About a year ago Andrew over at eCommerceFuel released the inaugural State of the Merchant Report, which surveyed over 300 eCommerce store owners to find out who they are and how they run their businesses. The report was full of insights and was the primary reason I joined the community, so when this year’s survey arrived in my inbox, I reached out so that I could lend Andrew a hand in the analysis.

My approach

I was eager to dig into the data, and approached this with a few hypotheses about what sets successful eCommerce stores apart. I haven’t gone too deep into data visualisation, exploration or descriptive statistics which Andrew has already done, and have instead focused on a list of my own specific questions and presenting the data for you to interact with and find ask your own questions (see the raw data section below).

Things to know

To navigate easily, use the contents below. You can right-click here to download the jupyter notebook, and once finished, be sure to check out the comprehensive official report at eCommerceFuel.

Who are our merchants?


In total, we have 463 store owners who responded, who are on average 39 years old, have been involved in eCommerce for 6.5 years, and their median store revenue for last year was $800,000 USD. In this group we have merchants with a range of different business models, but we have a fairly even spread across all types.

Around 14% of our respondents are women, with a similar distribution to men across age.

With the recent explosion of drop-shipping and private label stores in recent years, I was curious to explore how the store owners differ across business type. Graphs are below, with 95% confidence intervals shown.

With drop-shipping has become increasingly popular over the past few years, I expected drop-shippers to be younger and have less experience than the more traditional manufacturing model. Interestingly, we see that while drop-shippers do tend to have less experience than owners of manufacturing businesses, the average age actually tends to be higher. Having said that, drop-shipping does have the greatest variance of owners’ age, suggesting that it may have a lower barrier to entry and is easier for anyone (of all skill/experience levels) to get involved with.

One important number to take note of is the annual revenues by business model. Our drop-shippers in this survey average 2-2.5 times less revenue than other models, and this will be important to keep in mind when we start to look at some of the other statistics (such as total number of employees/contractors) in the next tables.

Exploring the data


Since Andrew has already done a lot of the basic data visualisation, I wanted to focus on some specific questions that I had, and present it in a way that anyone can explore the data themselves. These next two sections include summary tables of the numeric parts of the dataset so you can compare different groups on your own (either by business model or store size), and some of my own takeaways. Just be weary that almost all of the data was collected in multiple choice format rather than manual entry (eg which range do you fit into), and that a lot of the data is very skewed, so keep that in mind when interpreting the average values in the tables below.

Data grouped by Store Model, with Takeaways

  • The more involved in manufacturing and sourcing the business is, the more experience the owner has (4.7 years for Drop-shipping vs 8.3 years for Hybrid models).
  • The less the business model has to do with manufacturing, the more SKUs they sell
  • While drop-shippers tend to work less hours than the rest (43 hours vs 44-49), they struggle the most maintaining a work:life balance.
  • Even though the annual revenues of the drop-shippers in our survey were 2-2.5 times lower than other businesses, 73% still reported that they maintain a full-time income from their business compared to the 77-89% for other models. Having said that, the average annual income reported by drop-shippers is only 31k per year, compared to 54k-$67k for each of the other models
  • The net profit margin of all businesses is between 13-20%
  • Private label retailers report the highest percentage their revenue from Amazon sales, with 43% compared to 10-27% for other business models
  • Most businesses have 3-6 months of runway in the bank as cash, with more capital intensive models towards the higher end of that range.
Which model best describes your store type? How many years have you been involved in eCommerce? Excluding yourself, how many payrolled employees do you have? How many contractors do you use in your business? How many different SKUs do you sell? How old are you? How much do you struggle maintaining a work/life balance? (0-10) How many hours per week do you work? Does your business provide a full-time income?  Or, if you’re still working a job, could it? What are the annual revenues of your business? What is your average order value (AOV)?  Please enter WITHOUT a "$" or currency sign. Approximately how much did your revenue grow or shrink over the last year? Approximately how much did your net income grow or shrink over the last year? How much of an annual salary do you pay yourself?  (A regular, recurring salary -- not business withdrawls or dividends) What is your company’s approximate gross profit margin? (After paying product costs, but before fixed expenses.) What is your company's approximate net profit margin? (Profits after paying all expenses and salaries, including your salary). How much non-mortgage business related debt do you have?
Dropshipping (n=75) 4.720000 2.113333 3.573333 6343.933333 40.233333 5.880000 43.493333 0.733333 $1,177,333 405.440000 1.440000 1.427333 $31,326 0.281667 0.136333 $38,600
Reselling (n=90) 7.566667 5.316667 2.333333 5405.333333 39.111111 5.088889 45.627778 0.822222 $2,566,389 771.444444 1.317222 1.290000 $63,122 0.343611 0.134167 $43,583
Hybrid model (n=85) 8.270588 6.358824 4.129412 4964.470588 39.147059 5.458824 49.994118 0.894118 $2,502,647 176.494118 1.403529 1.348235 $64,094 0.401765 0.167059 $52,294
Private label (n=100) 5.915000 4.905000 3.890000 934.400000 36.520000 5.610000 44.295000 0.780000 $2,721,500 124.880000 1.587000 1.538000 $54,065 0.463500 0.208500 $41,975
Manufacturing (n=106) 6.099057 6.429245 4.754717 1356.367925 38.212264 5.320755 48.051887 0.867925 $3,020,047 129.273585 1.533019 1.490094 $67,698 0.485142 0.201179 $55,613

