Are e-Commerce Sites Profitable?

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Are e-Commerce Sites Profitable?

The idea that you could make money while you sleep is enticing, and many people get convinced it’s as easy as it sounds. Ecommerce allows you to build passive income, but you have to understand how everything works. The beauty of ecommerce is that you can work from anywhere at your convenience. With a good business strategy, you could make anywhere from hundreds of dollars a day to millions every year. 

The issue many entrepreneurs encounter is that they start their ecommerce businesses then sit back and wait for the profits to roll in. Orders don’t just come, you have to invest your time and money in marketing, streamlining the user experience, and building the trust you need between your brand and customers. If you’re considering venturing into ecommerce, here are a few things to note that could help you launch a profitable business. 

How Successful e-Commerce Entrepreneurs Make Money 

Ecommerce sites are profitable if you pick the right strategy. For some perspective, Amazon and eBay are just examples of ecommerce sites you could borrow ideas from. But instead of taking a similar approach, you could narrow down to a micro-niche that will distinguish you from all other general retailers on the market. This is how you build a brand that people think about whenever a specific product is mentioned. 

For example, if you’re in the health and fitness niche, you could narrow down to selling supplements that could help athletes with their fitness journey. Your brand will focus on this one product and create awareness, so whenever an athlete thinks about the best supplement, they would come to your site instead of shopping on platforms such as Amazon. 

How to Build a Profitable e-Commerce Business

A profitable ecommerce business features two key components, which are a good quality product and good marketing. With a good marketing campaign, you might not register as much success with sales if your products are not of the right quality. Here are some of the steps you must follow to get started. 

Finding the Right Product to Sell 

Before anything, you must identify a product the market will pay for. This is usually the most difficult part of establishing an ecommerce business because the success of everything that follows is dependent on the product you choose. There are many ways you can find products that people will pay for. Here are a few ideas for how to find products that you could implement for the best results. 

For example, you could solve a customer pain point. This includes addressing frustrating experiences with already available products. Observe around for common frustrations and develop a line of products that address this issue. 

You could also appeal to enthusiasts and hobbyists, who are usually inclined to invest to enjoy what they want. Their willingness to pay offers a perfect opportunity. Also, capitalize on trends before it’s too late. Use tools such as social listening, which is looking at things like hashtags and topics on social media. Google trends also offer valuable information about what is on topic. 

Effective Marketing 

Having a good product is the first step in building a profitable ecommerce business. You need to also invest in good marketing. You can use different platforms to get your product out there, including Google Ads, if you want an immediate reaction. For long-term results, you should design your website with a strong SEO structure. You could also use Facebook and Instagram marketing to drive awareness and also get your first sales. 

Marketing does not always have to swallow a big budget. You can use low-cost marketing channels, which will take longer to provide results, but you still manage to drive traffic to your site. This is recommended if you’re starting with a limited budget and cannot afford to splash money for PPC marketing and other powerful strategies that cost a lot. 

Before you go full on any marketing campaign, perform tests to know if it’s the right strategy to use for your specific products. Each niche requires a different approach to marketing. 

Implement Retargeting 

In the United States, the ecommerce conversion rate is about 2.5%. This means for every 100 people who come to your site, 97 will not buy. If you don’t invest in retargeting, you’re losing an opportunity to improve your conversion rate. Someone who visits the site can be interested in purchasing from your competitors, so your challenge is to prevent that and ensure they finally purchase from you. For retargeting, use a pixel to track visitors. You could also create smart ads that will trail the user around. AdWords provides good resources for setting up retargeting.  

Even better, you could use dynamic retargeting, which serves ads based on the pages a user visited on your site. For example, if the user viewed a t-shirt from your store, they’ll see the exact product. You could even add a discount offer to entice them to come back. 

Working out Profits 

When you start making sales, it’s important to work out the amount that equals profit for your business. You can use many online tools to process this data, but the idea is to work out gross revenue, net revenue, and profit. Gross revenue combines the total amount made from all the products you sold. Net revenue deducts the cost of acquiring the product from gross revenue. To know your profit, deduct your marketing budget and any other costs from the net revenue. This information is important as it shows you your business’ standing. 


There’s no doubt ecommerce is profitable if done right. You just need the right tools to hit your business goals. With good marketing and the correct product selection, you could soon join the list of entrepreneurs who have found success running ecommerce businesses. If you can find a mentor, it will be easier to establish a successful online store. 

Do you have any ideas to help upcoming entrepreneurs get started with ecommerce? We’ll be pleased to read your views in the comments below. 

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