Articles

ROAS, or Return On Advertising Spend, is a marketing metric that measures the efficacy of a digital advertising campaign in the ecommerce industry. It helps online businesses evaluate which methods are working and how they can improve future advertising efforts. To calculate ROAS, you need to divide the gross revenue from the ad campaign by […]

Retained earnings are a vital aspect of ecommerce accounting. In simple terms, they represent the profits that an online business has retained over time, rather than distributed as dividends to shareholders. These earnings are reinvested back into the business to fund growth and expansion initiatives, ensuring the company’s financial stability and potential for future success.

Payroll in ecommerce refers to the process of managing employee compensation and benefits in online businesses. It involves tasks such as collecting and organizing employee data, calculating earnings, withholding and reporting taxes, and ensuring accurate record-keeping. Payroll management is important for ecommerce businesses to ensure accuracy and timeliness in paying employees. It requires setting up

Payment gateway fees are an essential aspect of running an ecommerce business. These fees are charged by payment gateway providers to facilitate the secure processing of online payments. As an ecommerce business owner, it’s crucial to understand these fees and their impact on your overall payment processing costs. Payment gateway fees can include various charges,

Operating expenses are a crucial aspect of running an ecommerce business. As an ecommerce business owner, understanding and managing your operating expenses effectively is essential for financial stability and profitability. In this article, I will provide an overview of operating expenses in ecommerce, their definition, calculation, and importance. I will also share strategies to reduce

Net income is a crucial metric for evaluating the financial performance and profitability of an ecommerce business. It is the profit that remains after deducting all expenses, including taxes, from the total revenue generated by the business. Often referred to as the “bottom line,” net income is the last line on the income statement, showcasing

Merchant account fees are a crucial aspect of ecommerce businesses. These fees refer to the costs that merchants incur when accepting online payments through their ecommerce merchant accounts. While the traditional payment processors and payment gateways were the primary methods of accepting payments, the ecommerce industry is now shifting towards utilizing merchant accounts. Ecommerce merchant

As an ecommerce business owner, it’s crucial to understand the concept of marketplace fees. Marketplace fees are charges imposed by online marketplaces on sellers for using their platform. These fees are an essential consideration when deciding which marketplace to join and have a significant impact on a business’s profitability and growth. Marketplace fees can take

Liquidity plays a vital role in ecommerce accounting, ensuring smooth financial operations and robust growth in the digital marketplace. It refers to the ability of a marketplace to quickly convert assets into cash to meet short-term financial obligations. Liquidity ratios and measurements are used to assess a marketplace’s liquidity, including metrics such as the Search

In the world of ecommerce, customer lifetime value (LTV) is a crucial metric that measures the total expected revenue from a single customer over the course of their relationship with your brand. It is essential for driving long-term growth and success in the competitive ecommerce landscape. Understanding LTV allows ecommerce businesses to make informed decisions

Liabilities in ecommerce refer to the legal debts that an e-commerce retailer owes to a legal entity. This can include obligations such as paying off bank loans, employee salaries, and payments to suppliers. Liabilities can be classified into different types, including current liabilities, which are short-term debts that need to be paid within a year,

Journal entry is a fundamental concept in ecommerce accounting that involves recording and documenting financial transactions. It is an essential process that ensures accurate and complete financial reporting, enabling businesses to track their financial performance and make informed decisions. Journal entries follow the double-entry system, where each transaction is recorded in two accounts, with a

Inventory turnover is a crucial aspect of efficient inventory management in the world of ecommerce. It measures the frequency with which a company sells and replenishes its inventory within a specific timeframe, providing insights into the effectiveness of its stock control and supply chain management. By calculating the inventory turnover ratio, which is obtained by

Inventory in ecommerce refers to the tangible goods or products that an ecommerce business offers to its customers. This includes finished goods that are ready for sale or in the possession of the business. It is an important asset for ecommerce businesses as it represents their revenue generation. Proper inventory management is crucial for business

An income statement, also known as a profit and loss statement or P&L statement, is a key financial statement in ecommerce. It provides a comprehensive view of a business’s financial performance by showing the revenue generated and expenses incurred over a specific period of time. The income statement is essential in tracking the profitability of