Mean values for each group shown

Which model best describes your store type? How many months of cash in terms of your ongoing business expenses do you keep in your business? What is your average site-wide conversion rate? Apart from Amazon, do you use a 3PL or fulfillment company to fulfill your orders? Do you use your home as your primary office / work space? What % of your sales come from Amazon? Roughly how much have you seen your paid traffic costs per impression or CPA change this year? What is your net worth excluding your eCommerce business' value? (Net worth:  Value of all your assets minus debts) Approximately what % of your net worth (excluding business value) is invested in the stock market? Approximately what % of your net worth (excluding business value) is in cash? Approximately what % of your net worth (excluding business value) is invested in real estate? How much do you enjoy running / owning your business? (0-10) How hopeful are you for the future prospects of your business? (0-10) How happy overall would you say you are in life? (0-10) Are you a member of the eCommerceFuel Private Forum Community? How would you rate the eCommerceFuel Private Community? Employee to Contractor Ratio
Dropshipping (n=75) 3.686667 1.74% 0.226667 0.746667 0.098000 1.108148 $455,380 0.192667 0.285333 0.188667 8.053333 8.133333 8.026667 0.493333 8.567568 0.972032
Reselling (n=90) 4.211111 2.63% 0.133333 0.377778 1.162000 0.179333 $830,044 0.166667 0.189444 0.293889 8.311111 8.422222 7.966667 0.522222 8.787234 3.061111
Hybrid model (n=85) 5.194118 2.47% 0.176471 0.400000 0.221765 1.135410 $1,191,388 0.246471 0.233529 0.292353 8.294118 8.094118 8.058824 0.752941 8.593750 2.672773
Private label (n=100) 5.750000 2.99% 0.380000 0.570000 0.436750 1.142368 $1,003,130 0.207500 0.277000 0.246000 7.940000 7.910000 7.920000 0.680000 8.485294 1.699643
Manufacturing (n=106) 6.726415 3.08% 0.386792 0.556604 0.270283 1.152771 $999,084 0.218396 0.239151 0.293868 8.226415 8.377358 8.075472 0.679245 8.666667 2.090386

