this Shopify software tracks all of your financial metrics (in real time)

Have you ever wondered how brands keep track of their finances as they scale? Or, or maybe you've wondered how to get an idea of what your finances might be before you wait for your books at the end of the month from your accounting or bookkeeping team. Well, in today's video, I'm gonna show you a software we've built over the last few years. I can easily attribute most of our success as a company to this software right here that I'm about to show you. It's helped us generate over $100 million in revenue through e-commerce at this point. There's a few data points I'm gonna show you. There's 10 key metrics that you need to focus on if you're an e-commerce brand owner, no matter how big or small you are, you could be at $500 a month, you could be at $500,000 a month. These data points are crucial to success for e-commerce. I'm gonna jump onto a screen share and show you this software, and then I'm going to audit a brand in real time. So this is our software, IRIS. As you can see, we're actually on our 9th version of this now. We've been through a couple hundred iterations, but 9 official versions over the last few years. This has gone from a simple spreadsheet to the software that now actually runs this. Lots of it you can't see because again, it is just being displayed through a spreadsheet, but there's a whole ton of other functionality that we use this for, which I'm about to explain. I'm gonna show you what it's like to actually analyze a brand like this. This is one of our brand partners. This is real life data from this timeframe. You can see the business is running really efficiently, which is awesome. But let me walk you through all of the different data points that you can see on my screen here. So we've got total sales, we've got contribution income. Now contribution income and contribution margin, if you're not familiar with it, is your revenue minus all of your variable expenses. So these are all of your expenses before your fixed expenses. If you are a business owner, you might be paying salaries, you might have payroll, you might have software expenses like your Shopify subscriptions or Shopify apps or Klaviyo or other software like that. You might even have an office that you're paying rent for and you might have none of that. No matter what your fixed expenses are, your contribution income and your contribution margin do not include your fixed expenses. Essentially, we have revenue minus cost of goods. So the cost of your products minus shipping and handling. Excuse me. So the cost to get the product to your customers minus payment processing, which is the fees that you pay Shopify for them to process the transaction. And occasionally, if you're working with a company like ours or some other popular Shopify apps out there, you might also be paying out a revenue share on your, on your total revenue. To a company. So all of those things get factored in before we calculate contribution income. You'll actually see that after sales is the second most important thing that we care about, and we'll explain why in a little second here. Now we also have net income. So this is true net profit for the business. You can see in this business's instance, there was $507,000 in contribution profit over this timeframe and $474,000 in net profit. Now if we look at sessions, we'll also see a metric next to it called sales per session. I'm sure everybody is familiar with conversion rate optimization and CVR and AOV, which are the other metrics next to this one. But sales per session is a really interesting metric because it's calculated by dividing your total sales by the amount of sessions or the amount of visitors that you've had on your website. And this tells you how efficiently your website is running. So if you look at this brand, you'll see that per visitor that we get on the website on average for this time frame, we make $5.79, which is pretty good for an e-commerce brand. The highest that we see is over $10 in really occasional situations. Again, like when we had some ads going really viral in the month of December for this brand. But more typically, most brands are sitting around $1 to $2 to $3 sales per session. And if your brand does have a sales session that is below $3 to $4, there are a couple of really important things you're going to need to focus on. So that's a great metric for us to have because we kind of understand what the benchmark is for the brand and what should we should be expecting to see. It helps us determine if the conversion rate optimization and the AOV optimization that we're doing to a website is actually profitable and is actually giving us more revenue per visitor coming onto the site. If you're not familiar, average order value is the amount that each customer spends. Conversion rate is the percentage of them that convert. We hit some really crazy conversion rates on site over this time frame. I might touch on it a little bit, uh, later. Apart from that, we also track average ad returns across the platforms. You'll see with lots of brands, even with low ad ROASes, we're able to scale revenue really high. And that's due to a few things like tracking, but also with a brand like this one. So you'll also see ad spend and you'll see ad ROAS metrics here. This brand, really all of the revenue comes from ads. There aren't really any other main channels. So this blended ROAS is actually a more accurate reflection of what the brand's returns are. And if I look at their total blended ROAS for the time frame, it sits at 6.17. So they run efficiently and that's why their profit margins are so good. Now, if we jump into sessions data, you'll see some more granular sessions data. I can flick