Ecommerce Store

How Profitable Is An Ecommerce Store? (Updated for 2024)

Pat Walls

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Updated: September 1st, 2024

How Profitable Is An Ecommerce Store? (Updated for 2024)

So you want to start an ecommerce store?

And the first question that came to your mind was, “well, are ecommerce stores actually profitable?”

With a market size of $2.72T - there’s plenty of business to go around.

Especially considering:

You could start a ecommerce store with as low as $2
Based on our data, ecommerce stores generate an average of $3.44M per year
You could see gross margins as high as 70% with ecommerce stores

There’s money to be made. Don’t worry.

But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a ecommerce store.

Let’s dive in!

Is an ecommerce store profitable?

Yes, an ecommerce store is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.

For instance, since average revenue is $3.44M per year with an estimated gross margin of 65%, you could expect to recover your investment within 7 months or even less.

But of course, it all comes down to how much you earn compared to the potential revenues of your ecommerce store.

To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.

Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your ecommerce store is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an ecommerce store worth it?

If you’re wondering if a ecommerce store is worth it, the answer is a big YES. With ecommerce stores, you have the potential to earn $3.44M per year (this is based on data reported by real founders).

Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.

With a market size of $2.72T, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.

Of course, you must learn and understand every aspect of running a ecommerce store to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.

You might want to consider reading more specifics about successful ecommerce stores case studies.

Examples Of Profitable Ecommerce Stores

Here are a few examples of profitable ecommerce stores, and a few more details about them:

1. Tuft & Paw ($15.6M/year)

Jackson Cunningham, the founder of tuft + paw, came up with the idea for his business when he rescued a cat and realized there were no high-quality cat products available. He started by importing beautiful cat furniture and eventually launched a successful Kickstarter campaign for a modern litter box, raising over $150k. Today, tuft + paw is thriving, with monthly sales exceeding $300k and $2M in funding from investors like Alexis Ohanian.

Is it profitable? Yes
How much money it makes: $15.6M/year
How much did it cost to start: $1K

This Designer Cat Furniture Brand Does Over $300K/Month In Sales

Tuft + Paw, a modern cat brand founded by Jackson Cunningham, started as an importer of exquisite cat furniture and, after raising $150k from Kickstarter, graduated to manufacturing products, seeing sales grow to over $300k per month and now raising $2m from famed investors including Alexis Ohanian.

Read this case study

Read by 6,443 founders

2. House of Kook ($180K/year)

Amy McKenzie and Kirsten Dodds, founders of House of Kook, came up with the idea for their furniture and interior design business after becoming bored with the offerings in the industry. They wanted to shake up the interior aesthetic and create unique and interesting spaces and furniture. They launched their business in August 2021, and within a year, completed over 10 successful projects and launched their first furniture range.

Is it profitable? Yes
How much money it makes: $180K/year
How much did it cost to start: $12K

How We Leveraged Our 20 Years Of Experience To Start A $15K/Month Furniture And Interior Design Studio

House of Kook is a South African furniture and interior design studio founded in 2021 that have completed over 10 successful projects and launched their first furniture range, all in just over a year, through word of mouth and social media marketing.

Read this case study

Read by 2,007 founders

3. Velvety ($288K/year)

Lorena saw a gap in the industry and she wanted to introduce the concept of ethical fashion to the largest amount of Australian people as possible.

Is it profitable? Yes
How much money it makes: $288K/year
How much did it cost to start: $10K

How I Started A $24K/Month Ethical Fashion Marketplace

Velvety is a sustainable and ethical online store that offers vegan fashion and lifestyle products, that has grown to become profitable after 3 years in business thanks to Facebook and Pinterest Ads, as well as SEO and hired professionals.

Read this case study

Read by 2,228 founders

Learn more about starting an ecommerce store:

Where to start?

-> How much does it cost to start an ecommerce store?
-> Pros and cons of an ecommerce store

Need inspiration?

-> Other ecommerce store success stories
-> Marketing ideas for an ecommerce store

Other resources

-> Ecommerce store tips

How much can you make with an ecommerce store?

With a ecommerce store, you can make an average of $3.44M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $2. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a ecommerce store make a week?

Based on our data, average weekly revenue for a ecommerce store ranges around $71.7K. As such, you could see monthly revenues of $287K.

To know if your ecommerce store achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.

Learning your weekly profit can also show whether you're hitting your target goal for your ecommerce store.

How much do ecommerce stores owners make?

The income of an ecommerce store owner can vary depending on various factors such as location, size, competition, and the owner's business skills.

But to give you some idea, the weekly revenue of an established ecommerce store is about $71.7K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.

While the potential for earning a good income as an ecommerce store owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Ecommerce Store Profit Margins

Generally speaking, an ecommerce store can expect profit margin of around 65%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of an ecommerce store, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.

However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, ecommerce store owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, ecommerce store owners can ensure long-term sustainability and profitability for their business.

Ecommerce store owner salary

The salary of an ecommerce store owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established ecommerce store, in a prime position, might see an average weekly salary around the ballpark of $46.6K.

But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.

Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.

Conclusion

In a nutshell, based on many of our examples, a ecommerce store may be a promising business to start - but the success of your ecommerce store mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable ecommerce store.

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Starting An Ecommerce Store: Everything You Need To Know

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