What Is the State of Ecommerce Store Profitability In 2025
If you’re a current or aspiring ecommerce merchant—you probably think about one thing.
Will online stores be profitable this year? The answer is a silent yes.
While profitability is possible, you must factor in intense competition, rising costs, and more frugal consumers.
As an ecommerce marketing agency—we have first-hand experience with the industry and it’s our task to achieve profitability for our clients.
So let’s talk about key factors that affect it—and get insights on navigating the landscape.
Is Ecommerce Profitable In 2025?
E-commerce can indeed be profitable. Put simply.
But will it be? That’s up to you. The biggest convenience of ecommerce is low overhead and lower initial investment—but the sheer competition can make you lose money quickly.
In fact, some well-known ecommerce brands took a while to become profitable.
For example, Allbirds—an eyewear brand operated at a loss for several years as it invested heavily in marketing and expanding its product offerings to build brand recognition and customer loyalty. Today they are seeing record profits.
Other brands like Rothy and Bonobos had the same fate before they eventually became a profitable brand. And a staple in the industry.
Here’s some things to know about eCom profitability in 2025.
What Are Ecommerce Profit Margins?
To know how profitable your store is, you should understand your margins.
E-commerce profit margins represent the percentage of revenue that remains as profit after all costs associated with running the business are deducted.
Here’s how you can calculate your gross profit margin:
A good gross profit margin for e-commerce is typically between 50% to 70%, with an average of around 41.54% reported by NYU Stern School of Business. That’s, of course, not that easy to achieve.
What are the Hidden Costs of Ecommerce?
We talk about profitability, but there are also hidden costs you may encounter along the way.
Let’s list them real quick:
Return costs, like shipping fees for returns, restocking costs, and potential losses from damaged or unsellable items—can all be detrimental.
Marketing costs, can also escalate quickly, since attracting customers often requires significant investment in promotional strategies.
Website maintenance and administration costs, as you’ll to invest in someone—or yourself—managing everything, paying monthly CMS fees, and similar.
Inventory management costs, which involves costs related to storage, handling, and software solutions for tracking inventory levels.
Taxes and duties, that can vary by region or country.
…of course, there’s plenty more as you grow. Such as packaging costs, customer service expenses as you grow your store, various SaaS tools you’ll have to use, etc.
So take all that into account.
What Is the State of Ecommerce Profitability In 2025
The new year is upon us and the question looms—is it worth it to start an online store now?
Here are some stats that could paint a picture:
There are currently between 12 million and 24 million online retailers globally. This number reflects steady growth in the eCommerce sector, with many new stores emerging alongside some closures as the market evolves. (Source)
Global eCommerce sales are projected to reach approximately $6.8 trillion by 2028, with estimates suggesting that sales could surpass $7 trillion in 2024. (Source)
The global eCommerce market is expected to grow at a compound annual growth rate (CAGR) of 8.9%, indicating robust expansion over the coming years. By 2027, eCommerce is projected to account for nearly 25% of total retail sales worldwide. (Source).
While both online and offline shopping are prevalent, online shopping is increasingly dominating consumer behavior. As of now, about 20% of all retail sales occur online, and this figure is expected to rise. (Source).
But it’s not all roses and butterflies in ecommerce as well.
In a great report by Stacked Marketer, the numbers tell a different tale.
Namely, after the big pandemic boost, we’ve seen a surge of ecommerce stores. However, in 2023 and spilling into 2024, ecommerce growth definitely slowed down:
Post written by: https://topgrowthmarketing.com/are-ecommerce-stores-profitable/
