KPIs (key performance indicators) are objectives and targets for all kinds of businesses - among them, marketplaces. These indicators are easily measurable to provide visibility on the progress of a project, and to measure and analyze each life cycle of an activity, a strategy or the behavior of buyers and sellers. KPIs are also used to compare a marketplace's performance with that of its competitors, and to determine whether the strategies implemented are effective or not. Companies can use KPIs to identify areas for improvement and track their performance over time. KPI performance is also important for sellers, as it enables them to understand where they stand in relation to other sellers on the platform.
Let's take a look at 17 KPIs for marketplaces: these key indicators are categorized according to what they measure and the business unit they relate to.
Sales performance KPIs
Total sales
Total sales measures the total amount of sales made on your marketplace account. It's an important KPI because it allows you to visualize the evolution of sales that increase or decrease over time, and therefore to indicate potential seasonality and high-revenue periods, as well as measure the ROI of certain paid campaigns. Turnover is also considered an important KPI for marketplaces, as it enables us to measure the site's performance in relation to competitors, and take strategic decisions to improve profitability.
Average Basket Value
Average Basket Value: KPI that measures the average value of a shopping basket on a marketplace. It is calculated by dividing total sales by the total number of baskets, giving an indication of average order size and associated profits. It is particularly useful for marketplaces to monitor their performance and return on investment.
Conversion rate
The conversion rate measures the percentage of visitors who have made a purchase on your marketplace account. It's a KPI that lets you know whether an offer is attractive to customers and whether your account is optimized for conversion. What's more, it helps identify high-performing paid campaigns, as well as conversion actions generated from organic search results.
In other words, it's a marketplace's ability to turn visitors into customers. It is calculated by dividing the number of conversions (sales or other actions) by the number of unique visitors. A conversion can be an order, a paid subscription, a download or any other measurable action that brings profit to the company.
Total number of orders
The total number of orders measures the number of orders placed on your marketplace’s account. This KPI lets you know how well your account is optimized for sales. The Total Orders KPI is a performance indicator that measures the total number of orders placed on a marketplace. It is used to evaluate their efficiency and success. The total number of orders is useful for marketplaces because it enables them to track the quantity of products sold and understand their level of customer satisfaction. What's more, where simple sales or average basket figures aren't enough: the number of orders can help reveal a substantial variation in inventory.
Cart subscription rate
In the conversion funnel, of the following 3 KPIs, the shopping cart subscription rate is likely to come first. This is a statistical measure that evaluates buyer behavior on marketplaces. It is the percentage of people who add products to their shopping cart, only to leave the site without finalizing their order. This KPI is very important, as it enables us to better understand consumer behavior and find solutions to improve buyer conversion rates (via BNPL solutions - Buy Now Pay Later, deferred payment, instant payment...).
Order cancellation rate
The order cancellation rate is a key performance indicator (KPI) used by marketplaces to measure the number of orders that are canceled in relation to the total number of orders. It is calculated by dividing the number of canceled orders by the total number of orders. A low order cancellation rate indicates that customers enjoy their purchases and are satisfied with the products or services provided. Marketplaces can use this KPI to improve their products and services, and optimize their ordering process to reduce the number of canceled orders. The majority of cancellations are due to out-of-stock situations: the nightmare of every e-tailer.
Reimbursement rates
The refund rate inevitably comes later than the cancellation rate in the funnel, as it measures the number of refunds requested by customers in relation to the total number of orders processed over a given cohort. From a customer satisfaction point of view, it is valuable to monitor, as the lower the refund rate, the higher the quality of the products and services offered. A higher refund rate may indicate a lack of quality, and may even have a negative impact on the SEO ranking of the products and services offered.
Revenue per click (RPC)
Revenue per click (RPC) is a key performance indicator (KPI) used by marketplaces to measure the amount of revenue generated by each click on an ad or a product. It is calculated by dividing the total revenue generated by the total number of clicks on the ad or product. A high KPI indicates that ads or products are generating interest and revenue. Marketplaces can use this KPI to optimize their advertising campaigns and offers to maximize revenues.
