eGross Margin is the New Fundamental Metric in Ecommerce
The IRP Team is proud to announce the launch of IRP Version 9 on the 16th November. Version 9 has been built ‘BY TRADERS FOR TRADERS’ - and it is designed for a time where ecommerce success simply means merchant profits.
Up to now there has been a critical accounting gap in ecommerce relating to net profitability. To fill this gap IRP has created two new ecommerce metrics in V9 - eGross Profit and eGross Margin. These are the Gross Profit and Gross Margin after traffic spend.
This new innovation means that net profits are predictable in real time. eGross Profit becomes the real time number to watch. IRP declares that, in the final analysis, ‘Merchant Profit’ is the only ecommerce metric worth talking about.
“eGross Margin is the missing number in ecommerce”
Dan Loughlin - CEO IRP
Opportunities and Costs
Every action in ecommerce has an opportunity and a cost. Costs dictate the merchant’s bottom line profit. Lose control of costs and it’s not long before merchants are treading water - or worse getting swept out to sea.
This is why Version 9 is so novel. It disrupts existing ecommerce by removing the risk of not knowing profitability until it’s too late. IRP fills in the gap between sales and costs, in real time, to bring clarity to the accounting.
Both this work and the IRP Service Marketplace has implications for an industry that is used to obfuscation and needs disrupted. IRP becomes the only ecommerce platform that truly exposes everyone's contribution to profit and all the costs associated with ecommerce transactions.
“Visibility of eGross Margin in real time unifies teams”
Dermott McElhone - CXO IRP Commerce
IRP V9 is a Trading Platform
Sales data is simply one part of the profit picture - the other part is costs. Current applications like Google Analytics miss the cost side of the solution which renders them a bit part player.
IRP is a trading platform that shows both parts of the equation - the sales and the costs to reveal the full picture. This IRP Data then empowers ecommerce managers to take ownership of the P&L - adopting a role that goes beyond branding, marketing or programming.
The spectre of missing traffic costs that has haunted ecommerce since its inception is now gone bringing full disclosure with sunlit uplands ahead.
“IRP provides the platform for ecommerce trading”
James Cave - Director of Trading, Flat White Digital Agency
The Ecommerce Missing Metric
eGross Margin is the new number in IRP Version 9. As traffic spend is highly volatile, eGross Margin (the Gross Margin minus Traffic Costs), is the new, essential accounting baseline that signals success or failure. This critical metric is the early warning for Net Profitability.
Here’s an example, a merchant knows that overheads account for approximately 20% of revenues. Setting an eGross Margin of 30% will guarantee a 10% net profit margin.
Traders then know they have to maintain a Gross Margin and Traffic Spend% to deliver end net profit. This underpins the entire tactics to buying and selling online.
V9 Launches with Innovation at its Core
Traders are gravitating towards the IRP message and technology. There is no other ecommerce system that uses merchant data to expose sales, costs and profit in real time.
Coupled with other major enhancements to IRP Shopper and IRP Marketing Cloud and a new Content Editor - IRP V9 has empowered merchants to take control of their trading with a suite of products build around eGross profit.
Version 9 marks the beginning of a new era of Connecting People, Data and Profit.
V9 is on Early Release with feedback partners - it will be on Public Release in Q1 2024. Full documentation and release notes will be available prior to the IRP Version 9 Public Release.
