ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How Much Money Do Online Stores Make?

Updated on November 9, 2012

Thinking of starting an online store?

The online retail industry in the United States alone is worth nearly $200 billion and all figures show that online shopping is on the rise. Judging by this information, you would assume that an online store would be very profitable. Yet, according to one study, the top 500 retailers claim 77% of the entire US e-retail market. That still leaves about $45 billion up for grabs amongst the remaining retailers but, with thousands or even millions of stores online, how much money are these stores really making?

money by 401(K) 2012
Attribution-NonCommercial-ShareAlike License

The Competition is Incalculable!!!

To calculate how much money online stores are making, we'd first need to figure out how many online stores are out there. Many people have posed this question, but no one has yet to give a good answer. The blog Referral Candy comes closest to giving an accurate answer with their power law graphs. Their analysis shows that there are about:

  • 55,000 online retailers making at least $25,000 yearly
  • 34,000 online retailers making at least $50,000 yearly
  • 21,000 online retailers making at least $100,000 yearly

They also estimate that there are probably 1 billion online retailers making less than $1,000 annually. This number is hard to swallow though as it would mean that 2 out of 5 internet users would have an online shop (though many ecommerce merchants have multiple online shops).

While it may not be possible to get an exact number of online retailers, it is clear that the competition is vast. With hundreds of thousands of competitors, you will have to work very hard to get yourself a piece of the $200 billion online retail industry.

It's About ROI, Not Sales

The top 500 online retailers didn't just throw up websites and become big overnight. Most of them, like WalMart, Staples, and Sears, have been household names for decades and already had a loyal customer base when they launched their online stores. Others, like the #1 online retailer Amazon, launched at the start of the internet craze with a clear business strategy for taking over the ecommerce world.

These top online retailers invested a lot into their businesses and, in exchange, have received a lot in return. If you expect to open a profitable online store, then you will need to be prepared to make an investment. In this sense, it is important to focus on ROI of online store models rather than sheer sale numbers.

Aside from sales, there are numerous other factors which are going to affect ROI on online stores. For example, certain marketing methods can produce better ROIs and the choice of credit card processors can also affect ROI.

Online Stores Are Not Get-Rich-Quick Schemes

Yes, there are numerous online stores raking in 6-figure profits, but there are plenty more which have never even seen a cent back on their investments. Unfortunately, the number of online stores which lost money is probably much larger than the number of stores actually turning a profit (regardless of how modest an amount).

The reason that so many online stores fail has to do with the mentality of many people entering the ecommerce industry. Often, they view ecommerce as a get-rich-quick scheme or an easy way to supplement their income. You can’t blame these people for their skewed perceptions though: there are countless “experts” flaunting their “proven” methods of making thousands online with 5 minutes of work per day.

Any business, whether an online store or other industry, requires hard work. The amount of money you make from your online store will be directly related to how much you are willing to invest in it.

Don't let this happen to your online store!

Guestbook Comments

    0 of 8192 characters used
    Post Comment

    • SmallBusinessId profile image

      SmallBusinessId 

      5 years ago

      All those "get rich!" claims you see are bogus. I've had to work my butt off to make a decent living out of ecommerce. It gets easier once the sites are established though.

    • pretyfunky profile image

      pretyfunky 

      5 years ago

      really liked your lens. thanks for sharing

    • HowToStartAnOnl profile imageAUTHOR

      HowToStartAnOnl 

      5 years ago

      @takkhisa: Thanks!

    • takkhisa profile image

      Takkhis 

      5 years ago

      Enjoyed reading your lens really.

    • LittleLindaPinda profile image

      Little Linda Pinda 

      5 years ago from Florida

      It takes time. Thank you for the information. Too many people claim that it is a get rich fast way of making money.

    • HowToStartAnOnl profile imageAUTHOR

      HowToStartAnOnl 

      5 years ago

      @BusinessWebsiteSe: Anyone care to share how much they usually spend when launching an online store?

    • BusinessWebsiteSe profile image

      BusinessWebsiteSe 

      5 years ago

      I agree: success in online businesses is directly related to the amount invested.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)