Introduction: Net Product Sales is important for merchants who have high return or cancellation rates or may want to remove shipping & handling revenue from their sales numbers to more accurately reflect product sales performance. Once calculated, Net Product Sales can be used in place of Revenue for calculation of other derived metrics like ROAS, ROMI, and Contribution Margin.
Analysis Overview:
If your organization sells products on it website and/or in retail stores, Net Product Sales should be your primary revenue metric. The metric is based on sales data, your product taxonomy, shipping & handling costs, and optionally, coupons and discounts. Most likely this data will have to be gathered from different sources and depending on your needs, may be analyzed in a digital analytics tool, spreadsheet, or BI tool. The recipe can also be applied to non-product businesses using similar data points that are unique to the business.
Analysis Benefits:
- Compare category, subcategory, and product sales performance on a normalized basis
- Understand the impact of marketing on true product sales numbers
- Understand the intersection of product sales and customer segments
DAA Members, view full recipe.
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Casey Carey
Director, Google Analytics Marketing
Google (Corporate Account)
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