Mean values for each group shown

Data grouped by Store Revenues, with Takeaways

  • Interestingly, eCommerce experience and hours worked increase with store revenues (as expected), but age does not.
  • Smaller businesses tend to lean more heavily on contractors than employees. As they grow, they then add payrolled employees fairly linearly with their growth, but as they get bigger there tends to be a cap on how many contractors they work with (almost always less than 10).
  • Store growth rate was fairly consistent regardless of store size.
  • After accounting for increased operating expenses, larger business tend to have more cash in the bank
What are the annual revenues of your business? How many years have you been involved in eCommerce? Excluding yourself, how many payrolled employees do you have? How many contractors do you use in your business? How many different SKUs do you sell? How old are you? How much do you struggle maintaining a work/life balance? (0-10) How many hours per week do you work? Does your business provide a full-time income?  Or, if you’re still working a job, could it? What is your average order value (AOV)? Approximately how much did your revenue grow or shrink over the last year? Approximately how much did your net income grow or shrink over the last year? How much of an annual salary do you pay yourself?  (A regular, recurring salary -- not business withdrawls or dividends) What is your company’s approximate gross profit margin? (After paying product costs, but before fixed expenses.) What is your company's approximate net profit margin? (Profits after paying all expenses and salaries, including your salary). How much non-mortgage business related debt do you have?
$0-$100k (n=68) 2.433824 1.227941 2.029412 1449.264706 39.808824 6.264706 41.676471 0.338235 $321.20 1.344853 1.247794 $6,970 0.311397 0.169853 $12,500
$100k-$250k (n=35) 5.085714 1.242857 2.342857 918.857143 36.957143 5.571429 48.600000 0.600000 $52.94 1.420000 1.465714 $18,985 0.432857 0.222857 $11,071
$250k-$500k (n=60) 5.700000 1.416667 2.875000 1327.166667 37.233333 5.616667 46.675000 0.783333 $945.88 1.465000 1.442500 $37,033 0.437083 0.204583 %24,416
$500k-$1MM (n=77) 7.201299 2.623377 3.383117 2073.051948 39.909091 5.402597 45.383117 0.935065 $185.07 1.541558 1.409740 $43,655 0.416883 0.175974 $34,188
$1MM-$2.5MM (n=107) 7.677570 4.182243 4.088785 4481.308411 38.752336 5.009346 46.359813 0.962617 $266.62 1.422430 1.392056 $66,817 0.417523 0.162850 $42,570
$2.5MM-$5MM (n=48) 8.291667 8.114583 4.812500 6001.979167 38.593750 4.916667 45.718750 1.000000 $176.45 1.527083 1.622917 $88,718 0.423958 0.155208 $97,239
$5MM-$10MM (n=32) 8.093750 12.953125 6.812500 7876.093750 37.593750 5.593750 51.750000 1.000000 $168.87 1.693750 1.571875 $116,375 0.410937 0.128125 $135,234
$10MM+ (n=29) 8.879310 23.586207 6.293103 7995.689655 36.482759 5.620690 51.724138 1.000000 $135.48 1.365517 1.417241 $145,068 0.384483 0.156034 $85,172

Mean values for each group shown

What are the annual revenues of your business? How many months of cash in terms of your ongoing business expenses do you keep in your business? What is your average site-wide conversion rate? Apart from Amazon, do you use a 3PL or fulfillment company to fulfill your orders? Do you use your home as your primary office / work space? What % of your sales come from Amazon? Roughly how much have you seen your paid traffic costs per impression or CPA change this year? What is your net worth excluding your eCommerce business' value? (Net worth:  Value of all your assets minus debts) Approximately what % of your net worth (excluding business value) is invested in the stock market? Approximately what % of your net worth (excluding business value) is in cash? Approximately what % of your net worth (excluding business value) is invested in real estate? How much do you enjoy running / owning your business? (0-10) How hopeful are you for the future prospects of your business? (0-10) How happy overall would you say you are in life? (0-10) Are you a member of the eCommerceFuel Private Forum Community? How would you rate the eCommerceFuel Private Community? Employee to Contractor Ratio
$0-$100k (n=68) 2.948529 1.72% 0.294118 0.911765 0.124265 1.192381 $340,941 0.136765 0.249265 0.210294 7.941176 7.676471 7.500000 0.117647 8.625000 0.835084
$100k-$250k (n=35) 3.785714 3.41% 0.257143 0.857143 0.242857 1.193600 $326,657 0.117143 0.218571 0.185714 8.342857 7.914286 7.771429 0.428571 8.400000 0.724490
$250k-$500k (n=60) 4.950000 2.29% 0.183333 0.766667 0.251250 1.150952 $406,750 0.220000 0.245833 0.263333 8.366667 8.150000 7.850000 0.616667 8.837838 0.882143
$500k-$1MM (n=77) 5.000000 2.84% 0.285714 0.506494 0.311688 1.130943 $569,474 0.220130 0.238312 0.309091 7.857143 7.870130 8.090909 0.727273 9.017857 1.474150
$1MM-$2.5MM (n=107) 6.495327 2.62% 0.261682 0.355140 0.247664 1.113882 $866,710 0.202804 0.246729 0.273832 8.289720 8.588785 8.233645 0.803738 8.430233 1.993324
$2.5MM-$5MM (n=48) 5.458333 2.74% 0.229167 0.333333 0.258333 1.158421 $1,411,938 0.334375 0.238542 0.270833 8.229167 8.416667 8.125000 0.812500 8.666667 2.868254
$5MM-$10MM (n=32) 6.078125 3.25% 0.343750 0.218750 0.350781 1.098462 $1,716,719 0.215625 0.234375 0.345313 7.937500 8.593750 8.062500 0.750000 8.458333 4.487202
$10MM+ (n=29) 7.534483 3.26% 0.379310 0.068966 0.242241 1.124348 $3,380,138 0.210345 0.286207 0.256897 8.551724 8.379310 8.517241 0.793103 8.173913 7.724138

