What is a good profit margin for an online store?

A gross margin above 55% and a net margin between 10% and 20% is a healthy small store. Net below 5% means the business is fragile to any rise in advertising or shipping cost.

In more detail

Work it out including the costs that hide: payment fees, returns, the apps on your Shopify bill, and the discount codes you honour. Stores that believe they run at 30% net are usually not counting three of those four.

What to do about it

Most of the money in ecommerce is made in unglamorous categories bought regularly, not in the ones that photograph well.

Selling online is not passive income. It is a business with stock, customers and a support inbox, and anybody describing it as passive is selling a course.

The number that decides whether a store works is not revenue, it is what is left after the cost of the goods and the cost of getting the customer. Plenty of stores with impressive revenue make nothing.

The mobile app angle

This is where an app earns its place — it exists to make the second and third purchase easier, which is where the profit is.