Unlock the Potential in Your E-commerce Biz

by Jackie Biallas

There are numerous metrics important to an e-commerce business for analyzing customer acquisition and retention.  But, what if you could dig deeper with your analysis?  There are so many insights that can be gleaned from your sales data, enabling you to maximize your sales and profitability.



To achieve greater customer acquisition and retention, it is important for e-commerce retailers to analyze their traffic – to understand how much traffic is coming to the site, where it’s coming from, and how people are interacting with the site.  Sales data, marketing data, and checkout behavior are all important metrics to understand in the e-comm world. It is also vital to know: What is the conversion rate?  What is the Average Order Value?  What actions can be taken to increase these metrics?


What happens after you have the traffic and the customers?  How do you know if you have the right product?  To really maximize your e-commerce retail business, it is important to also dig deep into the product assortment, inventory and channel distribution.  By determining the drivers of the business, you can have the right product, at the right time, in the right amount – maximizing profitability.

Product Attributes

Attributes are the important selling features of products.  These attributes vary from business to business.  For example, important attributes for an apparel business could include size, color, material, gender, seasonality, classification and style.  Attributes for a sports equipment business could include sport, color, size, material, gender, and brand.

Once you have determined the attributes that are important to your business and assigned them to each of your products, you can use your sales and inventory data to determine what attributes are driving your business.  By comparing sales and inventory levels for the important attributes, you can determine where the holes in your assortment are and where you are overstocked.  For example, if tops are 60% of the business, but only 50% of the inventory, you are either understocked in tops, or overstocked in other areas of your business.

Furthermore, by slicing and dicing your sales data, you can often gain insights into new product opportunities.  In this basic example, the best-selling style of handbag in your assortment is a crossbody, the best-selling color is black, and the best-selling size is a mid-size bag.  However, the product assortment does not have a black, mid-size crossbody.  Once this is added to the assortment, it is sure to become a best-seller!

Conversely, if a particular color is not selling across the board, you can determine that it is probably time to liquidate the inventory in that color and not buy it again until trends change in its favor!

Inventory Levels

Inventory is often the largest asset of a company.  It can also be the greatest expense, if not managed properly.  Carrying costs often account for 25% of the inventory value.  Excess inventory reduces cash flow, preventing you from buying profitable inventory.  It is important to make the inventory as productive as possible – here are some ways:

  • Classify your products by priority level. Different products will have differing profitability and seasonality, just as customers or sales channels may be of differing priorities.  Sales usually follow the 80/20 Rule, where the top 20% of the products produce 80% of the sales.  By categorizing products in this way, a company may realize that they are over-assorted and may move to liquidate excess inventory immediately, thus saving themselves the inventory carrying costs associated with that inventory.
  • Forecast the demand for your products to determine future inventory needs, factoring in sales curves, lead times, velocity, and criticality. This is a continual process, as sales trends can change.  Because of the increasing complexity of the marketplace, it is important to have tools, such as a forecasting system, that can gather the data from the multiple sources and provide visibility to the inventory.
  • As a product’s sales slow, it is not hitting its inventory turn goals, and the product becomes obsolete. It is imperative that a company takes action to liquidate slow selling or unprofitable items in a timely manner.  The faster slow-selling products are removed from inventory, the faster they can be replaced by more profitable, better-selling items.

Sales Channels

In this complex world of e-commerce, you probably sell across many sales channels.  You may have online customers, as well as wholesale customers.  You may sell on Amazon, as well as drop shipping for retail partners.  There are different costs and pricing structures associated with each of these channels.  It is important to determine what the costs are at the product level and have visibility to the profitability margins of each of the channels.  Strategic decisions can be made to maximize profitability.  These strategies may include focusing marketing efforts or prioritizing order fulfillment.


Unfortunately, it can be difficult to gain vision into all your sales data.  For one thing, many e-commerce platforms do not support as many attributes as necessary to analyze a business.  Inventory levels are often not easily viewable and must be exported into a spreadsheet for analysis.  Profit margins can be difficult to see at a channel level.  Fortunately, [basic-code] provides a solution.

The Sales Analysis and Forecasting App from [basic-code] brings all your vital data together into one location, so you can efficiently perform the forecasting and analysis necessary to maximize your sales and profitability.  This user-friendly and efficient app allows e-commerce merchants to assign up to 12 attributes to their products, for creating optimal product assortments.  Margin analysis can be done at the product level and drilled down to channel or customer.  Reports are available at the click of a button.

For more information about unlocking the potential of your e-commerce business through sales analysis and forecasting, contact SAFIO Solutions today.