🛍️ Starting an e-commerce business

The only three numbers that matter, and why growing revenue can still lose money.

What the market is worth

US e-commerce sales: $1.62Tprojected 2026, up 10.4% on 2025
Share of all retail: 16.9%Q1 2026 — up from 11.9% pre-pandemic
Growth vs. physical retail: ~2.5×online +9.8% against total retail +3.9%
What that means: Rising tideone of the few markets here genuinely growing, not just repricing

How it actually grows

First 100 ordersProve someone wants it

One product, one channel, honest unit economics. The goal is discovering whether people buy without you subsidising every sale.

Watch out: Buying inventory in bulk for a discount before demand is proven. Unsold stock is the most common way this ends.

Finding the marginContribution margin, or nothing

Selling price minus product, shipping, packaging, payment fees and returns. If that number isn't comfortably positive before advertising, no amount of growth fixes it.

Watch out: Reading revenue growth as success. Scaling a negative-margin product just loses money faster.

Paid acquisitionCAC against contribution margin

Once ads are on, the business is a race between what a customer costs and what they're worth. Everything else is detail.

Watch out: Judging ads on first-order profit alone if your product genuinely repeats — and judging on lifetime value if it doesn't.

Repeat & retentionThe second order is the business

Acquisition costs rise permanently; repeat purchase is the only durable defence. Email and owned audience beat renting attention.

Watch out: Depending on a single channel or platform. Anyone whose whole business sits on one algorithm is renting it.

What each revenue stream is good for

Revenue stream	Pays	Scales
Direct site salesYou own the customer, the data and the relationship. Worth defending.	Best margin	Excellent
Marketplaces (Amazon, Etsy)Instant traffic, heavy fees, and you don't own the customer. Good for discovery.	Lower margin	Excellent
WholesalePredictable, large orders. Smooths cash flow, dilutes margin.	Low margin, high volume	Good
Subscription / replenishmentThe single most valuable model here if the product genuinely repeats.	Recurring	Excellent
Bundles & upsellRaises order value with no additional acquisition cost. Cheapest growth available.	High	Excellent
Digital add-onsGuides, templates or memberships alongside a physical product.	Near-pure margin	Excellent

If you're starting this month

Calculate contribution margin per unit including shipping, packaging, fees and expected returns — before you list anything.
Sell 100 units before optimising anything. Most assumptions die in the first hundred.
Track customer acquisition cost from your first advertising dollar, separately per channel.
Build the email list from order one. It's the only audience you own outright.
Watch return rate by product, not overall. One bad item can quietly consume the margin of everything else.

Before you trade on any of this

Sales-tax obligations follow economic nexus rules that differ by state and can be triggered by revenue or order volume with no physical presence at all. Product liability, import duties, and platform policy changes are real exposures too — and a marketplace can suspend an account with little recourse, which is why channel concentration is a business risk rather than just a marketing one.

Run this against real numbers → The same handbook inside the tool, on a worked example you can swap for your own spreadsheet. Free, no account.

The other 20 handbooks

Figures are sourced from published industry research (IBISWorld, trade associations and regulator data) and are stated with their year. They describe typical conditions, not your situation. This is general information for business owners, not financial, tax, or legal advice.