In developing our next generation of web analytics for merchandising, we’d like to compare notes with other online merchants who believe they have a sophisticated approach.  We’re looking for a company that has a well developed sense of whether GMROI or contribution index or net sales, or, whatever, is the best way to measure ROI on web merchandising (particular on web-only products that don’t appear in the company’s catalogs or in its stores).
 
We’ve got some measures we like.  But we’re taking the forward-looking approach that our web analytics (not the Coremetrics tools we already use, but our own internal profitability measures) should be every bit as sophisticated as the catalog analytics which we’ve mastered over a longer period of time.  I’d like share thoughts with some peers who are after the same thing - or think they have something that works.     

Specifically, this question has more to do with merchandise and product development rather than marketing and on-site merchandise manipulation.  We want to know whether a given web-only product “works” and how to measure whether it’s working.  Does the “Long Tail” theory mean “everything” works?  Or should we only “bother” with items that cross a certain bar?  What criteria to use?  Sure GMROI might be fine for product we own in inventory — but what about drop-ship products?  How do I judge whether a given drop-ship product (for which I don’t have inventory carrying cost) is “worth” maintaining on the web site?