What is the best e-commerce business to start?
The best type of e-commerce business to start is different for each person. Starting a business is hard, risky, and can take a long time to payoff, so the first thing you should do is focus on an e-commerce business that you are interested and passionate about. If you are selling watches, but you could care less about a quality watch and don’t ever wear watches yourself, when you hit a difficult time in your business you are likely to give up. So start something you are excited about. Beyond that, I would suggest that you try to sell as few items as possible, sell smaller, lightweight items that won’t kill your margins with shipping costs, and find a niche that you think you can really stand out from the competition in. You need to be able to answer the question, “why would someone buy from your website instead of Amazon?” Our eCommerce and hardware + subscription revenue model spreadsheet can help!
Is e-commerce really profitable?
The e-commerce business can be quite competitive and put constant pressure on your ability to operate profitably. According to Glew, the average ecommerce gross profit margin is 40%. In order to determine your potential profitability you need to create a financial model that includes assumptions for your operating expenses like rent, shipping, advertising, and professional services, and then based on your specific gross profit margins you will be able to calculate how many units or what dollar amount of sales you will need to reach in order to breakeven. For example, if you had $100,000 in operating expenses and 40% gross profit margins, you would need to sell $250,000 in order to generate $100,000 in gross profit and reach breakeven.
How much money does it take to start an ecommerce business?
Starting an ecommerce business can be one of the lowest startup cost businesses to launch. If you are looking to start small, you can start by purchasing some inventory, sending it to Amazon and using their Fulfillment By Amazon (FBA) program and they will list the items on Amazon, store the items for you, and if the item sells, they will ship it to customers and handle all returns as well. If you don’t want to sell on Amazon, you can set up a simple Shopify store and list your items for sale and begin selling for less than $1,000 if you are able to do the Shopify work yourself.
How much revenue do ecommerce startups make?
We completed a study where we pulled revenue data from 99 Direct to Consumer (DTC) Product businesses that were all primarily selling via ecommerce and we found that the average ecommerce startup that was less than 2 years old generated $934,000 per year. Read Direct to Consumer (D2C) Product Startup Revenue Stats: A Study of 99 D2C Product Startups [2022] for more ecommerce revenue stats.
How much revenue per employee should an ecommerce business have?
Our ecommerce revenue study also found that the average DTC Product business generated $558,000 in annual revenue per employee.