Mean values for each group shown

Data Grouped by Happiness Level, with Takeaways

  • Happiness levels tend to be correlated with your age/eCommerce experience as well as how well your business is doing (business revenue & growth), although this probably has more to do with the fact that older/more experienced respondents have more successful businesses.
  • Those who are most unhappy tend to work more, struggle most with work:life balance (plus work from home more often), are less likely to earn a full-time income from their business (and less income from it overall), and are less hopeful for their business’ future prospects.
  • While the correlations are only mild, overall happiness is correlated with business revenues (rho=0.17, p<0.001), net income (rho=0.11, p<0.03), and net worth (rho=0.13, o<0.01).
Happiness level How many years have you been involved in eCommerce? Excluding yourself, how many payrolled employees do you have? How many contractors do you use in your business? How many different SKUs do you sell? How old are you? How much do you struggle maintaining a work/life balance? How many hours per week do you work? Does your business provide a full-time income?  Or, if you’re still working a job, could it? What are the annual revenues of your business? What is your average order value (AOV)?  Please enter WITHOUT a "$" or currency sign. Approximately how much did your revenue grow or shrink over the last year? Approximately how much did your net income grow or shrink over the last year? How much of an annual salary do you pay yourself?  (A regular, recurring salary -- not business withdrawls or dividends) What is your company’s approximate gross profit margin? (After paying product costs, but before fixed expenses.) What is your company's approximate net profit margin? (Profits after paying all expenses and salaries, including your salary). How much non-mortgage business related debt do you have? How much cash in terms of your ongoing business expenses do you keep in your business?
Unhappy [<=5] (n=32) 6.171875 3.656250 4.234375 4072.968750 37.234375 6.656250 50.218750 0.687500 1.748438e+06 98.250000 1.362500 1.315625 38531.250000 0.414062 0.159375 48359.375000 4.015625
In the Middle [6-8] (n=249) 6.124498 5.024096 3.596386 3427.670683 38.234940 6.152610 47.433735 0.803213 2.404719e+06 218.506024 1.467671 1.415663 54769.076305 0.405723 0.170482 46957.831325 4.714859
Very Happy [9-10] (n=175) 7.162857 5.608571 3.948571 3643.685714 39.174286 4.245714 44.131429 0.874286 2.683143e+06 477.022857 1.474286 1.456571 63945.714286 0.398286 0.177857 46371.428571 6.185714

