Shopify is one of the most popular eCommerce platforms on the market. It’s easy to use, has a lot of features, and is relatively affordable.
But, one thing that a lot of people wonder is – how successful are Shopify stores? What percentage of them are actually profitable?
The answer to this question is not as straightforward as you might think. There are a lot of factors that come into play when determining whether or not a Shopify store is profitable. For example, the type of products you sell, your Target market, your marketing efforts, and your overall business model all play a role in whether or not your store will be successful.
That being said, there is no definitive answer to the question of how many Shopify stores are profitable. However, we can look at some data to get a general idea.
According to eCommerce platform provider BigCommerce, the average revenue for a Shopify store is $155,000 per year. This number varies depending on the size and scope of the store, but it gives us a good starting point.
Now, let’s look at some data from Shopify itself. According to Shopify’s own data, the median order value for all Shopify stores is $80. This means that half of all orders placed on Shopify are for $80 or less, and half are for more than $80.
So, what does this tell us? Well, it tells us that the average Shopify store generates about $155,000 in revenue per year and has an average order value of $80. From this data, we can estimate that the average Shopify store has around 1,937 orders per year (155,000/80).
Now that we know how many orders the average Shopify store generates per year, we can start to look at profitability. To do this, we need to look at two things – average order value and conversion rate.
In other words, while there are many profitable Shopify stores, the vast majority of them are not making much money. So if you’re thinking of starting a Shopify store, don’t expect to get rich quick. You’ll need to put in a lot of hard work to make your store a success.
The average order value is pretty self-explanatory – it’s simply the average amount that people spend when they place an order on your site. The conversion rate is a bit more complicated. It’s the percentage of visitors to your site who end up placing an order.
So, let’s say that the average order value for your store is $100 and your conversion rate is 2%. This means that for every 100 visitors to your site, 2 of them will place an order (on average). From this information alone, we can estimate that your store will generate around 200 orders per year (100 visitors * 2% conversion rate).
Now that we know how many orders your store will generate and what the average order value is, we can start to calculate profitability. To do this, we need to know two things – your costs of goods sold (COGS) and your operating expenses (OPEX).
Your COGS includes all of the costs associated with acquiring and producing the products you sell. This includes things like manufacturing costs, shipping costs, and any other costs associated with getting the product from point A to point B.
Your OPEX includes all of the other costs associated with running your business. This includes things like website hosting fees, employee salaries, marketing expenses, etc.
