The earnings remaining after all direct costs have been subtracted from revenue

Contribution = Net revenue - product COGS - shipping cost - refunds - ad spend

The percentage of net revenue remaining after all direct costs and refunds have been accounted for

Note that revenue is calculated by Retail Analytics and differs from the Revenue metric available in Inventory Planner. Net revenue accounts for discounts but not refunds and includes shipping revenue. Shipping revenue is calculated by apportioning the shipping charge paid by the customer to items in their order, split by revenue.

Net revenue = Product revenue (excluding tax) + shipping revenue (excluding tax)

Contribution margin = Contribution / Net revenue

Paid Social Impressions: the number of times ads were shown to someone

Paid Social Clicks: the number of times paid social ads were clicked on

The proportion of paid social ads that were clicked on after being shown to someone

CTR = Paid social clicks / Paid social impressions

The cost of your digital marketing efforts

Ad spend is pulled from platforms connected to Retail Analytics including Google Ads, Facebook Ads and TikTok Ads. Ad Spend is attributed to specific products using the destination URLs of your campaigns.

The average advertising spend per new customer, i.e. customers placing an order for the first time.

CAC = Ad spend / Total new customers

Average 12-month lifetime value of customers acquired via the product

This differs from other lifetime metrics in Inventory Planner as it relates to the lifetime of customers where the product was present in their first order, rather than the lifetime of the product itself.

This metric is useful when prioritizing replenishment based on longer term customer-based metrics.

Customer LTV = LTV gross revenue / New customer gross revenue