Take rate.

For e-commerce businesses, this metric holds the keys to online sales growth.

But what exactly does take rate mean in the world of e-commerce? How do you calculate it? And what’s considered a “good” take rate benchmark to aim for?

In this in-depth guide, we’ll unpack everything you need to know about take rates for e-commerce stores.

You’ll learn how to measure take rate, tips to improve it, and why this metric is so critical for boosting revenue.

Let’s dive in!

What is Take Rate in E-commerce?

Take rate refers to the percentage of website visitors that complete a desired action.

In e-commerce, the action is typically a product purchase.

For example:

• An online store has 1,000 visitors last month
• 100 of those visitors made a purchase
• The e-commerce take rate is 10% (100 purchases / 1,000 visitors = 10%)

A higher take rate means more people are buying when they visit your e-commerce store. This turbocharges revenue growth.

Why E-commerce Take Rate Matters

Let’s explore why e-commerce take rate is such a valuable metric to track.

Indicates Website Effectiveness

First, take rate shows how effective your website is at converting visits into sales.

The higher your take rate, the more compelling your products, messaging, and website experience.

Identifies Revenue Growth Potential

Take rate also reveals the revenue growth potential hiding in your existing traffic.

If you can nudge the take rate higher, you generate more sales without spending more on marketing.

Enables Performance Benchmarking

In addition, take rate enables useful benchmarking.

You can compare your take rate over time, against competitors, and across marketing channels.

Allows for target-setting

Moreover, take rate helps you set tangible targets.

Leadership can establish take rate goals and align e-commerce initiatives accordingly.

How to Calculate E-commerce Take Rate

Now let’s walk through how to actually measure the take rate for an e-commerce business.

The formula is simple:

Take Rate = Number of Orders / Number of Unique Website Visitors

To break this down:

Determine Number of Orders

Add up all completed orders for a given date range. Be sure to count each unique order only once.

Calculate Unique Visitors

Unique visitors means the number of individual people who visited your site over the period. Exclude repeat visits from the same user.

Plug Into Formula

With orders and visitors, simply divide orders by visitors to get your take rate percentage.

For example:

• 500 orders in one month
• 5,000 unique website visitors
• Take rate = 500/5,000 = 10%

And that’s it! A straightforward way to measure your e-commerce take rate.

E-commerce Take Rate Benchmarks to Shoot For

Now that you can calculate the take rate, you’re probably wondering:

What’s a good take rate? How do I know if my store is under or over-performing on this metric?

These are key questions.

While there are no absolute standards, here are some general e-commerce take rate benchmarks to aim for:

• Excellent: 3-4%
• Good: 2-3%
• Average: 1-2%
• Poor:

According to BigCommerce, the average take rate across e-commerce is around 2%.

Keep in mind take rate also varies by industry. For example, electronics tend to convert lower than fashion or beauty products.

The best way to benchmark is to analyze take rates for direct competitors in your specific niche.

5 Proven Ways to Increase Your E-commerce Take Rate

If your take rate falls below your goal, here are some proven tactics to move the needle:

1. Improve On-Site Search

Make it easy for visitors to find the right products quickly.

2. Display Social Proof

Show reviews, testimonials, and other trust signals prominently.

3. Offer Free Shipping

Absorb shipping costs to reduce cart abandonment.

4. Leverage Loyalty Programs

Encourage repeat purchases with exclusive offers for members.

5. Retarget Cart Abandoners

Remarket to visitors who left items in their carts.

Small tweaks like these compound to make a website stickier and more persuasive.

Balancing Take Rate With Other Ecommerce Metrics

While optimizing take rate is crucial, be careful not to over-focus on this one metric.

You also want to keep an eye on:

• Conversion rate – % of site visitors who buy. Take rate factors in all visitors regardless of quality.
• AOV or average order value – how much the average customer spends. The take rate doesn’t account for order size.
• Profit margin – the net profit from an average order. Take rate ignores costs and discounts.

The ideal situation is improving the take rate while monitoring these other metrics too. This ensures revenue growth translates to the bottom line.

Is Take Rate the Magic Bullet for E-commerce Success?

Given its importance, could take rate alone make or break an ecommerce business?

While the take rate is clearly invaluable, focusing solely on this one number has some risks:

• Very high take rates may indicate excessive discounts that hurt margins.
• Spikes in the take rate could come from poor quality or unprofitable traffic sources.
• Take rate goals could result in over-optimizing at the expense of long-term brand building.

The key is viewing take rate as part of a holistic e-commerce dashboard. Look at the take rate alongside other metrics for the full picture.

Take the Next Step: Unlock Growth With Take Rate

Now that you’re a take rate expert, it’s time to put this metric into action!

Start tracking your e-commerce take rate over time, benchmark against others, and set revenue growth goals based on improving it.

Just a small bump in take rate can work wonders, especially when combined with more traffic.

So unlock your online sales growth potential today by focusing where it matters most: your e-commerce take rate.

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The post What is Take Rate in E-commerce: How to Calculate and Optimize This Crucial Ecommerce Metric appeared first on Tactyqal.