Webinar: The Financial Metrics That Matter for E-commerce

When you're building an e-commerce brand, understanding the numbers behind your marketing, operations and growth is often the difference between scaling sustainably and running out of cash.

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In this webinar, CFOs Graham Davies and Karim Kreaa from Addition break down the metrics that actually matter - and how founders can use them to make smarter decisions.

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This article captures the full discussion, turning the key insights into a clear, practical overview you can refer back to whenever you need clarity on performance, profitability or cash flow.

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The Four Cs of E-commerce: A Framework for Understanding Your Entire Funnel

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Karim opened the session with a simple but powerful model built for modern online brands. Inspired by the classic marketing “four Ps”, the four Cs break down everything that happens from the moment a potential customer sees you to the moment they buy — and come back again.

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The four Cs are:

Catch – Bringing visitors into your online shop
Connect – Making them feel comfortable and confident on your site
Close – Removing friction so they complete their purchase
Continue – Encouraging repeat business and building long-term value

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This structure makes it easy to pinpoint where your funnel is working — and where it’s leaking.

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Catch: Bringing the Right People to Your Store

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Every sale begins with attention. “Catching” a user means drawing them into your online shop through direct or indirect channels.

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Direct catch

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These are actions where a user clicks directly through to your site:

Paid social ads
Google search ads
Organic search
TikTok content
Product listings on marketplaces

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Indirect catch

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Here, a user hears about you elsewhere, then searches for you later:

PR and influencer mentions
Offline advertising
Retail visibility
Word of mouth

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The goal isn’t simply more traffic — it’s quality visitors that actually want what you sell. A million unqualified impressions might look impressive, but they don’t translate into revenue.

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Key catch metrics

Impressions
Click-through rate (CTR)
Cost per click (CPC)
Total visitors over time

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Karim emphasised that improving catch is often the most cost-effective lever for growth. Strong visuals, compelling headlines and a clear call to action all increase the likelihood someone will stop scrolling and click.

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Connect: Building Trust the Moment They Land

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Once you've attracted a user, the next task is helping them feel confident enough to stay. The way your site looks, loads and communicates all shape whether a visitor will explore or exit.

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What strong connection looks like

Clean, mobile-first design (most brands see 70–80% of traffic from mobile)
Clear messaging about benefits
Visible trust signals (certifications, reviews, helpful FAQs)
Fast loading times
Simple navigation without clutter

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If users land but don’t stay, you don’t have a traffic problem — you have a connection problem.

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Key connect metrics

Session duration
Page navigation patterns
Bounce rate
Points of friction (using tools such as heat mapping)

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As Karim noted, if your homepage isn’t convincing people to scroll, explore or click deeper, your traffic budget will never work hard enough for you.

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Close: Reducing Friction at Checkout

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Closing is where revenue is ultimately won or lost — and it’s also where most visitors vanish. Although adding an item to the basket is easy, paying for it is where users start weighing cost, trust and convenience.

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Common reasons for abandoned checkouts

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Karim called out the biggest drivers of drop-offs:

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Unexpected shipping costs
Forced account creation
Complicated checkout forms
Slow loading pages
Limited payment options
Long delivery windows
Technical errors

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The truth is stark: around 70% of baskets are abandoned. Reducing that number even slightly can transform profitability.

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What a smooth close process includes

Guest checkout
Mobile-optimised payment flow
Clear pricing with no last-minute surprises
Localised payment options
Auto-fill through Apple Pay, Google Pay or Shop Pay
Fewer required fields

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Continue: Turning One Purchase into Repeat Revenue

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Acquiring a customer is expensive. Keeping them is where the long-term value lies.

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Karim highlighted that “continue” starts immediately after the sale:

Clear confirmation emails
Transparent shipping updates
On-time delivery
Quality unboxing experience
Helpful follow-up communication

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But the most crucial moment is what he calls the second moment of truth — when the customer actually uses the product. If the product doesn’t delight, no amount of email marketing can fix retention.

