The 4 Cornerstone Metrics of a Profitable Ecommerce Business

One Stop Shop

Imagine you’re in The Matrix.

You’re wearing a black coat.

You have a slick hairstyle and set of cool shades to go along with it.

And you’re asked to choose the blue pill or the red pill.

The blue pill guarantees to give your Ecommerce business $200,000 total revenue every year.

The red pill ensures that your business rakes in $100,000 in yearly net profit.

Which pill do you take?

If you take the blue pill ($200,000 total revenue), but you have no idea about your gross profit margin or the overhead expenses of your business, there’s a possibility that your business won’t be sustainable over the long run.

Sure, $200,000 in gross revenue sounds like a dream come true. But if your cost of goods sold and operating expenses are $210,000 per year, you’re in the red.

But if you take the red pill ($100,000 net profit) and your business raked in $50,000 net profit last year, you just doubled your net profit!

You can either reinvest your profit into your business or use a specific portion of it to use for yourself.

Either way, profitability can dictate how significant the contribution of your business is in your growth as an entrepreneur.

How can you guide your business to actually be profitable? These four cornerstone metrics are what we’re going to discuss in today’s episode.

Edit: 03:52 mark: $5 not $50

“Would you rather have $200,000 in total revenue or $100,000 in net profit? Profit is so much cooler than revenue. Here’s how you can measure it in your business.”

“If you’re not monitoring these 4 cornerstone metrics in your business, you may unknowingly be operating at a loss…”

“Ask yourself: For every product sold, how much money is actually made?”

“For every acquired customer, how much did you really spend on marketing to get them? Here’s how you can calculate this.”

“For a business to be profitable, you need positive cash flow.”

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Music featured in this episode was "Celery Man" by Birocratic and can be found at www.soundcloud.com/birocratic.
This podcast was produced by comealivecreative.com.