In dropshipping there are few important metrics which are critical to the success of your business. The first one being your u003cstrongu003etraffic source u003c/strongu003efollowed by u003cstrongu003esales by traffic. u003c/strongu003eu003cbr/u003eu003cbr/u003eThese two metrics will tell you where you’re u003cstrongu003egetting the most traffic fromu003c/strongu003e and which channel is converting to sales most. u003cbr/u003eu003cbr/u003eThe next most important dropshipping metrics include your u003cstrongu003econversion rate u003c/strongu003ewhich is the total visitors at any given period divided by the number of sales x 100. This is key in identifying what turns visitors into buyers. u003cbr/u003eu003cbr/u003eu003ca href=u0022https://www.founderjar.com/customer-acquisition-costs/u0022 target=u0022_blanku0022 rel=u0022noreferrer noopeneru0022u003eu003cstrongu003eCustomer Acquisition Cost (CAC)u003c/strongu003eu003c/au003eu003cstrongu003e u003c/strongu003eis what tells you how much it costs you to get one customer within a period and therefore how effective your marketing strategies are.  u003cbr/u003eu003cbr/u003eYou can find that by dividing your total marketing costs by the number of customers you acquired in a period. u003cbr/u003eu003cbr/u003eu003ca href=u0022https://www.founderjar.com/customer-lifetime-value/u0022 target=u0022_blanku0022 rel=u0022noreferrer noopeneru0022u003eu003cstrongu003eCustomer Lifetime Valueu003c/strongu003eu003c/au003eu003cstrongu003e u003c/strongu003eis howu003cstrongu003e much your customer is worth to your business over the time they constantly buy from you. u003c/strongu003e u003cbr/u003eu003cbr/u003eFor example, let’s say you sell a subscription-based service/product and your customers averagely unsubscribe after a year. Their lifetime value will be calculated based on how much they spent with your business over a period of a year.  u003cbr/u003eu003cbr/u003eTo find this value, simply take your customer’s average order, multiply it by the order frequency and divide it by the customer’s average lifespan. u003cbr/u003eu003cbr/u003eu003cstrongu003eTotal Sales u003c/strongu003eis how much revenue your store is generating in any given period of time. u003cstrongu003eAverage customer order value (AOV) u003c/strongu003etells you how much your customers are spending in your shop and what their buying habits are.