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Ways to drive repeat purchases

Subscription options
Seasonal or occasion-based email campaigns
Product launches and bundles
Cross-channel presence (e.g. online + retail)

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Key continue metrics

Repeat purchase rate (average is 15–20%)
Net promoter score (NPS)
Lifetime value (LTV)

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Walking Through a Full Funnel Example

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Karim illustrated how small improvements compound into major differences.

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Scenario 1: The funnel isn’t profitable

£500 ad spend
20,000 impressions
2% CTR → 400 visitors
24 add to carts
8 purchases at £30 AOV
2 repeat buyers at £50

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This resulted in:

LTV: £43
Cost per acquisition: £62 (too high)

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Scenario 2: After optimising catch and connect

Same £500 spend
Improved visuals and messaging
CTR rises to 3% → 600 visitors
More add to carts and purchases
More repeat purchases with higher average order value

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The new outcome:

LTV: £52
Cost per acquisition: £28

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Same spend — dramatically different return. This is why identifying the single weakest part of your funnel has so much impact.

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The Financial View: What Every E-commerce Brand Must Track

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Graham then shifted the conversation to financial metrics that reveal whether a business is “healthy, not just busy”.

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1. Gross margin

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The most important number in e-commerce. It determines what’s left to pay for:

Salaries
Marketing
Rent
Inventory
Debt
Growth initiatives

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Both speakers agreed that below 50% is a red flag for most consumer brands. 60–70% is ideal.

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How to improve your gross margin

Review manufacturing partners regularly
Optimise shipping and logistics
Avoid unnecessary discounting
Revisit pricing annually
Strengthen brand value so customers buy at full price

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2. Operating costs

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These are the costs required to keep the business running — excluding the costs of producing and shipping the product. Keeping them lean protects your operating profit.

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3. Inventory days

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This metric reveals how long stock sits in your warehouse before it sells. The longer it sits, the more cash is trapped.

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For seasonal brands, this is especially important. A swimwear brand, for example, must plan for long off-season periods without letting cash run dry.

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4. Debtor days

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If you sell wholesale or offer payment terms, this measures how long it takes customers to pay you.

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For DTC brands, this number is often low, but for mixed models it’s essential to monitor.

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5. Cash gap

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This is the full working capital cycle — the time between paying your suppliers and receiving cash from your customers. A long cash gap can strangle growth even when sales are strong.

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How to reduce the cash gap

Negotiate better supplier terms
Improve forecasting
Use stock financing or invoice financing
Keep inventory lean
Avoid over-ordering in anticipation of demand

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Graham emphasised that healthy businesses often feel “cash poor” because growth consumes capital quickly. In these situations, raising funds — either equity or debt — becomes essential to maintain momentum.

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When Should a Brand Raise Money?

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If your business is growing, Graham says you’ll always feel like you have no cash. This is normal.

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Raise when:

The product is selling
Marketing is working
You need capital to fulfil demand
The cash gap is widening as you scale

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Don’t raise if:

Sales aren’t coming through
You don’t yet have product-market fit
The issue is operational inefficiency

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Debt can be a smart option for established brands, while early-stage companies may need to start with equity.

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Building the Right Financial Tech Stack

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To track these metrics properly, Graham stressed the importance of:

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Reliable bookkeeping
Integration between Shopify, Amazon, or marketplace platforms and your accounting software
A competent accountant or CFO
A reporting tool such as Fathom or Futrli
Automated systems wherever possible

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Without clean data, all other decisions become guesswork.

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Karim added that platforms like Shopify already provide many of the 4C metrics — but only if brands are actively reviewing and acting on them.

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Final Thoughts

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This webinar highlighted a truth that all successful e-commerce brands learn early: creative marketing brings people in, but strong financial understanding keeps the business alive.

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By focusing on the four Cs — catch, connect, close and continue — and combining them with robust financial metrics, brands can scale with clarity and confidence rather than guesswork.