Retail Metrics – Page 2

Customer Acquisition Cost (CAC) is the cost a business incurs to acquire a new customer. This includes the fully loaded costs associated with sales and marketing to attract a potential customer and to convince them to purchase, divided across all new customers.

One of the most fundamental metrics, Customers is the total count of paying patrons of your business. Without paying customers there is no growth and no value in your business. To accurately assess your customer base, it's important to track new and returning customers as they play a different role in your business. New Customers refer to users who just signed up or made their first purchase with your company while Returning Customers are those who have already made a purchase in the past.

Days Sales of Inventory (DSI) is the average number of days a company takes to convert its inventory into sales. It measures how long stock sits before it sells, making it a key indicator of operational efficiency, liquidity, and working capital management.

Disputed Charges measures the total value of charges that have been challenged and may be reversed. This metric represents the amount of money that could potentially be deduced from your net charges.

Fill rate is the percentage of customer orders fulfilled immediately from available stock, without backorders or lost sales. It measures inventory efficiency, demand forecasting accuracy, and supply chain reliability, and is a key indicator of customer satisfaction and operational performance.

GMROI is a retail and supply chain metric that measures how much gross profit a business earns for every dollar invested in inventory. It combines profit margin and inventory turnover into a single number, helping retailers identify which products and categories generate the strongest return on their inventory investment.

Inventory Accuracy is the percentage of stock records in your management system that match the actual physical inventory in your warehouse or store. It is a critical supply chain KPI that supports smooth fulfilment, reliable financial reporting, and effective demand forecasting. Discrepancies between system records and physical stock lead to stockouts, overstocking, and financial inaccuracies.

Inventory carrying cost is the total expense a business incurs to store and maintain unsold inventory over a given period, expressed as a percentage of inventory value. It includes capital costs, storage, insurance, taxes, and inventory risk such as spoilage or obsolescence. Most businesses see carrying costs between 15% and 30% of total inventory value. Tracking this metric helps optimize reorder quantities, reduce overstocking, and protect profit margins.

Inventory lead time is the total elapsed time from when a replenishment order is placed with a supplier until the goods are received and available for use or sale. It spans order processing, supplier production or sourcing, transit, customs clearance, and warehouse receiving.

Inventory Quantity is the currently available stock for each product variant a retail location or e-commerce store has available. Keeping track of inventory quantity is important to ensure that there are enough goods in stock to meet customer demand. Businesses should identify the optimal stock level for each product variant and adjust accordingly. If inventory levels are too low, customers may not be able to purchase a desired item or find an alternative solution elsewhere. On the other hand, if levels are too high, it can lead to an overstocking of products and wasted resources.

Inventory Turnover measures how often a business sells through its entire inventory within a given period. It is a key efficiency metric used to evaluate pricing strategy, product demand, and purchasing decisions, and is especially critical for businesses handling perishable goods.

Net Sales is the revenue a business retains after subtracting discounts, product returns, and damaged goods from Gross Sales. It is a more accurate measure of actual earnings than Gross Sales alone.