The ecommerce metrics that matter, according to ProfitPeak's Carla Penn-Kahn

Most ecommerce dashboards are built around growth: revenue, traffic, return on ad spend. Carla Penn-Kahn would rather you looked somewhere else. She ran four ecommerce businesses over about 12 years, scaled them, sold all four, and is now co-founder and CEO of ProfitPeak, a profit optimisation platform for Shopify brands (and a brand we've worked with at UntilNow).

On Now or Never, we asked her which ecommerce metrics founders should review every week. Her answer was short, a little controversial, and centred on profit and cash rather than vanity growth. Here's what she watches, and why.

Why ecommerce metrics have shifted from growth to margin

Carla started in ecommerce in 2010. Back then she could generate around 80% of revenue organically and only paid for about 20% of her traffic. By the time she exited in 2023, that had flipped: 80% paid, 20% organic. Her cost to acquire a customer through Google Ads went from around $3 when she started to $68 by the end.

That shift changes the maths of an ecommerce business completely. You need to grow your margins over time just to justify what you're paying to acquire customers. But some things haven't changed at all:

"what holds true is obviously running a business that's profitable and cash flow efficient."

She saw the pressure first-hand coming out of COVID. During lockdowns, customers stuck at home spent freely and average order values were sky high. Afterwards, acquisition costs rose sharply and, as mortgages went up, order values fell. Her businesses had to work out how to get back to profitability, which is where the idea for ProfitPeak started.

The weekly ecommerce KPIs Carla actually reviews

When we asked what every ecommerce founder should look at weekly, Carla didn't hesitate.

Your three lines of profitability

"So everything is your three lines of profitability, CM1, CM2, CM3. You should be reviewing those every single week."

CM1, CM2 and CM3 are contribution margin layers. Definitions vary a little between businesses, but broadly CM1 is revenue minus the cost of goods, CM2 takes off variable costs like fulfilment and payment fees, and CM3 takes off marketing. Watching all three each week shows you where profit is leaking, not just whether revenue went up.

Cash conversion cycle, cash at bank and runway

Profit and cash aren't the same thing, and ecommerce is where the gap bites hardest.

"running a profitable business doesn't mean you have enough cash to invest in your next product drop."

So alongside margin, Carla tracks the cash conversion cycle, cash at bank and runway. She has a story that shows why. In one of her businesses, the marketing team kept complaining that bestsellers were out of stock. The inventory team pointed out there were 15,000 products in stock. Marketing needed 200 specific products, and there was no cash to reorder them until some of the other 15,000 moved. Product, marketing and margin were pulling against each other because nobody could see how they connected.

The metric she'd stop watching: ROAS

This is the controversial one. Carla doesn't think founders should be looking at return on ad spend.

"ROAS doesn't mean anything to your business long term. It just means that the algorithm's favoring you right now from a revenue perspective."

A strong ROAS can sit on top of a business that's losing money once fulfilment, discounts and the rest of the journey are counted. It tells you how the platform is treating you this week, not whether you're building something durable.

The qualitative ecommerce metrics most founders skip

Carla also wants founders looking well beyond the numbers. Has sentiment about your brand shifted? Are there negative Reddit threads about your products, which can shape what ChatGPT says when someone asks about you? Has a new player entered your category, or has a competitor launched a new line?

Her argument is that being across all of this gives you a better read on future revenue than today's numbers or ROAS. ProfitPeak builds this sentiment analysis into the product, but she's clear you can start in a basic way with ChatGPT, Claude or any of the AI platforms. Her example: if you're Princess Polly, how does sentiment compare with White Fox, Fashion Nova and the rest of your competitors, and where are the opportunities?

Plan for AI channels to get expensive

Everyone is thinking about how to show up in ChatGPT and Claude as they become search engines in their own right. Carla's warning is to forecast what happens when those channels start monetising traffic. She's heard ChatGPT is looking at a 4% transaction fee, which would stack on top of a Shopify fee that's already around 2% for most customers.

Four percent might sound small next to affiliate commissions. But an AI assistant won't be a one-click path to purchase. It'll be one step in a journey that may have started on TikTok or Meta, with a Google ad along the way, and every step costs something. Her Google Ads history is the precedent: assume costs rise, and ask now whether your margins can absorb it.

Ignore the vanity numbers, including valuation

Carla applies the same discipline to ProfitPeak, which is venture funded. Founders constantly ask her what valuation she raised at. Her answer: "It's paper money." The questions she'd rather hear are about customers. What do they think of what you're building? Is product usage growing? Is the customer base growing?

She still thinks like a bootstrapped founder, too. Every new hire is tied to the revenue milestone that justifies it and its effect on burn, so the business doesn't have to keep raising for the sake of raising.

Brand is where ecommerce margin lives

Carla's closing point ties everything together. If acquisition keeps getting more expensive and AI makes products easier to copy, the thing that protects margin is brand.

"your ability to build margin is in your brand. It's not necessarily in your product because everyone can manufacture the same product, but your ability to charge more for the product than Temu is in your brand."

That's a view we share at UntilNow. AI makes it fast and cheap to launch a store or a product that looks like everyone else's, which makes a distinctive brand more valuable, not less. Brand is what earns the premium, and it's often the difference between a healthy CM3 and a race to the bottom. If you need to make that case internally, our piece on the ROI of brand strategy is a good start, and building great brands in a world of AI slop covers what makes a brand stand out when everything else is generated. When you're ready to invest, that's what our branding work is built for.

A weekly scorecard, Carla style

• CM1, CM2 and CM3, every week.
• Cash conversion cycle, cash at bank and runway, because profit isn't cash.
• Sentiment: reviews, Reddit, how AI tools describe you, and what competitors are launching.
• Not ROAS on its own. It tells you about the algorithm, not the business.
• Whether your margins can survive rising acquisition costs, including fees from AI channels.

The ecommerce metrics that matter are the ones that tell you whether the business makes money and has the cash to keep going. For the full conversation, including Carla's move to the US and how she now hires with one-day trials, listen to the episode with Carla Penn-Kahn on Now or Never.