Online Retail Store

How Profitable Is An Online Retail Store ? (Updated for 2024)

Pat Walls

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Updated: October 7th, 2024

How Profitable Is An Online Retail Store ? (Updated for 2024)

So you want to start an online retail store ?

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

With a market size of $4.25T - there’s plenty of business to go around.

Especially considering:

You could start a online retail store with as low as $20
Based on our data, online retail stores generate an average of $2.07M per year
You could see gross margins as high as 75% with online retail 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 online retail store .

Let’s dive in!

Is an online retail store profitable?

Yes, an online retail 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 $2.07M 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 online retail 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 online retail store is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.

Is an online retail store worth it?

If you’re wondering if a online retail store is worth it, the answer is a big YES. With online retail stores, you have the potential to earn $2.07M 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 $4.25T, 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 online retail 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 online retail stores case studies.

Examples Of Profitable Online Retail Stores

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

1. Trunki ($12M/year)

Rob Law, founder of Trunki, came up with the idea for a ride-on suitcase for kids while browsing through a department store during his time as a product design student. He realized that ride-on toys wasted a lot of space and decided to create a suitcase that maximized internal space while also entertaining kids. After facing setbacks, such as a failed licensing deal and a humiliating experience on Dragons' Den, Law persevered and turned Trunki into a global brand, selling over 4 million suitcases in over 100 countries.

Is it profitable? Yes
How much money it makes: $12M/year
How much did it cost to start: $15K

How An Innovative Kids Suitcase Design Turned Into A $12M/Year Company

Trunki CEO and Founder Rob Law turned his innovative ride-on kids suitcase design into a global lifestyle brand, selling over 4 million suitcases in over 100 countries and earning £9.5 million in 2019, by understanding his customers and prioritizing customer service and reviews.

Read this case study

Read by 15,472 founders

2. Origen RV Accessories LTD. ($6.96M/year)

Gord Wilson, the founder of Origen RV Accessories, came up with the idea for the world's only permanent jack pad after being diluted out of a majority ownership position in his previous successful RV accessory company. In 2015, Gord approached his three grown sons with the concept for the permanent jack pad, and they used their combined industry experience and digital marketing expertise to launch the company with just three SKUs. Since then, Origen RV Accessories has experienced impressive growth, grossing over $130,000 in its first year and achieving an average year-over-year growth of 124%.

Is it profitable? Yes
What's the gross margin? 65%
How much money it makes: $6.96M/year
How much did it cost to start: $50K

How We Created The World's Only RV Permanent Jack Pad

Origen RV Accessories has grown by an average of 124% YoY, grossing over USD 130,000 in the first year, and now carries over 40 SKUs, with six major distributors, and more than 300 RV dealerships, recently recording a NPS of 88 with their unique RV SnapPads.

Read this case study

Read by 11,034 founders

3. The Hygiene Company ($6.25M/year)

Jonathan Bradford came up with the idea for his hygiene solutions business, Wipepod, when he was at a local gym and realized there was no convenient way to access disinfectant wipes to clean the equipment. He believed that providing a nice-looking dispenser that held a good number of antibacterial wipes would enhance cleanliness in organizations and improve compliance with hygiene practices. Since then, Wipepod has grown and expanded its manufacturing capabilities, supplying gyms, offices, universities, and more with their product worldwide.

Is it profitable? Yes
How much money it makes: $6.25M/year
How much did it cost to start: $65K

How My Forward-Thinking Hygiene Solutions Company Is Thriving In COVID-19

A hygiene solutions company founded by Jonathan Bradford now earns £500k/month, after years of developing a wall-mounted antibacterial wipe dispenser that is used in health clubs, workplaces, and in over 100 locations worldwide, and also developing an electronic washroom hygiene monitor.

Read this case study

Read by 9,630 founders

Learn more about starting an online retail store :

Where to start?

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

Need inspiration?

-> Other online retail store success stories

Other resources

How much can you make with an online retail store ?

With a online retail store , you can make an average of $2.07M revenue per year (based on data reported by real businesses).

You can start with an initial investment as low as $20. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.

How much does a online retail store make a week?

Based on our data, average weekly revenue for a online retail store ranges around $43.2K. As such, you could see monthly revenues of $173K.

To know if your online retail 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 online retail store .

How much do online retail stores owners make?

The income of an online retail 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 online retail store is about $43.2K. 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 online retail store owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.

Online Retail Store Profit Margins

Generally speaking, an online retail store 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 online retail 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, online retail 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, online retail store owners can ensure long-term sustainability and profitability for their business.

Online retail store owner salary

The salary of an online retail 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 online retail store , in a prime position, might see an average weekly salary around the ballpark of $17.3K.

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

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

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