Important Shipping KPIs for Running an Ecommerce Business

The following is a guest post by Chris Ivester, API Product Manager at ShipStation.

So you’re running an ecommerce business, but aren’t sure which shipping KPIs to track. Don’t wait until you’re making a ton of sales before implementing an efficient shipping strategy based on real data.

While there are many helpful metrics to track, we’ve highlighted a few in this article that will set you in the right direction.

Average Delivery Time

We live in the digital age where customers not only desire, but demand, instantaneous service. It’s no wonder that a slow package can turn into a negative business review.

The shipping service you choose will directly impact costs and delivery timeframes. And if the average delivery time is unacceptably lengthy, it will impact your customer satisfaction, and ultimately your bottom line.

On-Time Shipping Percentage

It’s important to know if your shipped packages are reaching customers when they’re supposed to. Packages that arrive on or before their estimated delivery date build customer trust and loyalty.

Measuring on-time delivery can be tricky since the definition depends on many different variables. The Balance gives a thoughtful breakdown on how to define “on-time delivery” and explains how a clear understanding of this shipping KPI benefits both you and your customers.

Average Cost by Service

While offering free shipping is most likely what your customers would like to see, we know this isn’t always a realistic option. Similar to delivery timeframes, costs can change based on the different shipping services you offer. To decrease shipping costs, consider your options for reducing package weight or adjusting the package size.

Return Rate

Returns can happen for many reasons: something is broken, the wrong item was sent, and so on. While returns don’t have to be a bad thing, an excess amount could point to a shipping and/or product issue. Dig in to the numbers and don’t be afraid to ask for feedback on how to improve your process.

Don’t already have a clear return policy? Be sure to include one in your terms.

Inventory to Sales Ratio

How much inventory do you keep on the shelves? It’s a fine line between running short on product and overstocking. Keeping an eye on your inventory to sales ratio will help you determine if sales have dipped, or you’re keeping too much product on the shelves.

Learn exactly how to calculate the ratio via these three simple steps.

Whether you’re running a small business or an enterprise level company, these are a few of the shipping KPIs that should help drive your online business forward. Keep in mind that a seamless ecommerce shipping solution will save you valuable time from start to finish of the entire process.

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