satisfied retailers / Total number of retailers) x 100
• Calculation Example:
Retailer Satisfaction Rating (%) = (250 satisfied retailers / 300 total number of retailers) x 100 = 83%
• KPI Advantages: A high retailer satisfaction rating can enhance customer retention, increase sales, and improve your brand reputation. By identifying gaps in the customer experience, you can take proactive steps to improve your products and services.
• KPI Disadvantages: Retailer satisfaction rating does not provide a comprehensive view of what retailers think about your brand and may be affected by selection bias.
• KPI Industry Benchmarks: The industry benchmark for retailer satisfaction rating varies greatly by industry. For wholesale eCommerce businesses, 80-85% is considered a good rating.

Number of Products Offered on the Platform

As a wholesale ecommerce business, one important KPI to track is the number of products offered on your platform. This KPI measures the total number of products available for purchase and can provide valuable insights into your inventory management and supplier relationships.

Definition

The number of products offered on the platform refers to the total number of unique SKUs available for purchase on your ecommerce website.

Use Case

Tracking the number of products offered on the platform can help you to evaluate your inventory management and supplier relationships. A high number of products can indicate a wide selection for customers and potentially better supplier relationships, while a low number of products could signal a need to diversify your inventory or improve relationships with suppliers.

How To Calculate KPI

To calculate the number of products offered on the platform, use the following formula:

Calculation Example

For example, if your ecommerce platform offers 500 unique SKUs, then the number of products offered on the platform would be 500.

KPI Advantages

• Can help evaluate inventory management
• Provides insights into supplier relationships
• Indicates the size of your product selection for customers

KPI Disadvantages

• A high number of products may require more resources to manage
• A low number of products may indicate a lack of inventory diversity
• May not provide insight into sales performance

KPI Industry Benchmarks

According to a study by BigCommerce, the average number of SKUs for an ecommerce business is 9,482, with the top-performing businesses having an average of 21,228 SKUs.

Average Time Taken to Fulfill an Order

Definition

The average time taken to fulfill an order is a key performance indicator (KPI) that measures the time taken to deliver a product after receiving an order. This KPI helps ecommerce businesses to identify delays in order fulfillment and improve their overall customer experience.

Use Case

For ecommerce businesses, delivering products in a timely manner is crucial for customer satisfaction and retention. By tracking the average time taken to fulfill an order, businesses can identify areas where they need to improve their operational efficiency to meet customer expectations.

How to Calculate KPI

To calculate the average time taken to fulfill an order, you need to add up the time taken to fulfill each order and divide it by the total number of orders fulfilled.

Calculation Example

For example, if a business has fulfilled three orders that took 300, 400, and 500 minutes respectively, the average time taken to fulfill an order would be 400 minutes.

KPI Advantages

• Improves customer satisfaction: By reducing the time it takes to fulfill an order, businesses can improve their customer experience and increase satisfaction.
• Helps identify bottlenecks: Tracking the average time taken to fulfill an order can help businesses identify bottlenecks in their supply chain and fulfilment process.
• Improves operational efficiency: By identifying trends in the time it takes to fulfil an order, businesses can make operational changes to reduce the time taken and increase productivity.

KPI Disadvantages

• May not capture all delays: The average time taken to fulfill an order may not capture all the causes of delays in delivering a product. Factors such as weather, shipping carrier delays, or product availability may not be reflected in this KPI.
• May not reflect quality of service: Businesses that prioritize quality of service over speed may prioritize other KPIs, such as customer satisfaction or net promoter score, over average time taken to fulfill an order.

KPI Industry Benchmarks

The average time taken to fulfill an order varies by industry and product type. According to a study by ShipBob, a fulfillment services provider, the average time taken to fulfill an order across all industries is 3.1 days, but this can vary widely depending on product type, shipping destination, and other factors.

As an entrepreneur in the wholesale ecommerce industry, keeping track of key performance indicators (KPIs) is essential for the success and growth of your business. In this article, we have outlined three critical KPIs that every business owner should be tracking: the number of registered retailers, average commission fee earned per transaction, and number of products offered on the platform.

Having a clear understanding of the growth of your platform and the size of your potential customer base can be gained by tracking the number of registered retailers. Similarly, the average commission fee earned per transaction provides crucial insights into the financial performance of your business, indicating areas for improvement and growth opportunities. Lastly, the number of products offered on the platform demonstrates the scope of your platform and the variety of products available for your customers.

Tracking these KPIs can help you identify areas of strength and areas that require attention, allowing you to make informed business decisions. Monitoring your progress over time and focusing on KPI targets can help you achieve your business goals and ensure long-term success.