The metrics that matter at $1M+ revenue

Scale creates new requirements

At $1M+ in annual revenue, your e-commerce business is no longer a startup experiment. It’s a real company with real complexity. The metrics that mattered at smaller scale still matter, but new dimensions become critical. Decisions have larger consequences. Mistakes are more expensive. Analytics must mature accordingly.

Profitability metrics take center stage

At $1M+, profitability matters more than growth rate.

Contribution margin by segment:

Understand profitability by product, category, channel, and customer segment. Aggregate profitability hides important variation. You need granular visibility.

Operating margin:

Beyond contribution margin, track operating margin after fixed costs. Is the business generating operating profit? At this scale, it should be.

Unit economics rigor:

CAC, LTV, and payback period should be calculated with precision, not estimates. These numbers drive investment decisions worth tens or hundreds of thousands of dollars.

Cash flow management

Cash flow complexity increases with scale.

Cash conversion cycle:

Track days inventory outstanding, days sales outstanding, and days payables outstanding. Understand how long cash is tied up in operations.

Working capital management:

At $1M+, working capital requirements are significant. Track working capital ratio and ensure adequate liquidity.

Seasonal cash planning:

Larger seasonal swings in inventory and sales create cash flow volatility. Plan and forecast cash needs months ahead.

Customer segmentation depth

You have enough customers to segment meaningfully in multiple ways.

RFM segmentation:

Recency, frequency, monetary value. Identify your best customers (recent, frequent, high-value) and your at-risk customers (not recent despite history).

Behavioral segments:

Segment by purchase behavior. Single-purchase customers versus multi-purchase. Category preferences. Price sensitivity indicators.

Segment-specific strategy:

Different segments deserve different treatment. VIP customers get different communication than one-time buyers. Your analytics should support segment-specific action.

Customer acquisition sophistication

Acquisition at scale requires sophisticated measurement.

Attribution modeling:

Multi-touch attribution becomes valuable. Understand which channels contribute at different funnel stages. First touch, last touch, and everything between.

Incrementality testing:

Does your advertising actually drive incremental sales, or would those customers have bought anyway? At $1M+ ad spend, incrementality matters enormously.

CAC by customer quality:

Not just CAC by channel, but CAC for high-value versus low-value customers. Are you efficiently acquiring the customers who matter most?

Retention becomes paramount

At scale, retention economics dominate.

Cohort retention curves:

Track retention curves for each cohort over extended periods. How many customers are still active at 12, 24, 36 months?

Churn analysis:

Understand why customers leave. Is it product issues? Competitive pressure? Life changes? Analyze churned customers for patterns.

Retention program ROI:

Track the return on retention investments. Loyalty programs, subscription options, engagement campaigns. What’s the payback?

Inventory investment optimization

Inventory at $1M+ is a significant capital investment.

GMROI by category:

Gross margin return on inventory investment shows which categories generate the best return on inventory capital. Allocate accordingly.

Demand forecasting accuracy:

Track forecast accuracy. Improve forecasting to reduce both stockouts and overstock.

Inventory aging:

Monitor inventory age distribution. Prevent dead stock accumulation with proactive aging analysis.

Marketing mix modeling

Understand how marketing channels work together.

Channel interaction effects:

Does paid search work better when you’re also running display? Does email perform better after social exposure? Understand channel interactions.

Budget allocation optimization:

With significant marketing spend, optimal allocation matters. Small efficiency improvements translate to large dollar savings.

Diminishing returns identification:

At what spend level does each channel hit diminishing returns? Don’t overspend on saturated channels.

Competitive intelligence

At scale, competitive dynamics matter more.

Market share indicators:

Track share of search, share of voice, and relative growth rates versus competitors where possible.

Competitive pricing monitoring:

Track competitor prices systematically. Understand your positioning and how it affects conversion.

Competitive response patterns:

When you promote, do competitors respond? Understanding competitive dynamics informs strategy.

Operational metrics

Operations at scale require metric visibility.

Fulfillment performance:

Track fulfillment accuracy, shipping time, and delivery success rates. Operational quality affects customer experience and retention.

Customer service metrics:

Contact rates, resolution times, satisfaction scores. Service quality matters more as you scale and can’t handle every issue personally.

Return processing:

Returns at scale are a significant operation. Track return processing time, cost, and inventory recovery rates.

Financial forecasting

At $1M+, forecasting becomes essential.

Revenue forecasting:

Build models that predict revenue based on traffic, conversion, and AOV trends. Test accuracy and improve over time.

Cash flow forecasting:

Forecast cash position weeks and months out. Anticipate crunches and plan accordingly.

Scenario planning:

Model different scenarios. What if growth slows? What if a key channel stops working? What if costs increase? Be prepared.

Reporting and communication

At this scale, others need analytics too.

Team dashboards:

Different team members need different views. Marketing needs campaign metrics. Operations needs fulfillment metrics. Finance needs profitability metrics.

Regular reporting cadence:

Weekly, monthly, quarterly reporting rhythms. Consistent metrics, consistent format, consistent distribution.

Board or investor reporting:

If you have outside stakeholders, they need clear, professional analytics communication.

Metrics summary for $1M+ businesses

Focus on these at scale:

Contribution margin and operating margin by segment. Cash conversion cycle and working capital. Customer segmentation (RFM and behavioral). Multi-touch attribution and incrementality. Cohort retention and churn analysis. GMROI and inventory aging. Marketing mix and channel interaction. Competitive positioning indicators. Operational quality metrics. Revenue and cash flow forecasting.

At $1M+ revenue, analytics transitions from founder insight tool to business management system. Build the sophistication your scale demands.