E Commerce Order Fulfillment Business

How Profitable Is An E Commerce Order Fulfillment Business? (Updated for 2024)

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Updated: September 27th, 2024

How Profitable Is An E Commerce Order Fulfillment Business? (Updated for 2024)

So you want to start an e-commerce order fulfillment business?

And the first question that came to your mind was, “well, are e-commerce order fulfillment businesses actually profitable?”

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

Especially considering:

You could start a e-commerce order fulfillment business with as low as $1,500
Based on our data, e-commerce order fulfillment businesses generate an average of $56.3M per year

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 e-commerce order fulfillment business.

Let’s dive in!

Is an e-commerce order fulfillment business profitable?

Yes, an e-commerce order fulfillment business 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 $56.3M per year with an estimated gross margin of 35%, 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 e-commerce order fulfillment business.

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 e-commerce order fulfillment business is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an e-commerce order fulfillment business worth it?

If you’re wondering if a e-commerce order fulfillment business is worth it, the answer is a big YES. With e-commerce order fulfillment businesses, you have the potential to earn $56.3M 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 e-commerce order fulfillment business 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 e-commerce order fulfillment businesses case studies.

Examples Of Profitable E Commerce Order Fulfillment Businesses

Here are a few examples of profitable e-commerce order fulfillment businesses, and a few more details about them:

1. 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 5,743 founders

2. ShipMonk ($300M/year)

Jan Bednar, the CEO and founder of ShipMonk, came up with the idea for his business when he realized the demand for American products from friends and family overseas. He started a package forwarding company called BedaBox, which eventually expanded into order fulfillment after he saw the potential and the need for improvements in the industry. With a focus on technology and automation, Bednar rebranded the company as ShipMonk, revolutionizing the fulfillment industry.

Is it profitable? Yes
How much money it makes: $300M/year

How This Immigrant Entrepreneur Built A $60M/Year Fulfillment Business

ShipMonk, a technology-driven fulfillment center, went from $130K in revenue in 2014 to nearly $30M in 2018 and was named America's Fastest Growing Fulfillment Center, with projected revenue of $60M for 2019.

Read this case study

Read by 18,243 founders

3. OTW Shipping ($4.8M/year)

Nick and Parker, the co-founders of OTW Shipping, started their business in 2020 with a mission to provide eCommerce brands with top-notch fulfillment services. Despite their lack of experience in supply chain or eCommerce, they recognized the potential in the market and quickly scaled their business. In their first 12 months, they achieved $1M in revenue, shipping over 120,000 packages. With plans to triple their numbers in the next year and moving into a larger space, OTW Shipping is poised for continued growth and success.

Is it profitable? Yes
How much money it makes: $4.8M/year
How much did it cost to start: $15K

How Two Broke College Students Built A $1M/Year eCommerce Fulfillment Center

OTW Shipping co-founders Nick and Parker hit $1M in revenue in their first year of operations, providing eCommerce brands with best-in-class fulfillment and shipping out over 120,000 packages, with plans to triple that number in the next 12 months.

Read this case study

Read by 6,620 founders

Learn more about starting an e-commerce order fulfillment business:

Where to start?

-> How much does it cost to start an e-commerce order fulfillment business?
-> Pros and cons of an e-commerce order fulfillment business

Need inspiration?

-> Other e-commerce order fulfillment business success stories
-> Marketing ideas for an e-commerce order fulfillment business

Other resources

-> E-commerce order fulfillment business tips

How much can you make with an e-commerce order fulfillment business?

With a e-commerce order fulfillment business, you can make an average of $56.3M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $1,500. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a e-commerce order fulfillment business make a week?

Based on our data, average weekly revenue for a e-commerce order fulfillment business ranges around $1.17M. As such, you could see monthly revenues of $4.69M.

To know if your e-commerce order fulfillment business 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 e-commerce order fulfillment business.

How much do e-commerce order fulfillment businesses owners make?

The income of an e-commerce order fulfillment business 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 e-commerce order fulfillment business is about $1.17M. 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 e-commerce order fulfillment business owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

E Commerce Order Fulfillment Business Profit Margins

Generally speaking, an e-commerce order fulfillment business can expect profit margin of around 35%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of an e-commerce order fulfillment business, 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, e-commerce order fulfillment business 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, e-commerce order fulfillment business owners can ensure long-term sustainability and profitability for their business.

E-commerce order fulfillment business owner salary

The salary of an e-commerce order fulfillment business 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 e-commerce order fulfillment business, in a prime position, might see an average weekly salary around the ballpark of $411K.

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 e-commerce order fulfillment business may be a promising business to start - but the success of your e-commerce order fulfillment business mostly depends on your effort and your approach.

If you focus on these, you'll have a much higher chance of a profitable e-commerce order fulfillment business.

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Starting An E Commerce Order Fulfillment Business: Everything You Need To Know

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