Ecommerce Profit Margins: What’s a Good Margin in 2025
- Lower Your COGS
- Increase AOV (Average Order Value)
- Optimize Ad Spend
- Reduce Operational Waste
- Gross Profit Margin: Revenue minus Cost of Goods Sold (COGS).
- Net Profit Margin: Revenue minus all business expenses (COGS, ads, tools, salaries, shipping, etc.).
- Negotiate with fulfillment partners: If you use 3PLs or dropshipping platforms like CJdropshipping or Zendrop, negotiate per-unit or volume shipping discounts.
- Use supplier marketplaces (Alibaba, 1688) to source alternate options.
- Redesign packaging to be lighter or smaller—reduces shipping costs and returns from damaged goods.
- Pre-purchase upsells: Add “Complete the look” or “You might also like” sections on your product pages.
- In-cart offers: Free shipping thresholds ("Spend $50 more for free shipping") drive upsell behavior.
- Post-purchase upsells: Offer add-ons after the first purchase using one-click upsell apps like Zipify or ReConvert.
- Track CAC vs. LTV in real time: Tools like TrueProfit help you know when you're scaling profitably.
- Use product-level ROAS: Instead of average ROAS, break it down by SKU so you know which products are eating margin.
- Retarget smarter: Set up segmented campaigns (e.g. loyal customers, abandoners, recent viewers) to improve ROAS and reduce CAC.
- Subscription audits: Do you really need 3 different reporting tools? Cut overlaps.
- Streamline fulfillment: Use rules in apps like ShipStation or use Smart Order Routing in Shopify to reduce errors.
- Automate workflows: Automate review requests, abandoned cart emails, reporting, or P&L tracking to save time and reduce manual errors.
Senior Content Executive at TrueProfit & SEO/Content Specialist
Tracy is a senior content executive at TrueProfit – specializing in helping eCommerce businesses scale profitably through content. She has over 4 years of experience in eCommerce and digital marketing editorial writing. She develops high-impact content that helps thousands of Shopify merchants make data-driven, profit-focused decisions.
Tracy is a senior content executive at TrueProfit – specializing in helping eCommerce businesses scale profitably through content. She has over 4 years of experience in eCommerce and digital marketing editorial writing. She develops high-impact content that helps thousands of Shopify merchants make data-driven, profit-focused decisions.
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