The first, and most important step is to use the audit on this page to get an idea of how your store is performing compared to industry standards. Simply input the metrics required and the audit results will show you how your store is doing.

Here’s how to source the data:

Start with the money flowing through your store. Pull up your sales numbers, expenses, and bank statements side by side. Are your Shopify (or other platform) sales matching what’s hitting your bank account? Sometimes transaction fees or chargebacks can create surprising gaps.

Look at where your money’s going each month. Compare your actual spending against what you planned, especially in three big areas: your marketing budget, shipping costs, and inventory purchases. Are your Facebook ads or Google campaigns bringing in enough sales to justify their cost? Are shipping rates eating too much into your margins?

Here’s a crucial part: figure out how much it costs you to get each new customer. Take your total marketing spend and divide it by the number of new customers – that’s your customer acquisition cost (CAC). Now compare this to how much these customers typically spend with you. If you’re spending $30 to acquire customers who only make $25 purchases, you’ll need to either reduce acquisition costs or find ways to increase their purchase value. Take a “walk” through your own store as a customer would. Try buying something – where do you get stuck? Is your checkout process smooth? Are your product photos clear? Every small friction point costs you sales.

Check your Google Analytics or store dashboard to understand customer behavior. Which products do people look at most? Where do they abandon their carts? What’s your typical order value? These insights tell you where to focus your improvements. While you should always focus on bringing in more sales, there are many ways to improve your bottom line if you know where your weak points are.

We have a full post about how to eCommerce KPIs that answers this question in depth. But, here’s a summarized version:

First, let’s talk about Gross Profit Margin – this is what you actually keep from each sale after paying for your products. Don’t get caught up just looking at total sales numbers. If you’re selling $10,000 worth of products but your cost of goods is $8,000, your 20% margin might be too thin to sustain your business. Many successful e-commerce stores aim for at least a 30-40% margin to cover other expenses and still turn a profit.

Next, watch your Customer Acquisition Cost (CAC). If you’re spending $1,000 on marketing and getting 100 new customers, that’s $10 per customer. The key question is: are these customers spending enough to justify that cost? This ties directly into their lifetime value; if they make repeat purchases, a higher initial acquisition cost might be worth it.

Your Average Order Value (AOV) tells you how much customers typically spend per purchase. If it’s too low, you might need to adjust your strategy. Maybe add product bundles, offer free shipping thresholds, or cross-sell related items. For example, if your AOV is $30 but you need $40 to be profitable, you could set free shipping at $45 to encourage larger purchases.

Conversion rate is a simple and important metric that shows the percentage of visitors that actually buy something when they enter the store. If you’re getting lots of traffic but few sales, something’s off. Maybe your product pages aren’t convincing enough, your prices aren’t competitive, or your checkout process is too complicated. A 2-3% conversion rate is typical for e-commerce, but this varies by industry.

Finally, your Net Profit Margin is the real bottom line – what’s left after absolutely everything is paid for. This includes not just product costs, but shipping, platform fees, marketing, staff, and all other expenses. Think of it as your business’s report card. If this number isn’t healthy, you’ll need to either cut costs or find ways to increase revenue.

This number varies to the point that it’s not really useful for you as a store owner to focus on it too much. Not only does this change drastically based on how long a store has been in business but it’s also subject to too many seasonal effects at any point in time. Rather, focus on positive cash flow and net profit as much as you can. As long as those two numbers are healthy, you’re on the right track. We’ve seen too many store owners make bad decisions by comparing their store in incorrect ways with other stores.

Make time each month to check your store’s vital signs. Think of it like a quick health check in which you review your sales data, look for any unusual patterns in ad conversions, and see if your expenses are in line with expectations. If you’re extremely vigilant and in tune with your store’s finances, you can extend this to a quarterly audit.

Catching discrepancies early and correcting them before they cost you too much money is a significant difference between stores that barely survive and those that thrive. If you’re running a smaller store with a handful of products, you might get by with less frequent checks. But if you’re managing hundreds of SKUs or operating in a fast-moving market like fashion or electronics, you might need even more frequent monitoring.

Google Analytics is your foundation, especially when connected with your Shopify store. It shows you exactly how customers find and move through your site. Pay special attention to the “Purchase journey” report, it’ll show you where people drop off in your buying process. Are they leaving on product pages? Abandoning carts? This knowledge helps you fix the leaks in your sales funnel.

Your Shopify dashboard itself is incredibly valuable as well. Shopify’s native analytics are an excellent complement to GA and have some metrics you can’t find anywhere else.

Ad platforms you’re using will also have a lot of crucial data that you can’t get otherwise. Meta (Facebook/Instagram) Ads Manager and Google Ads Manager both have tons of data that you can’t get otherwise, and some of that will translate with some confidence to a generalizable metric. For instance, ads that do well on Facebook usually make relatively good display ads.

Email marketing and SMS platforms will round out your metrics. Klaviyo is particularly good at reporting but platforms like Gorgias also give you a lot of good information.

These platforms always work best when you use them together because many of them (like Google Analytics and Shopify Analytics give you complementary data. And while some data, like that from Google Search Console, is available for free, most of the valuable data will come from paid ads so you can get more value out of ads by learning from them.