How do you know when a store is working?

When customers come back without being paid for. Repeat revenue rising as a share of the total is the only signal that separates a business from a well-funded advertising campaign.

The reasoning

Watch three numbers monthly: share of revenue from returning customers, contribution per order after all variable costs, and the gap between first and second purchase. All three moving the right way is rare and decisive.

What most people get wrong

Repeat customers are the whole game. Winning a customer costs money; selling to them again costs almost nothing.

Most of the money in ecommerce is made in unglamorous categories bought regularly, not in the ones that photograph well.

Selling online is not passive income. It is a business with stock, customers and a support inbox, and anybody describing it as passive is selling a course.

How an app changes it

This is where an app earns its place — it exists to make the second and third purchase easier, which is where the profit is.