Mean values for each group shown

Happiness level What is your average site-wide conversion rate? Apart from Amazon, do you use a 3PL or fulfillment company to fulfill your orders? Do you use your home as your primary office / work space? What % of your sales come from Amazon? Roughly how much have you seen your paid traffic costs per impression or CPA change this year? What is your net worth excluding your eCommerce business' value? (Net worth:  Value of all your assets minus debts) Approximately what % of your net worth (excluding business value) is invested in the stock market? Approximately what % of your net worth (excluding business value) is in cash? Approximately what % of your net worth (excluding business value) is invested in real estate? How much do you enjoy running / owning your business? How hopeful are you for the future prospects of your business? How happy overall would you say you are in life? Are you a member of the eCommerceFuel Private Forum Community? How would you rate the eCommerceFuel Private Community? Employee to Contractor Ratio
Unhappy [<=5] (n=32) 0.025234 0.375000 0.687500 0.267187 1.154444 8.256562e+05 0.217187 0.292187 0.221875 6.843750 7.000000 4.593750 0.593750 7.947368 1.319196
In the Middle [6-8] (n=249) 0.026446 0.277108 0.546185 0.262249 1.151823 8.136707e+05 0.207831 0.248394 0.261647 7.847390 7.951807 7.413655 0.634538 8.531646 2.300421
Very Happy [9-10] (n=175) 0.026586 0.240000 0.468571 0.224714 1.126370 1.070380e+06 0.203429 0.229429 0.279714 8.857143 8.748571 9.480000 0.634286 8.846847 2.012082

Mean values for each group shown

Research Questions


Q: Did stores who reported higher increases in PPC costs also report less growth?

A: No – in fact, there was a mild (9.6%) correlation between increasing revenues and increasing PPC costs (p=0.08). This could be related to the relative success of different traffic acquisition strategies.

Q. How does an owner’s eCommerce experience correlate with their current business’ annual revenues?

A. There is a mild correlation between years of eCom experience and annual revenues (r=0.23, p<0.01), however after an owner has 4 years of experience, this trend dissipates (as shown in the data grouped by revenues table above).

Q. If we look only at stores where their own website is their biggest channel, what is the difference in conversion rate between stores whose largest form of traffic is organic, compared to PPC, email and the rest?

What is the biggest source of traffic to your website?
Direct                               0.041250
Email                                0.035938
Organic Search                       0.021656
Other                                0.017500
Paid Traffic                         0.024784
Referral (Links from Other Sites)    0.013500
Social (Non-Paid)                    0.019107
Name: What is your average site-wide conversion rate?, dtype: float64

A: Where direct traffic is the primary source, stores have a conversion rate of 4.1%, followed by email (3.6%), paid traffic (2.5%), organic search (2.2%), non-paid Social (1.9%), Other (1.75%), with, unsurprisingly, referral traffic coming in last place with only a 1.1% conversion rate.

Warmer leads convert better. Nothing unexpected here.

Q. Let’s take a look at Amazon-focused businesses vs non-Amazon businesses and compare them based on their growth rate, profit margins, PPC costs and optimism for the future.

Portion of sales through Amazon Approximately how much did your revenue grow or shrink over the last year? What is your company’s approximate gross profit margin? (After paying product costs, but before fixed expenses.) What is your company's approximate net profit margin? (Profits after paying all expenses and salaries, including your salary). Roughly how much have you seen your paid traffic costs per impression or CPA change this year? How hopeful are you for the future prospects of your business? How much of an annual salary do you pay yourself?  (A regular, recurring salary -- not business withdrawls or dividends) What are the annual revenues of your business?
<5% (n=59) 48.13% 0.439407 0.188136 1.167556 8.423729 $67,533 3.575847e+06
10-30% (n=267) 1.375468 0.411236 0.171067 1.128020 8.247191 $52,458 2.154588e+06
35-70% (n=65) 1.533846 0.375385 0.153077 1.151837 7.723077 $66,023 2.865769e+06
75%+ (n=65) 1.733846 0.366923 0.183846 1.165581 8.215385 $58,130 2.334615e+06

Mean values for each group shown

A. Here we can see a couple interesting things:

  1. For Amazon sellers, the greater the portion of their revenue that comes from Amazon, the faster their revenues grew. Stores with 75%+ of revenue through Amazon grew by 73% – this is crazy, especially when the average revenue for these merchants is $2.33MM.
  2. While Amazon sellers do see their gross profit margins decrease as they sell more through Amazon, this doesn’t effect their net profit margin (after expenses). This suggests Amazon businesses have lower operating expenses, offsetting the higher competition in the Amazon marketplace (and additional fees).
  3. There were no other clear trends from these few variables tested. The takeaway? Focus on Amazon!

