Ecommerce Brand

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

Pat Walls

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Updated: September 13th, 2024

So you want to start an ecommerce brand?

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

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

Especially considering:

You could start a ecommerce brand with as low as $8
Based on our data, ecommerce brands generate an average of $959K per year
You could see gross margins as high as 70% with ecommerce brands

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 brand.

Let’s dive in!

Is an ecommerce brand profitable?

Yes, an ecommerce brand 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 $959K per year with an estimated gross margin of 40%, 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 brand.

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

Is an ecommerce brand worth it?

If you’re wondering if a ecommerce brand is worth it, the answer is a big YES. With ecommerce brands, you have the potential to earn $959K 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 brand 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 brands case studies.

Examples Of Profitable Ecommerce Brands

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

1. Bro Glo ($3.6M/year)

After a joke about his pale complexion during his honeymoon, Jaron decided to develop a self-tanner for men. Together with Tom and Joe, they launched Bro Glo in 2021 during the pandemic, achieving rapid success with average monthly revenues of $50K and a viral TikTok account that now boasts nearly 100k followers.

Is it profitable? Yes
How much money it makes: $3.6M/year
How much did it cost to start: $974

The TikTok Strategy That Took This E-Commerce From Idea To $50K/Month

Bro Glo is a self-tanning company for men that started during the pandemic, earned an average monthly revenue of $50k within a year and a half, and owes its rapid popularity to TikTok.

Read this case study

Read by 5,784 founders

2. Bluebird Provisions ($635K/year)

After being told he would never run again due to a foot injury, the founder of Bluebird Provisions Bone Broth healed his foot and got back to winning ultra marathons using bone broth. Fueled by his conviction to share this healing elixir, he quit his job and started Bluebird Provisions. Now, the brand is the fastest-growing bone broth brand in North America, with monthly revenues of $49,000 and a 5000% increase in customer base since its inception.

Is it profitable? Yes
How much money it makes: $635K/year
How much did it cost to start: $30K

How I Healed My Injury With Bone Broth And Bootstrapped A $540K/Year Business

Bluebird Provisions Bone Broth is North America's fastest-growing bone broth brand, doing 49,000 per month and growing 50% YoY, with 5000% growth in customer base since starting, thanks to an SEO-focused strategy, email marketing, referrals, and Amazon.

Read this case study

Read by 3,894 founders

3. On Cloud Faith ($60K/year)

Jonathan Waldmann, his then-girlfriend Ilona, and her mother Sonja started their business in 2012, initially selling handmade Gimp bracelets and headbands on Etsy. They later transitioned to crystalized wedding apparel and eventually expanded their product categories to include travel shirts, party shirts, bridal shirts, and engagement shirts. They have made an impressive $7.2 million in sales since their inception with a starting investment of $5,000.

Is it profitable? Yes
How much money it makes: $60K/year
How much did it cost to start: $5K

How I Turned A $5K Investment Into A $7.2M Apparel Brand

This case study follows the story of a successful online business that has made 7.2 million dollars in sales since 2012, with profits of around 30-45%, and the founders share insights on lessons learned and tools used.

Read this case study

Read by 8,709 founders

Learn more about starting an ecommerce brand:

Where to start?

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

Need inspiration?

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

Other resources

How much can you make with an ecommerce brand?

With a ecommerce brand, you can make an average of $959K revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $8. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a ecommerce brand make a week?

Based on our data, average weekly revenue for a ecommerce brand ranges around $20K. As such, you could see monthly revenues of $79.9K.

To know if your ecommerce brand 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 brand.

How much do ecommerce brands owners make?

The income of an ecommerce brand 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 brand is about $20K. 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 brand owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Ecommerce Brand Profit Margins

Generally speaking, an ecommerce brand can expect profit margin of around 40%. 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 brand, 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 brand 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 brand owners can ensure long-term sustainability and profitability for their business.

Ecommerce brand owner salary

The salary of an ecommerce brand 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 brand, in a prime position, might see an average weekly salary around the ballpark of $7.99K.

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

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

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Starting An Ecommerce Brand: Everything You Need To Know

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