The e­commerce web sites have unique critical indicators that set them apart from other types of sites. They tend to be focused on making the sale now, getting the credit card, and shipping the product - the metrics that reflect this. Examples of e­commerce web sites include ticket sales, books, CDs, videos, and even SAAS (software as a service) web sites. While the SAAS business model isn't exactly e­commerce, the web site certainly can be.

Profit per order (profit/orders): Profit per order is an indicator of the average profit each web site sales generates. Many companies have a steady stream of high volume, low margin products—the bread and butter of their business; and a limited number of low ­volume, high ­margin products that create great one­-off profitability events. If your site has a mixture of high­ margin and low ­margin products, it would make sense to measure them separately.

Gross profit margin (sales / cost of the items sold): Depending on your accounting system, you may also need to subtract the cost of sales (which may include ad costs and any commissions paid). Typically, analytics packages aren't robust enough to track this level of detail so you'll need an accounting or reporting system to calculate these numbers for you. Integrating web site analytics into your internal accounting tools is a difficult process that usually requires an outside specialist. But, it can make or break an e-commerce site’s profitability. Profit margin is expressed in a percentage: The average profit margin of our online sales was 26 percent in October, which increased to 32% during the Christmas buying season'.

Conversions: The number of sales your site generates is a key metric from which several others can be derived. Ultimately, more sales are a good thing but it's a raw statistic that needs careful scrutiny. Everybody remembers the heady early days at Amazon.com where their sales were increasing by millions of orders per quarter—and they were losing money on every order. It wasn't until they started charging for shipping, and increasing their margin that they started turning huge profits. So, unless you’ve got money to burn, work to increase your conversions but not at the expense of good profit on each order. Conversions are simple numbers: 'We had 350 sales from our web site in May.'

Conversion rate (number of conversions / the total number of visitors): This metric measures two things: the value of the traffic that is coming to the site and the ability of the site to turn visitors into paying customers. If your conversion rate is low, is it because you're attracting the wrong visitors or is it because your web site isn't credible and easy to use?

Average cost per conversion (cost of advertising / number of transactions): This is similar to profit per order but it measures the cost of acquiring each order. This metric is often used in pay-per-click (PPC) campaigns. For SEO, it’s quite high in the beginning but then steadily drops toward zero.

SEO can be very expensive in the beginning but over time (typically in about a year), it beats PPC in cost per conversion. That's because you're not paying for each click with SEO the way you are with Google Adwords and the other Paid Search providers. The high cost in the beginning is an investment in higher rankings. Once you're there, that cost goes away and is replaced by a minimal cost to maintain the high rankings. Many companies combine SEO and PPC to get the best (and worst) of both worlds—quick, short-­term results with high ongoing cost of PPC and high initial expense but ultimately low cost per conversion with SEO.