through these things. One of the things that we like to pay attention to really closely is returning orders. You can see for this brand throughout the month, their returning order rate wasn't bad considering that we brought in so many first-time customers, but it's definitely something that can be improved. And one of the ways we're improving this for this brand is by expanding our product lines. Now, as I move on over to sales, Again, you're going to see all of the regular Shopify sales data that we're tracking. Contribution. So total sales, discounts, returns, net sales, shipping, shipping sales per order, tax, taxes as a percentage of sales, metrics that are just super helpful for us. And often they're not something we look at very often, but occasionally we need to reference it and understand how much of the sales is actually going towards sales taxes we're collecting from customers. Now, the same is the case for any ad platforms. You can see tracking quite a decent amount of purchases. You can see the metrics on the account here. There's things that you might be surprised to see in terms of performance. There are things that you might not expect to see that are working really well for this brand as well. CPA is relatively low and the AOV is, is a lower margin product. This has been super successful on TikTok as well as Meta. You'll see we kind of capped out our spend at $5K a day over there on Meta. I can go down the line with Google. Again, you're going to see regular ad platform metrics for both Google and TikTok here. But this is where we start to get to the meat and potatoes of everything. So if we look at our cost of goods sold here, we can see on a daily basis what percentage of sales is going towards COGS. We can also see the amount that we're spending on COGS. We can also see average output order. So this is really helpful to see because sometimes one of the biggest ways for you to increase your profitability as a brand especially with, with most brands having much lower net margins than this one. COGS is a huge lever to pull, and if you're a new brand, you're likely paying too much for COGS. I'll say that right now. If you're a brand doing less than $50,000 a month in revenue and you're manufacturing your own products, even less than $100,000 or $200,000 a month, you're probably spending too much on inventory and manufacturing. And if you're manufacturing in China, uh, and you're based in the US or you're based in the European country, they're likely taking advantage of you because of the language gap. So something in general, if you are a brand in that range, something to look into. There are great people in America that have excellent connections in China. They can get you fair prices on products. You're also welcome to contact me and I'll put you in touch with these people as well. Shipping and handling. So this is also something that we factor for every order. What's super interesting with this brand is the COGS is almost the exact same as the shipping and handling cost because the the product itself is quite heavy. So COGS look great, but when we factor in shipping, we're spending about 35% of the brand's revenue just on the product and getting it to the customer itself, which again, for most brands is, is a really good margin, but it's something for us to be aware of and watch out for as well. And you'll see how shipping became higher as a percentage of total sales as we had average order values that got much lower throughout the middle of the month. So you'll see a few knock-on effects from that. Now we also track payment processing. It looks like a couple of our API calls aren't working here, which is really good to see, or a couple of our actual equations aren't working. And you'll see ad spend and advertising metrics summarized. So what you can see is us tracking in real time on a daily basis, all of the expenses for the business. Now, obviously there's all of this other data pulling in here as well, but seeing expenses on a daily basis, if you're familiar with the soft why I like Triple Whale is super, super helpful for your brand because it means that instead of waiting till the end of the month or trying to guess what you need in terms of ROAS, you can calculate that on a daily basis. One of the biggest mistakes people make is they set targets around ROAS and not profitability. So the reason that this software exists in the first place, and again, I'll touch on some of these other metrics that I'm scrolling past here. The reason this software exists in the first place is so that we can set target profit margins. With every brand that we are running, we have target profit margins that we must hit in order to grow revenue. And that ensures that we're not attached to a ROAS metric. Because if I give you an example, and it might not fluctuate much for this brand because there's only a few key SKUs, this metric here calculates your breakeven ROAS. So you may or may not have come across this before, but you can calculate the breakeven return that you need on any advertising platform in order to make sure that the money that you're spending is at least not losing you anything. However, what happens when you start doing things like running discounts? Maybe you're running a sale, maybe you start introducing some other products and there's different margins on all of your different products. Sometimes the products that you sell are going to be more popular or you're running a discount for the day. And what you'll see is the ROAS, the breakeven ROAS that you need increases. And oftentimes this is not something that your marketing team will be aware of or will factor in. And it's not something that brand owners are aware of either. So it's really easy as a brand owner to, to