Short answer: the most important KPIs for a Shopify store are revenue, conversion rate, average order value, gross margin, contribution margin, CAC, ROAS, MER, CLV, the percentage of returning customers, the return rate and the number of visitors. Together they tell you whether your store is growing and whether that growth is profitable.
Many store owners look at one number every morning: yesterday's revenue. Understandable, but revenue says nothing about what's left over. We run our own homeware store on Shopify, and only realised how little we actually knew when we put all the numbers side by side. In this article you'll learn which 12 KPIs matter, how to calculate them and how often to look at them.
What is a KPI for an online store?
A KPI (key performance indicator) is a measurable number that shows whether your store is meeting its goals. The difference from an ordinary statistic: a KPI drives a decision. The number of pageviews is a statistic. The conversion rate is a KPI, because if it drops, you'll change something on your site.
The 12 KPIs at a glance
| KPI | What it measures | Formula | How often to check |
|---|---|---|---|
| Net revenue | What you sell, excl. VAT, returns and discounts | Gross revenue − VAT − returns − discounts | Daily |
| Visitors (sessions) | How many people visit your store | From Shopify or Google Analytics | Daily |
| Conversion rate | What share of visitors place an order | Orders ÷ sessions × 100% | Weekly |
| Average order value (AOV) | How much a customer spends per order | Net revenue ÷ number of orders | Weekly |
| Gross margin | What you keep after cost of goods | (Net revenue − COGS) ÷ net revenue × 100% | Monthly |
| Contribution margin | What you keep after all variable costs | Net revenue − COGS − shipping − transaction fees − advertising | Weekly |
| CAC | What a new customer costs | Marketing costs ÷ new customers | Monthly |
| ROAS | Revenue per euro of ad spend, per channel | Ad revenue ÷ ad spend | Daily |
| MER | Total revenue per euro of total ad spend | Total revenue ÷ total ad spend | Weekly |
| CLV | What a customer brings in on average over the whole relationship | AOV × purchases per customer × gross margin | Quarterly |
| Returning customers | What share of orders come from existing customers | Orders from existing customers ÷ all orders × 100% | Monthly |
| Return rate | What share of products sold come back | Returned orders ÷ all orders × 100% | Monthly |
Revenue: the beginning, not the end
Net revenue is the basis of every other KPI, but only if you measure it correctly. In Shopify, total sales include VAT and shipping; net revenue does not. If you calculate with the wrong number, you overestimate your margin and ROAS by the standard Dutch VAT rate of 21 per cent. Use revenue excluding VAT, after returns and discounts, for all calculations.
Conversion rate and average order value: the two levers
Revenue always equals visitors × conversion rate × average order value. If you want to grow, you turn one of those three dials. Buying more visitors is the most expensive. Conversion and order value you can improve on your own site: better product photos, clear delivery times, bundles or a free shipping threshold.
According to Shopify, the average conversion rate for online stores is around 2 to 3 per cent. Above all, compare yourself with your own previous period: a drop from 2.1 to 1.6 per cent is a warning sign, whatever the average.
Gross margin and contribution margin: what's really left
Gross margin is revenue minus cost of goods sold (COGS). Shopify only calculates it for products with a cost per item filled in. Contribution margin goes a step further and also deducts shipping, payment fees and advertising. That's the most honest answer to the question of whether an order makes money. An order of €120 with a 50 per cent gross margin can, after €8 shipping, €3 transaction fees and €35 ad spend, leave only €14.
CAC and CLV: what can a customer cost?
CAC (customer acquisition cost) is what you spend to win one new customer. CLV (customer lifetime value) is what that customer brings in over the whole relationship. A ratio of 3 to 1 or better between CLV and CAC is often seen as healthy. If your CAC is higher than the margin on the first order, you only earn money on repeat purchases. That's fine, as long as you know those repeat purchases will actually come.
ROAS and MER: are your ads profitable?
ROAS measures revenue per channel according to the ad platform itself. MER looks at your total revenue against your total ad budget and is therefore more honest, because platforms often double-claim each other's sales. In Calculating ROAS, POAS and MER you'll learn how to determine your break-even ROAS per channel.
Returning customers and returns: the silent KPIs
A rising percentage of returning customers means your product and service are good. A rising return rate often says something about your product information: colours that look different from the photo, or sizes that don't fit. Both numbers move slowly, so checking them monthly is enough.
Which numbers are misleading?
Not every number in your Shopify admin is a KPI. Three pitfalls we ran into ourselves:
- Stock levels as a measure of bestsellers. With dropshipping or supplier stock, your inventory says nothing about what sells. Look at orders and revenue per product.
- Revenue including VAT. This makes every margin and every ROAS look 21 per cent better than it is.
- Adding up platform ROAS. Google and Meta together often claim more revenue than you actually made.
How do you track this without a spreadsheet?
The numbers above come from at least four sources: Shopify, Google Ads, Meta and your accounts. Tracking them manually costs hours every week of exporting and pasting. In Shopify dashboard: all your store numbers in one place you'll learn how to automate that.
Frequently asked questions
What is the most important KPI for an online store?
Contribution margin, because it shows what an order brings in after cost of goods, shipping, payment fees and advertising. Revenue alone says nothing about profit.
What is a good conversion rate for a Shopify store?
On average, the conversion rate for online stores is around 2 to 3 per cent. More important than the average is your own store's trend week on week.
How often should I review my store KPIs?
Revenue, visitors and ROAS daily. Conversion, order value, contribution margin and MER weekly. Margins, CAC, returning customers and returns monthly. CLV quarterly.
Should I calculate KPIs including or excluding VAT?
Always excluding VAT. VAT isn't your revenue; it belongs to the Dutch tax authority (Belastingdienst).
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