Glossary

Ecommerce KPI Glossary

Seller dashboards use many metrics, but only a few directly explain whether a product can scale profitably. This glossary focuses on practical definitions.

Contribution margin

Contribution margin is profit after variable costs, divided by net revenue. It is more useful than gross margin when planning ads.

ROAS

Return on ad spend equals revenue divided by ad spend. It should be compared against gross margin or contribution margin.

ACoS

Advertising cost of sales equals ad spend divided by revenue. It is common in Amazon PPC planning.

CAC

Customer acquisition cost is the average cost to acquire one customer or order. Shopify sellers often use CAC when evaluating paid social campaigns.

Break-even ad spend

Break-even ad spend is the maximum ad cost per order before contribution profit reaches zero.