What is Conversion Rate, and how do you calculate it?
In short – Percentage of visitors who make a purchase. A key marketplace metrics you should track.
Conversion Rate Formula
Conversion Rate = (Number of Purchases ÷ Number of Visitors) × 100%
Conversion Rate measures the effectiveness of the marketplace in turning visitors into buyers. It is critical for evaluating the user experience and sales funnel efficiency.
Improving conversion rates can lead to increased sales without additional marketing spend. This metric guides optimization of the website/app and marketing strategies.
How can you find your Conversion Rate?
You should generally be able to calculate your Conversion Rate with tools you already posess. If that's not the case, signing up for an analytics tool may make sense.
Among others, twosided is one of the tools you could consider. Out-of-the-box, you'll get over two dozens marketplace KPIs and detailed tracking for your supply, demand and other factors that determine marketplace health.
Explore other metrics
Order Frequency
Average number of orders placed by a buyer within a specific period
Cross-Sell Rate
Percentage of transactions that include additional products or services
Supply-Demand Ratio
Ratio of available listings to active buyers
Listing Quality Score
A metric evaluating the quality of product listings based on predefined criteria
User Net Adds
Net increase in the number of users over a specific period