Metric Definition
Channel diversification
Track from
Revenue by channel
Revenue by channel segments total sales by the distribution channel through which they occur, including online store, point of sale, social commerce, marketplaces, and wholesale. It reveals channel contribution, concentration risk, and diversification opportunities.
7 min read
What is revenue by channel?
Revenue by channel breaks down your total sales into the specific channels where transactions occur. For a Shopify merchant, this typically includes the online store, point-of-sale locations, social commerce (Instagram, Facebook Shops), marketplace integrations, and wholesale or B2B channels.
This metric serves two purposes. First, it reveals which channels are growing and which are declining, guiding investment decisions about where to allocate resources, inventory, and marketing spend. Second, it exposes concentration risk. A business generating 95% of revenue from a single channel is vulnerable to any disruption on that platform.
Beyond revenue volume, channel analysis should include margin comparison. Some channels carry higher transaction fees, fulfilment costs, or promotional requirements that reduce net profitability. A channel contributing 20% of revenue but only 10% of profit after fees may not warrant the same investment as one contributing 15% of revenue and 25% of profit.
Compare per-channel average order value and conversion rate. Channels with lower volume but higher AOV and conversion may be underinvested and worth scaling.
Common channel breakdown
| Channel | Typical revenue share | Key consideration |
|---|---|---|
| Online store | 60% to 80% | Highest margin, full brand control |
| Marketplaces | 10% to 25% | Broader reach, higher fees, less data |
| Social commerce | 3% to 10% | Growing fast, impulse-driven purchases |
| Point of sale | 5% to 20% | Higher AOV, local customer relationships |
| Wholesale / B2B | 5% to 15% | Volume orders, lower margin, predictable |
How to optimise channel revenue
- 1
Diversify away from single-channel dependency
Set a target that no single channel exceeds 70% of total revenue. Gradually invest in secondary channels through dedicated resources, channel-specific content, and tailored product assortments.
- 2
Optimise each channel for its strengths
Each channel has different customer behaviours. Social commerce suits impulse and discovery-driven purchases. Marketplaces suit comparison shoppers. Your online store suits loyal customers. Tailor product mix and messaging to each context.
- 3
Track net margin by channel, not just revenue
Factor in transaction fees, fulfilment costs, returns, and marketing spend for each channel. Optimise for profit contribution rather than revenue volume alone.
- 4
Use cross-channel customer identification
Connect customer identities across channels to understand the full customer journey. A customer who discovers you on a marketplace and later purchases directly from your online store is more valuable than either channel shows alone.
- 5
Invest in emerging channels early
New channels (live shopping, TikTok Shop, B2B portals) offer lower competition and often preferential placement for early adopters. Establishing a presence before saturation creates lasting advantage.
Related metrics
Gross Merchandise Volume
GMV
Financial Metrics
Metric Definition
GMV = Number of Transactions x Average Transaction Value
Gross merchandise volume is the total monetary value of all goods sold through a marketplace, ecommerce platform, or payment processing channel over a given period. It represents the full transaction value before deducting fees, returns, discounts, and taxes. GMV is the primary scale metric for marketplaces and platforms because it captures the total economic activity flowing through the business, regardless of how much the platform retains as revenue.
Marketing Channel Attribution
Revenue credit allocation
Ecommerce & Marketplace MetricsMetric Definition
Marketing channel attribution assigns revenue credit to the marketing channels that influenced each purchase. It determines which channels drive profitable customers and guides budget allocation across paid, organic, social, email, and referral sources.
Revenue by Geography
Regional performance
Ecommerce & Marketplace MetricsMetric Definition
Revenue by geography breaks down sales by customer location, including country, region, or city. It reveals market penetration, identifies expansion opportunities, and highlights geographic concentration risk.
Store Conversion Rate
Visitor-to-buyer efficiency
Ecommerce & Marketplace MetricsMetric Definition
Store Conversion Rate = (Purchasing Visitors / Total Unique Visitors) x 100
Store conversion rate is the percentage of unique visitors who complete at least one purchase. It is the broadest measure of how effectively your store converts browsing traffic into paying customers and one of the highest-leverage metrics for e-commerce growth.
Understand where your revenue really comes from
Build a metric tree that segments revenue by channel alongside margin, AOV, and conversion rate so your team can invest in the channels that deliver profitable growth.
