As digital commerce continues its rise, many online entrepreneurs have this question in mind: is a Shopify store profitable still profitable?
While many online store owners prefer eBay or Amazon due to the loyal customer base and popularity of these e commerce platforms, Shopify is a viable alternative.
Maximizing profits is the main driver in online store owner’s decisions in choosing an ecommerce platform, and this guide will explore the best marketing strategies and a proven formula to maximize profitability in Shopify online stores.
While my expertise relies heavily on eBay dropshipping and online selling, I have spent decades online selling and know the best strategies to ensure online store success. A solid marketing strategy coupled with the best selling products can bring more money to your online business, no matter which platform.
Therefore, I will share the tips you need to know to boost your store’s performance and make it highly profitable.
Keep reading if you would like to unlock the secrets to making your store highly profitable in 2024.
Article Overview:
Key Takeaways
Key Shopify Insights for 2024
Factors that Make a Shopify Store Profitable
Is a Shopify Store Worth It?
FAQs on Shopify Profitability
Key Takeaways
- The latest ecommerce landscape and statistics from 2023 reveal that Shopify continues to be one of the leading e commerce platforms for online stores.
- Several key factors make a Shopify store profitable, such as selling high profit margin products and high quality products.
- Using a marketing tool for product and market research can identify the best selling products that will attract your target audience and boost profitability.
Key Shopify Insights for 2024
Is a Shopify store profitable?
The best way to answer that question is to analyze the performance of Shopify stores in the past year. While new digital marketplaces have emerged, Shopify remains one of the top choices for anyone starting an online store.
Starting a Shopify business is a major investment and there is heavy competition among store owners with millions of ecommerce businesses on the e commerce platform.
Here are the key statistics and insights you must know before starting a Shopify business, which are obtained from a report on LinkedIn:
- As of September 2023, the Monthly Recurring Revenue (MRR) of Shopify stores increased 32% from last year (valued at $141 million). It supports the profitability of a Shopify business, ensuring a loyal customer base for online shopping store owners with Shopify.
- The gross profit for Shopify business increased 36% from the previous year. It is a good indicator for anyone who wants to start a profitable business with the Shopify e commerce platform.
- As of 2023, there are over $812 billion worth of products sold through Shopify stores and the platform.
- The total revenue for Shopify in North American alone is equivalent to $2.15 billion. This revenue accounts for Shopify stores with buyers in the USA, Canada, and Mexico.
- As of 2024, Shopify ecommerce businesses have 700 million active buyers. It shows the expansive reach of the Shopify platform, making it a good choice for anyone who wants to build a e commerce business.
- In the US, the Shopify platform holds a third (32%) of the US market share, cementing its reputation as a popular e commerce platform. It is unsurprising since the US has most of the stores in the e-commerce platform, with 60% of Shopify stores in the USA. Meanwhile, the majority of the US customers are from California.
- The global reach of Shopify as an e commerce platform is also massive, with merchants from 175 countries. Meanwhile, there are 1.75 million merchants with a Shopify store.
- Approximately 50.3% of traffic to Shopify stores comes from mobile devices. It cements the popularity of online shopping from mobile devices and requires Shopify store owners to make their websites mobile-responsive.
- During the Black Friday and Cyber Monday weekend, Shopify stores set a new sales record of $9.3 billion.
- Shopify offers store owners several options to process payments, but checkouts through Shop Pay have a 72% higher conversion rate.
- The Shopify app store offers over 10,000 apps to help sellers maximize their store’s performance and profitability.
- Only 7.77% of sellers on Shopify use the dropshipping business model.
Factors that Make a Shopify Store Profitable
Achieving your target profit margin as a Shopify business depends on several key factors. Take time to address these factors to make more money and keep your Shopify store profitable.
Selling High-Profit Margin Products
Maximizing profitability with your Shopify store starts with thorough market research. You must identify the best products to sell online with a high profit margin.
So, why is this strategy crucial in establishing a profitable business in the e commerce platform?
The strategy of selling high profit margin products mean you can acquire the products for a lower initial cost, but they command a higher selling price. The more sales you can get for these products, the more profits you can bring home for your Shopify business.
Therefore, make it a priority to choose high profit margin products to ensure profitability.
Selling High Quality Products
High quality offerings is non-negotiable when selling on Shopify or any ecommerce platforms. With a saturated market and competition, you want to ensure repeat business or retain existing customers by exceeding their expectations with the best quality products.
High quality offerings also enable you to foster a loyal customer base. These customers trust you for their online shopping needs, guaranteeing a steady income stream.
Selling High Demand Products
Identifying the top trending and selling products on Shopify is another strategy to boost your profitability. Invest in marketing tools that will enable you to identify the top selling products in your niche, or those that would fit your target market.
Obtaining access to sales data is crucial in helping validate the demand for these products, ensuring you can address market demands. When you offer products to your target audience who might need them, it will be easier to make more sales in your Shopify stores.
Aligning your product offerings with the market demand is a secret to a successful online store.
