Ask a Marketer: What is a Good Conversion Rate for DTC E-commerce Brands?

Is there a good conversion rate for D2C e-commerce brands?

We use our expertise to answer this question.

The answer? It depends on your goals.

Every business is different, so it’s a bit of a “trap” to say that there’s one standard “good” conversion rate all e-commerce sites should strive for. A “good” conversion rate for one company might be a terrible conversion rate for another because each company has different demands, different audiences, and different products and/or services. 

The question you should ask is, what is the overall goal? Is it to generate more orders, make more money, or are you trying to corner market share? Answering these questions will help you determine what website conversion rate is good for your business needs. Various elements are at play because it’s entirely possible you could increase conversion rate, but make less money.

For example: If your AOV is $100 and average daily orders is 50, that’s $5,000 a day. You make a change that increases order conversion by 10% (+5 orders) but AOV goes down 25% (-$25). That’s 55 orders per day, but only $75 per order. You’re now making $4,125 per day, -$875 less. The increased order volume isn’t off-setting the lower amount of money you’re getting per order, meaning that striving for a higher conversion rate isn’t always better.

In short, a “good” conversion rate for DTC e-commerce brands is whatever is better than the last time you measured it as long as your monetization remains higher than before.

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