run a discount or something along those lines and discover at the end of the month that you weren't as profitable as you thought, even though you're hitting ROAS targets or you're hitting ROI targets inside of ad accounts. So for us and our approach with everything, it starts with the profitability. We know so long as we're above our profit margin target, we're going to spend more money on ads and we're going to grow the revenue. And it makes it really, really simple because it means that we don't really care about ROAS. And I'll probably make a video about this one day, but I think the ROAS is almost BS as a metric because all that really matters at the end of the day is whether the business has extra cash that they can use to continue reinvesting into its growth. There are a couple other metrics we're tracking on here. These are conversion metrics. You'll be familiar with most of these, but we track drop-offs at every stage from add to cart to initiate checkout to conversion rate. You'll see that this brand's drop-off here for the initiate checkout to actual session converted is relatively high, but it's not terrible. I'm going to check out your brand right now. If either of your drop-off rates are above 50%, there's an issue with your checkout. You're either sending terrible quality traffic to your website and you're running things like link-click campaigns on advertising platforms and you're telling Facebook and Meta that you want people on your website, but you don't care about them purchasing, or there's something inherently wrong with your checkout and you should go and split test it or not even split test it, but just test it on a few different browsers, maybe on your phone, maybe get your friend with an Android or the other opposite phone type as you to, to go and test it themselves. What you might see sometimes is it works great for you on Google Chrome, but every other browser there's an issue with your checkout. And this happens as you add apps in and the longer and longer that you run your website for. So last but not least, a few value metrics. Again, the big one that we really care about is, is going to be the sales per session here. We track a lot of, of comparisons to average. If that makes sense, because we want to see on a daily basis, oh wow, sales per session today was down 53%. I wonder why. Now, in this brand's case, it's because we had sold out of bestsellers and we had a few other backup products which were still performing well and we were still able to do around $15,000 to $20,000 a day in revenue with. So obviously still, still really impressive, but something good to note. And sometimes you will catch things that are complete anomalies. You'll have drop-off rates being really high one day, or you might even have extra profit, or you might be more profitable than you actually expected. Being able to see every one of these metrics on a daily basis in real time, broken down day by day for the entire history of the brand, the entire previous years that it's been operational, means it's really easy to spot trends and know when something's going really well and something's going really poorly. So just having access to this data is a huge advantage for us. And it allows us to focus on strategy and growth for brands instead of trying to figure out what's going wrong in the first place. Because we have so much insight, we have so much data and such a great understanding of exactly what's happening for our brands on a daily basis that we can be proactive and we can focus on the future. We can focus on what we need to do to continue growing revenue over coming months versus trying to figure out why our ads aren't performing this week. So I'm going to summarize the key metrics that you should really be paying attention to as a brand owner, as someone with an e-commerce business. These metrics under the highlights section are the top 10 or 11 metrics that we have found to be important for us as e-commerce brand operators and for partners that we work with in the space. These are the top 10 or top 11 requested metrics out of all of the data points that we have across all of our, our databases. And if you're not going to track other metrics, at least track these few because they give you the fastest and most high-level snapshot into your business at any given point. These metrics will help you identify weak points in your brand. If you would like to get an understanding of how to build dashboards like this for your company, if you would like to get an idea of what it would be like to partner with me on e-commerce and have work like this, done for you and your brand, you can book a call with me below. But the most important thing that you should take away from this video is to be tracking your data and probably tracking it a whole lot more granularly because you might track something like this. You probably don't have it automated. You probably copy and paste numbers into a spreadsheet somewhere or download numbers once a month. So if you want to be successful in e-commerce, you need to build these dashboards. You need to find ways to automate them, and you need to make sure that this data is accessible to anyone on your team that is going to be spending even a single dollar for you and your business, because they must understand how it relates to profitability if you want to grow quick. So that being said, if you want a better understanding of how this can be applied to your business, book a call with me below. I will run you through this myself. And if you're a brand doing less than 8 figures a year, I will spend 15 to 30 minutes with you giving you a proper action plan and selfishly looking for ways to potentially partner and work together on scaling your brand as well. Bye.