Location. Location. Location.

The oft-repeated cliché of the real estate business also holds for the retail industry, where property usually represents the largest non-goods expense and the most crucial component of the business formula.

But if "L-cubed" is the magic elixir of the physical world, what is its corollary in the virtual world of eCommerce? And what benchmarks are available to measure success, as “sales per square foot” does in traditional retailing?

The good news is that eCommerce is ripe with high-value indicators. And most of them revolve around customer behavior – which is a lot more interesting and actionable than reading the income statement and pacing off the room.

The most common benchmark for eCommerce sites is traffic to the Web site, usually measured in user visits and page views. Compare your traffic (and traffic growth) to the industry as a whole and you’ll have one indicator of your success. Better yet, compare traffic to eCommerce sites in your category (consumer electronics, toys, cosmetics, jewelry) to get a feel for how you are faring against your direct competitors. A number of Internet research organizations, such as shop.org and Forrester Research, track such numbers in major eCommerce categories.

Of course, traffic alone does not make a successful eCommerce site. The wrong traffic, visiting for the wrong reasons, will not purchase goods or services. So the percentage of customers who purchase becomes a crucial benchmark for the eCommerce Web site. That figure is usually referred to as the conversion rate.

Internet order conversion rates are notoriously low. Most research suggests that, on average, as few as 2 percent of eCommerce site visits result in a purchase. The reasons for that low number are many, including (1) poorly targeted ads that drive the wrong traffic to a site and (2) confusing checkout sequences that cause all but the most stalwart eShoppers to “bail out” before completing the order. This phenomena is often referred to as "shopping cart abandonment."

One of the most interesting eCommerce benchmarks is the behavior of repeat buyers, and their impact on the success of eCommerce sites. Intuitively, we all know that a loyal customer is the best customer. But this is being proven empirically by eCommerce sites.

Stuides conducted by Boston Consulting Group for shop.org have found that repeat buyers tend to spend significantly more, on average, than first-time purchasers at eCommerce Web sites. The loyalty factor becomes all the more important when you consider the cost of acquiring a new Internet customer. To avoid the expense of using traditional mass media or Web keyword and banner purchases to acquire customers, the effective eCommerce company puts programs in place to retain customers. Programs such as regular e-mail newsletters and sales advisories, as well as frequent buyer programs, are used by successful eCommerce sites.

There is no shortage of benchmarks in eCommerce, in part due to the infinitely measurable nature of the Internet business. For the inventive manager, there are plenty of ways to tinker with the eCommerce formula and fine-tune results. And it’s a lot cheaper than trying a different intersection or mall.