Many entrepreneurs wonder about how fast does the average ecommerce business grows and how much revenue can an ecommerce store expect to generate over time. The average consumer is buying online more than ever before. According to Capital One Shopping Research, American online spending hit $1.24 trillion in 2023, which is not incredibly surprising, since the same data suggests 79% of Americans shop online. Ecommerce revenues worldwide are expected to approach $8 trillion by 2027, and ecommerce events (such as, Amazon’s Prime Day) garner an astonishing amount of online sales. 

All of this buzz around ecommerce has many would-be business owners wondering what they can expect to earn as revenue, and how revenue can change over time. If you are a store owner or future store owner that is curious about how much ecommerce stores earn through digital sales then Clearco has compiled the data for you. Here are the most up-to-date figures and insights pertaining to ecommerce revenue in 2024.

What does the average ecommerce store generate from digital sales?

Most Amazon sellers make at least $1000.00 per month in sales. On the other end of the ecommerce startup spectrum, one study of 99 direct-to-consumer (DTC) ecommerce startups shows an average annual revenue of around $930k in the first two years. Ecommerce startup revenue of $930k is gross, and doesn’t consider costs. When costs are factored in, first year profits in the report dipped to around 10% of gross sales.

It was shown in the report that the average ecommerce revenues each year grow at a slower pace compared to other industries included in the report during years 3 and 4 mostly due to the new business’s ecommerce shipping costs, warehousing, or other logistics which can turn into a challenge as sales volume increases. Other industries, such as software startups or marketplace sites like Amazon, are slower to get going in the early years but see more consistency later as these founders gather steam due to scalability or having already solved for the complex logistics challenges. 

How to research and determine an ecommerce sector’s expected revenue

For those curious about using ecommerce store revenue to compare competitors or other merchants, it is recommended to research within the same industry as the target store. 

For example, an ecommerce merchant selling sandals might find its sales numbers included in other aspects of retail, such as overlaps with footwear, seasonal apparel, or vacation and travel products. The average year-over-year growth for companies in the fashion or apparel, shoes, and accessories industries is around 14%. The same growth metric for sales of fine jewelry is 8-12%.

Other industry data, such as public IRS tax data, is difficult to dissect for ecommerce-specific businesses, since ecommerce businesses are more likely to be included in various industry sectors than in the ‘direct to home’ industry profile.

Net revenues and profit margins in ecommerce sales

A great product, combined with the right profit margins, can make for a highly profitable ecommerce business – especially if the business is able to order additional inventory before peak season for sales. 

When looking at average ecommerce sales, it’s important to consider that it’s ultimately profits that will represent the true value of these ecommerce sales. Ecommerce business owners are likely already familiar with concepts like profit margins, operating expenses, cash flows, and cost of goods sold. 

Gross profit margin can be calculated by taking the revenue from sales and subtracting the cost of goods sold (COGS), then divided by the revenue again to get a percentage. Gross profits are the revenues from a sale of goods (such as charging $50 for a t-shirt) less the cost of the goods themselves (ie. the t-shirt cost $10, and it cost $5 to print a design, so the cost per shirt is $15).

Note that COGS does not include additional costs such as in shipping the goods to customers or advertising the product. In the first example above, the business earns $1 on each $50 sale, for a gross profit margin of 2%. This may not even cover other costs (such as shipping). Gross profit margins for an average ecommerce business at Clearco range from 40-70%. The NYU’s Stern School of Business keeps a database of industry profit margins by sector – on average, and in retail, the gross profit margins referenced tend to hover around 30-35%.

Profit margins must be healthy if the business is going to survive. It doesn’t matter if an ecommerce store has a hundred sales by the end of its first month if the items sell for $50 and cost the business $49 to make - or worst, is spending more to acquire the customer and make the product than they’re earning on the sale. This pricing strategy might work if the items are a loss leader for other items, but 2% margins aren’t usually ideal. Companies growing quickly can sometimes afford to offer products at a loss if they make money from repeat customers (for example, a “first month free” trial)  – in this case, looking at some variation of cohort contribution margin might be appropriate.  

Ecommerce sales continue to grow so it’s key to track revenue and performance of various sectors within

Although the explosion of online shopping has led to considerable interest in ecommerce sales, little data exists on how much each ecommerce store earns in a given period of time. This gap in available data speaks to the diversity of ecommerce business models. From children’s clothing to classic vinyl, the ideal revenue estimates or profit margins for ecommerce businesses are hard to define.

Ecommerce sales in the United States have grown by about 2% in the first quarter of 2024. With a total sales volume of $289.204 billion and 15.9% of the total retail sales in the US, ecommerce revenues are on the rise as a whole. With a wide variety of different products, goods, and services sold online, the best estimate of average ecommerce store revenues and online sales is one that keeps the business’s unique products and industry in mind.