Ecommerce Tool

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

Pat Walls

•

Updated: October 8th, 2024

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

So you want to start an ecommerce tool?

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

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

Especially considering:

You could start a ecommerce tool with as low as $1
Based on our data, ecommerce tools generate an average of $5.08M per year
You could see gross margins as high as 69% with ecommerce tools

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 tool.

Let’s dive in!

Is an ecommerce tool profitable?

Yes, an ecommerce tool 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 $5.08M per year with an estimated gross margin of 83%, you could expect to recover your investment within 12 months or even less.

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

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 tool is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an ecommerce tool worth it?

If you’re wondering if a ecommerce tool is worth it, the answer is a big YES. With ecommerce tools, you have the potential to earn $5.08M 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 tool 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 tools case studies.

Examples Of Profitable Ecommerce Tools

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

1. Triple Whale ($12.7M/year)

Maxx and his co-founders grew several Shopify brands to 8-figures.
Their journey to success was littered with countless hours of manual labor, as they had to painstakingly input data into spreadsheets to extract valuable insights.
After an extensive search for an automated solution, they were unable to find one that suited their needs.
They decided to develop an in-house tool to streamline the process and soon after attaining success realized they could transform the tool into a significantly more lucrative and impactful SaaS business.
Triple Whale quickly evolved into a SaaS startup.
Two years later, over 5,000+ DTC brands use our software to manage and automate analytics, attribution, merchandising, and forecasting.

Is it profitable? Yes
How much money it makes: $12.7M/year
How much did it cost to start: $1

How Triple Whale Grew From Internal Tool To $12M ARR SaaS For DTC Founders

Case study on Triple Whale, the SaaS platform founded by Maxx Blank, powering 5,000+ DTC brands with over $15 billion GMV, raised $50M in funding, and generates eight figures in revenue, offering analytics, attribution, merchandising, and forecasting solutions for DTC entrepreneurs.

Read this case study

Read by 471 founders

2. Gumroad ($21.2M/year)

Sahil loves building stuff. He really enjoyed the process of taking a problem coming up with a solution, and then shipping a prototype of that solution to see how good his concept was. Before finishing college he had already shipped a dozen products. Most of the time, they weren't that great.

But sometimes something works out really well, and then he has to decide if he actually wants to work on the idea some more. Very rarely, the answer is yes. That was the case with Gumroad. The question at its core was really compelling to him: How easy could one make it to sell something?

Is it profitable? Yes
What's the gross margin? 69%
How much money it makes: $21.2M/year
How much did it cost to start: $0

Gumroad: Revenue, Profit, Growth, & Story Behind It All

Learn how Sahil Lavingia grew Gumroad from a weekend project into an e-commerce powerhouse generating $21.2 million annually, using nothing more than elbow grease and cold emails to drive their early growth.

Read this case study

Read by 950 founders

3. SFKshop ($216K/year)

Nick Sfikas, the 21-year-old founder of SFKshop, came up with the idea for his eCommerce store when he saw an opportunity to help his dad transition from his outside job as a garage door installer to a more comfortable job. With his background in web development and digital marketing, Nick saw the potential for a 7-figure business selling smart home appliances and garage door motors online. Despite facing challenges in the first 6 months, SFKshop is now turning over $17,000 a month and has plans to expand its product range and increase its marketing efforts in 2021.

Is it profitable? Yes
How much money it makes: $216K/year
How much did it cost to start: $1.5K

How I Started A $18K/Month Smart Home Appliances Online Store

A 21-year-old student from Athens who runs an eCommerce store selling garage door motors in Greece has managed to achieve a turnover of $17,000 a month despite being only 6 months old, which he hopes to boost through increased growth of garage door accessories under his own brand.

Read this case study

Read by 5,757 founders

Learn more about starting an ecommerce tool:

Where to start?

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

Need inspiration?

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

Other resources

How much can you make with an ecommerce tool?

With a ecommerce tool, you can make an average of $5.08M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $1. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 12 months.

How much does a ecommerce tool make a week?

Based on our data, average weekly revenue for a ecommerce tool ranges around $106K. As such, you could see monthly revenues of $423K.

To know if your ecommerce tool 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 tool.

How much do ecommerce tools owners make?

The income of an ecommerce tool 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 tool is about $106K. 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 tool owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Ecommerce Tool Profit Margins

Generally speaking, an ecommerce tool can expect profit margin of around 83%. 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 tool, 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 tool 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 tool owners can ensure long-term sustainability and profitability for their business.

Ecommerce tool owner salary

The salary of an ecommerce tool 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 tool, in a prime position, might see an average weekly salary around the ballpark of $87.8K.

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 tool may be a promising business to start - but the success of your ecommerce tool mostly depends on your effort and your approach.

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

Part of

Createing An Ecommerce Tool: Everything You Need To Know

‹

›