Selling Subscription-Based Products
Another marketing strategy you can use to make your Shopify store profitable is to offer subscription-based products. It is a smart decision for a profitable business because it guarantees steady income and revenue.
Subscription-based products also ensure exclusivity, making your target market more inclined to keep using your products. If you have a high quality product, these customers won’t mind paying you on a recurring basis to access those products.
Factors that Lower Shopify Profitability
While many factors can help make a Shopify store profitable, it’s also crucial to know what can negatively impact your store’s performance. That way, you can avoid committing these mistakes and ensure you can thrive as an online store.
Not Lowering Your Operating Expenses
Running an online store takes a lot of effort and planning. In addition, maximizing profits entails keeping your operational expenses low. It is a proven formula in the e commerce industry.
So, how do you boost your profit as an online store? The first step is finding affordable suppliers for your products. You can also negotiate better shipping rates for your products, especially when you order in bulk or wholesale.
Assess where you can trim off unnecessary costs to expand your profit margin. Effective cost management will help sellers succeed in this e commerce platform.
Not Testing Before Scaling
Make it a habit to test everything before implementing them at full scale. It applies to your products, wherein you must order a sample before making a big order to ensure the quality lives up to your store’s standards.
Remember, high quality products can make your Shopify store profitable.
That said, you must ensure the quality of the products before you offer them to your target audience. You should use this same approach when evaluating suppliers for your Shopify business.
Store owners must carefully vet their suppliers to ensure quality. Always order a small batch to verify the standards of their product.
It is also a good opportunity to check the reliability of the suppliers and if they offer excellent customer service.
Reliable suppliers can make or break an online business, especially dropshipping businesses.
The same also goes for your marketing strategies. Test them out before you fully invest to ensure excellent results as far as boosting profit margins are concerned.
Not Knowing Your Audience
You must study and analyze your target audience when doing thorough market research. Understanding your audience will help you make informed decisions that will keep your Shopify store profitable.
During market research, analyze your customer behavior and preferences.
What are their pain points?
What are their interests?
This information is valuable so you can tailor your product offerings to establish a loyal customer base and win over repeat business. In addition, you can adjust your marketing strategies to fit your target market.
Not Investing in Branding
There are millions of sellers on the Shopify ecommerce platform. If you want to stand out, you must invest in branding. And a huge part of branding is the store design.
Shopify offers store owners multiple tools to customize their store design to reflect their brand and make their store visually appealing to their customers.
The store design is more than just for aesthetic purposes, though. The branding of your online store can significantly impact your profit margins as it shows your credibility and makes your brand more trustworthy in the eyes of prospects or existing customers.
You have various tools available to customize your store design, so be sure to put them to good use to make your Shopify store profitable.
Not Investing in Product Research
The products you have in your Shopify store directly impact your profit margins. If you want to make more money, it is crucial to use a marketing tool to identify the best selling products in your niche.
A product research tool, such as ZIK Analytics, provides access to real-time data and analytics to inform you on the best products to sell for more e commerce sales.
You can employ the most effective marketing strategies, such as email marketing and content marketing, to maximize your sales funnels.
However, they’re not only as good as your product offerings. If your target market is not interested in your products, no marketing strategy can save your Shopify store from losing money.
Is a Shopify Store Worth It?
No e commerce platform can guarantee healthy profit margins, so you must rely on industry insights and data to choose the best platforms for maximizing profits.
There are many advantages to choosing Shopify as a platform for selling products online, but becoming one of Shopify’s success stories depends on many key factors.
Same with eBay sellers, you must research the top selling products to add to your store that would attract the target audience for your online store. In addition, you can maximize your Shopify plan to create a visually appealing store design that will drive traffic to your Shopify store.
Moreover, it’s how you deliver that customer experience that determines if your store is highly profitable or not. Invest in high quality offerings when selling products and address customer inquiries promptly.
These are the key elements that make up a successful online store, whether on Shopify or other leading e commerce platforms.
FAQs on Shopify Profitability
How much does the average Shopify owner make?
An average Shopify store owner makes anywhere from $1,000 to $10,000 per month. It varies depending on what you are selling and the target audience.
Is selling on Shopify still profitable?
Most Shopify businesses see profitability within two years. At this point, successful online store owners can make up to $155,000 annually selling products on Shopify.
How fast can I make money on Shopify?
There is no definite timeline for when online store owners can make money on Shopify. Some will only take a few weeks, and others can take months.
It depends on your products, the marketing strategy to drive traffic to your Shopify business, and if you utilize social media to promote those products.
How much is Shopify store per month?
The initial investment and the recurring costs for a Shopify business vary based on your chosen Shopify plan. It starts at $29 to $299 per month for an annual subscription.
The Shopify Plus account will vary based on the quoted price.
How much profit does Shopify take per sale?
It can vary widely depending on the Shopify plan the seller has subscribed to on their account. Typically, Shopify charges 2.9% + 30 cents per transaction.
Again, the transaction fees will vary according to your plan, so consider that when setting up your Shopify store and determining your target profit margin.
