Definitions

Find out how we define each of our different metrics and formulas here.


Accounting Metrics

Gross Revenue

Total sales after discounts, but before refunds, shipping, and taxes.

Gross Revenue = Total Sales - Discounts

Net Revenue

Total sales after discounts and refunds, but before shipping and taxes.

Net Revenue = Total Sales - (Discounts + Refunds)

We always use Net Revenue where applicable.

Cost of Goods Sold (COGS)

Cost of the sold products, not including shipping and taxes.

Gross Profit

Profit after deducting COGS, shipping, and taxes from Net Revenue.

Gross Profit = Net Revenue - (COGS + Shipping + Taxes)

Gross Profit After Advertising Costs (GPAAC)

Profit after deducting advertising costs from Gross Profit.

GPAAC = Gross Profit - Advertising


Key Metrics

Average Order Value (AOV)

Average net revenue per non-fully-refunded order.

AOV = Net Revenue / Orders

Average Orders Per User (AOPU)

Average number of non-fully-refunded orders per buyer.

AOPU = Orders / Buyers

Average Revenue Per User (ARPU)

Average net revenue per buyer of any non-fully-refunded order.

ARPU = Net Revenue / Buyers

Customer Lifetime Value (CLV)

Forecasted net revenue for a customer normalized over 2 years.

Details: Simple CLV, Advanced CLV

Average Days Between Purchases (ADP)

Average days between purchases across all orders.

ADP = Days Between Orders / Orders

Repeat Buyers

Customers who purchase one or more orders during a given time period, having purchased only 1 order by the start of the time period.

Churned Users

Users whose last order date is more than ADP days, or users who signed up more than ADP days ago with no purchase.

Churned = [(Days since last order) or (Days since signup)] > ADP

Acquisition to Churn Rate (ACR)

New users (email signups and/or buyers) relative to churned users. ACR > 1 means acquisition exceeds churn, ACR < 1 means acquisition is lower than churn.

ACR = New Users / Churn