/ Ecommerce
How do I know if my online shop is actually profitable?
Work out contribution per order: price minus goods, fees, shipping, packaging, returns and ad cost. Revenue is not profit.
/ 01
The short version
Plenty of busy-looking shops lose money on every order and make it up on volume.
/ 02
What actually matters
- • Cost of goods, payment fees, shipping and packaging per order.
- • Add expected return rate as a percentage cost.
- • Add customer acquisition cost from ad spend.
- • What's left is contribution — that pays for everything else.
- • Track it monthly per channel, not sitewide.
/ 03
The bit most people get wrong
Ad-driven growth with negative contribution margin scales your losses. Check the per-order maths before increasing budget.
/ 04
What to do next
Calculate contribution per order on your best seller today. If it's negative, stop advertising it.
/ 05
Where RIOT fits in
We're a small Colchester studio helping UK SMBs get ecommerce profitability right without agency waste or freelancer flake. If you've read this far and you want a second opinion on your specific setup, book a 20-minute call and we'll tell you honestly whether it's worth doing anything at all.
We work with clients across Essex, Suffolk, London and the wider UK — and remotely with brands abroad. No lock-in, no monthly retainer minimums, no pretending your problem is bigger than it is.
/ FAQs
Common questions
What's a healthy contribution margin?
30%+ after all variable costs.
How do I lower acquisition cost?
Email, repeat purchase, and organic content.
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