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36. KPI in All Industries

36.3 E-commerce

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This is a fictional marketplace seller, not the Amazon Now delivery page in Module 28. Interviewers ask conversion and returns. They rarely ask for sessions.

KPI What the number means Who uses it Action it drives
Conversion Orders placed divided by sessions. Seller, category lead A low rate means the listing, the price, or the photo. Not "buy more traffic".
Return % Returned orders divided by orders placed. Seller operations A high rate means size, damage, or a wrong promise. Fix the SKU before the next ad.
AOV Delivered sales divided by delivered orders. Finance and the seller Used with returns, not instead of returns.

Fictional sample rows. One month. Delivered sales exclude returns.

City Sessions Orders placed Delivered Returned Delivered sales
Pune 1,000 50 40 10 ₹20,000
Nashik 500 40 36 4 ₹18,000
Kolhapur 800 20 16 4 ₹8,000
Nagpur 400 40 32 8 ₹16,000
Mumbai 200 20 18 2 ₹9,000
Sambhaji Nagar 600 10 8 2 ₹4,000

Worked from those rows.

  • Sessions 3,500. Orders placed 180. Delivered 150. Returned 30. Delivered sales ₹75,000.
  • Conversion is orders placed divided by sessions. 180 ÷ 3,500 = 5.1%.
  • Return % is returned orders divided by orders placed. 30 ÷ 180 = 16.7%.
  • AOV is delivered sales divided by delivered orders. 75,000 ÷ 150 = ₹500.

Pune conversion is 50 ÷ 1,000 = 5.0%, and returns are 10 ÷ 50 = 20.0%. Nashik conversion is 40 ÷ 500 = 8.0%, and returns are 4 ÷ 40 = 10.0%.

Good KPI Vanity metric
From the same rows Nashik conversion 8.0% and return 10.0% Pune 1,000 sessions
Why Nashik turns more of the visit into an order, and fewer come back. Pune looks biggest on traffic. One in five Pune orders was returned. Traffic did not pay the return.

What the manager does. The Pune seller opens the 10 returned orders (size, damage, or late) before buying another 1,000 sessions. The Nashik seller keeps the listing that converted and does not copy Pune's traffic plan. Kolhapur is the warning: 800 sessions and only 20 orders (2.5%). That is a listing problem, not a city problem.

Ravindra Bagale's Tip

Friends, many students define return % as "returns divided by sessions". Sessions are not the denominator. First write down orders placed, or delivered plus returned, and then divide. Pay attention!