Q. Do married merchants have a harder time maintaining their work/life balance?

What's your marital status? How old are you? How much do you struggle maintaining a work/life balance? How many hours per week do you work? How much do you enjoy running / owning your business? (0-10) How happy overall would you say you are in life? What is your net worth excluding your eCommerce business' value? (Net worth:  Value of all your assets minus debts)
Single (n=108) 32.814815 5.879630 48.013889 7.944444 7.583333 $584,777
Other (n=19) 34.868421 5.157895 36.473684 8.157895 7.631579 $1,029,368
Married (n=308) 40.256494 5.327922 46.613636 8.256494 8.178571 $1,046,333
Divorced (n=13) 46.807692 4.923077 43.192308 8.000000 8.076923 $250,769
Widowed (n=4) 59.125000 6.250000 40.500000 7.000000 7.750000 $115,250

Mean values for each group shown

A. First of all, I’m a little surprised (and impressed) that two thirds of respondents are married, and so few are divorced. Who says you need to choose between business and a family?

As for the stats, we can see a fairly predictable increase in age through each of the relationship statuses,  and unsurprisingly the single merchants put in the most hours at work. A few points:

  1. Single merchants put in considerably more hours overall, and while they enjoy running their business (almost) as much as the others, they aren’t as happy in life and struggle more with work/life balance.
  2. Married merchants are happiest in life and enjoy running their business the most, despite working over 46 hours per week on average. They’re also the most well-off financially.
  3. The same can’t be said for our divorcees – they may work less hours and struggle less with balance, but they also have only a quarter of the net worth of their younger, married peers. Ouch.
  4. Finally, while there were only 4 Widowed respondents, they do find it considerably more difficult maintaining work/life balance. Perhaps caused by the responsibility of caring for a family without a partner to help?

Overall, it appears that those who manage a stable relationship appear to also have rewarding lives, both professionally and financially.

Q. Since this is a survey of (mostly) eCommerceFuel members, let’s see how they compare to other merchants

Are you a member of the eCommerceFuel Private Forum Community? How many years have you been involved in eCommerce? How old are you? What are the annual revenues of your business? How happy overall would you say you are in life? (0-10)
Yes 4.842262 38.675595 $1,487,351 7.922619
No 7.508681 38.437500 $3,036,111 8.059028

Mean values for each group shown

A. The ECF group are an experienced bunch, with an average of 7.5 years experience in eCommerce, despite similar ages with non-members. Most of the other variables in the survey were similar across groups (or cancelled out by the higher annual revenues of the ECF group). While I’d love to say being a part of ECF will make you happier overall in life, Andrew agrees that may be a stretch. I’ll make that my personal recommendation 😉

Q. What are the biggest struggles that all respondents face in their business?

A. The final question in the survey was open-ended and asked respondents, in their own words, what their biggest business struggle is right now. I’d definitely recommend checking out the raw data for more insight, but I’ve created a word cloud to give a birds eye view of the most common concerns. The biggest ones I noticed were dealing with Amazon (and competition from there), growth & scaling issues, hiring good talent (and managing them), and of course, cash-flow.

Q. Is there a correlation between high-growth businesses and whether they hire contractors or employees more often?

No, there was no evidence of this (rho=0.00, p=0.94)

Predictive models

Other than the above analysis, I tried building some prediction models and then pull them apart to understand which of the prediction variables contribute most to variables like store growth, owner happiness and annual revenues. I wasn’t satisfied with the results (the models weren’t accurate enough to be relied upon, the data being fed in wasn’t accurate enough), but in at least the store growth model, the extracted feature importances did back up the findings in the earlier parts of the analysis (The most important variables were owner’s age, net profit margin, AOV, % sales from Amazon, and hours worked per week). If you want to see how I did it, check out the jupyter notebook, but keep in mind that it was rough and fast and needs a lot more work to iron out problems.

Closing thoughts


Overall, I really enjoyed diving into the data and there were a lot of interesting findings. If you don’t look at the analysis at all, just know that you should focus on Amazon for store growth, get married to become rich and have a successful business, and that joining ECF will improve your life and business. Well, something like that.