Stop 10 · E-commerce & Performance MarketingTopics · 1/8

E-commerce Funnel Basics

In short

Every online store's revenue comes from three numbers multiplied together: visitors, conversion rate and average order value. Move any one and revenue moves with it.

The specific path from product discovery to purchase in e-commerce — browse, product page, cart, checkout — each step with its own drop-off risk and its own optimization levers.

The blob shopkeeper unfolds a bright patterned saree on a counter piled with colourful fabric.

Think of it like this

The saree shop in the market

Hundreds pass the saree shop window. Some walk in, a few ask to see pieces, fewer try one on, and some buy, maybe two at once. The owner can get more walk-ins, help more people decide, or suggest a matching blouse. Same idea online.

Watch it happen

Revenue = visitors x conversion rate x AOV

Visitors 20,000

Conv. rate 2%

AOV ₹1,000

Revenue ₹4,00,000

1/4This month: 20,000 visitors, 2% buy, each order averages ₹1,000. Revenue is ₹4 lakh.

The big ideas

What you need to know

Store funnel stages

Visit, product view, add to cart, checkout, purchase. Track each as an event.

Average order value

Revenue divided by orders. Bundles, free-shipping thresholds and add-ons raise it.

Repeat purchase rate

Share of customers who buy again. Repeat buyers cost far less to win back than new ones.

Mobile first

Many shoppers browse on phones. Check every funnel step on a small screen.

See it in code

Walk through the code

excel

1B1  Visitors              200002B2  Conversion rate         2%3B3  Average order value   10004B4  Orders            =B1*B2         → 4005B5  Revenue           =B4*B3         → ₹4,00,000

1/3The three levers you can work on.

The simplest e-commerce model there is. Try raising each input by 10% and see which is cheapest for your store to move.

Save yourself the pain

Common mistakes

Oops

Only ever buying more traffic to grow.

Do this instead

Check conversion rate and AOV too. They often grow revenue without extra ad spend.

Oops

Looking at revenue without splitting it into the three levers.

Do this instead

Break it down so you know which one actually changed.

Your mission

Model three growth plans

~20 min

Quick check

A store has 10,000 visitors, a 3% conversion rate and ₹800 AOV. What's revenue?

Go deeper

1Map the full e-commerce funnel for a store you've shopped at, noting each step.
2Identify the step most likely to have the highest drop-off, and why.
3Learn why checkout friction alone can account for a large share of lost sales.