Traffic-related KPIs
Number of unique visits
The number of unique visits is considered to be the base metric and one of the first indicators to be taken into consideration when evaluating marketplace performance. This indicator measures the number of people who visit an online marketplace during a given period, regardless of the number of pages viewed or actions performed. It therefore provides an estimate of the number of users visiting the site.
The number of unique visits determines the number of people visiting the site, and can be used to compare a marketplace's performance with that of its competitors. This KPI can be monitored to see upward and downward trends in the number of visitors, which can help find solutions to increase user engagement and attract new people to the marketplace. Search engine optimization (SEO) has a big impact on the effectiveness of the site and the number of unique visitors it can attract through search platforms.
Number of page views
The number of page views is a performance indicator that measures the total number of pages visited by users on a given platform. It's an important metric for assessing site performance and user engagement. The higher the number of page views, the more likely it is that users will search for and purchase products and services on the platform. It can also be used to measure the effectiveness of advertising campaigns and marketing content on the platform. In the event of premature abandonment before payment, a visit to a page remains an opportunity to make one's brand attractive for a possible future purchase.
Number of clicks on the products
The number of clicks on products is a KPI (key performance indicator) used to quantify the number of times a user has clicked on a product displayed on a website, which can be an indicator of the visibility and interest in the products on offer. The higher the number of clicks on products, the more likely the marketplace is to attract customers and generate sales.
The number of clicks on products gives the company an indication of how its conversion rate (the number of people who buy a product after clicking on it) compares with that of its competitors. Once companies can identify what works best for their product sheets, they can adjust their strategies accordingly. Companies can generate conversions by analyzing the number of clicks on their products and interpreting the meaning of this data. Companies can also adapt their marketing strategies according to trends in clicks on their products, for example by modifying their product page, the order of product information they supply, or evaluating their advertising strategies.
Bounce rate
Bounce rate is a KPI (key performance indicator) for marketplaces that measures the percentage of visitors who leave a web page without ever interacting with it. It is used to measure the quality of the user experience and the effectiveness of the page's content and design. The higher the bounce rate, the more likely it is that the content and design are insufficient to engage visitors - or that internet bots (fake users) are engaged in the activity for some reason. A high bounce rate may also occur due to poor positioning, making the page appear irrelevant to visitors, or to a UX (user experience) that needs improving.
Customer engagement and satisfaction KPIs
Average acquisition cost
Average acquisition cost measures the average cost of acquiring a new customer on the marketplace. It's an important KPI because it lets you know whether your advertising campaigns are profitable and whether you can afford to continue using them. For example, an average CAC that's too high for an average basket size that's too low is a signal to cut an acquisition campaign.
Product costing
Product costing measures the production cost of each product you sell on the marketplace. It's an important KPI because it lets you know whether you're selling your products at a price sufficient to cover your costs. It's usually made up of labor costs, raw material costs, transport and packaging costs, marketing costs and the costs of other services. Cost adjustment is essential for sellers on online platforms, as it can help them manage inventory and study their profit margins and ROI (return on investment). Good management of these costs is the key to efficient operations and consolidation of your market presence. It's also important to check suppliers' rates to minimize their costs, and to use inventory planning software to ensure that you always have a regular, stable flow of supplies.
Number of leads generated
The number of leads generated measures the number of people who have expressed interest in your products or services on your marketplace account. This is an important KPI, as it tells you whether your offer is attractive to potential customers.
Customer satisfaction rate
The satisfaction rate gives each marketplace merchant visibility of the product quality and customer service it has provided. The higher the rate, the more satisfied customers are with their purchase, and therefore the greater the likelihood that they will recommend it. The satisfaction rate is not only a very useful metric for measuring the quality of an online store's sales performance, but also for identifying strengths and weaknesses that could be improved. It is a critical indicator of the health of the merchant and its activities on the marketplace. Merchants who know and measure their customer satisfaction rate can often better assess their buyers' overall experience and make significant changes to it, thereby greatly increasing their chances of generating more revenue and growth.
Percentage of products sold at full price
The percentage of products sold at full price helps you assess the level of sales of each product on a marketplace, and whether you need to consider adjustments to improve your profit potential. This analysis gives you information on how buyers view and react to your products, and on their purchasing trends. By knowing the percentage of products sold at full price, you'll be able to make the right decisions to optimize your business and maximize your sales.
