1. What is Conversion Rate?

Conversion rate is the percentage of website visitors who take a desired action. The desired action varies among different websites.

In the dropshipping business, the desired action is order placement. So, the conversion rate is the percentage of buyers over store visitors. For example, if the conversion rate is 5.5%, it means that there are 55 out of 1000 visitors placing orders. 

The conversion rate is calculated as follows:

Conversion Rate = (Total buyers/Total visitors)*100%

This figure allows merchants to keep track of their business performance, and all of them expect a high conversion rate.

Besides, many merchants should pay attention to one more rate: buy-product rate. This is the percentage of buyers over viewers of a particular item. If an item has a low buy-product rate, merchants should modify its product page (by editing its description, giving a discount, or uploading more appealing photos). If that item’s buy-product rate remains low in the long run, merchants should stop selling it.

2. What can conversion tracking help?

Conversion tracking is essential because it brings merchants insights into how to improve their store.

For example, if a merchant store has high traffic, but the conversion rate is very low, his online store has serious problems. It explains that his marketing campaigns are working well in drawing Internet users to his store, but the store itself doesn’t run well. So, it alerts merchants that it is time to innovate their store.

In general, there are tons of reasons why visitors don’t place an order. They can be store navigation/design, product price, product description, shipping fees, etc.