How online stores make money

Follow one example order: a printed T-shirt from a small shop on its own website. The customer pays $40, and $6 of that is for shipping. The shop's own costs below are our examples; the fees use Shopify's published rates.

These numbers are our example.

The shirt itself costs $9, less than many people guess. The shipping label costs $7, more than the customer paid for shipping. Card and platform fees take $1.85: Shopify's card rate of 2.9% plus $0.30, and a share of its $39 monthly plan spread over 100 orders a month. The shop also sets a little aside for returns, because big retailers expected 19.3% of online sales to come back in 2025.

Our example numbers here are $9, $7, $1.85 and 100; the others come from the sources below.

The biggest slice is the ad that found the customer, at $15. What's left for the owner is about $4.90, before taxes and before any pay for the hours spent packing.

These numbers are our example.

A shop on a street gets people walking in for the price of its rent. An online shop has no street. Many of its new buyers come because the owner paid for an ad, usually by the click.

Two numbers decide what a new customer costs. The cost per click is what one visit from an ad costs. The conversion rate is the share of visitors who buy. In our example, a click costs $0.50 and about one visitor in 30 buys, a conversion rate of about 3.3%. So each buyer costs $0.50 times 30: $15. Owners call this the customer acquisition cost.

These numbers are our example.

Big online stores face the same math. Wayfair, the online furniture store, spent 11.4% of its revenue on advertising in 2025. Etsy, Inc., which runs Etsy and in 2025 also owned Depop, put 31.7% of its revenue into marketing that year, to bring buyers to its sellers.

That's why owners work so hard on photos, reviews and fast pages: when fewer visitors leave without buying, every buyer costs less to win. A past customer who comes back, for example from an email, costs almost nothing to win again.

A shop that prints its own shirts buys them in batches, before anyone orders them. A batch keeps each shirt cheap, $9 in our example, but the money leaves the bank weeks before the sales come back. Shirts that don't sell are cash the owner can't spend.

This number is our example.

Big stores live with this too. At the end of August 2026, US clothing and clothing accessories stores held inventory worth about 2.02 months of sales, by the Census Bureau's count. Amazon charges sellers who keep goods in its warehouses a monthly aged-inventory fee once items have been there longer than 181 days.

There are ways around it, at a price. A print-on-demand company such as Printful makes each shirt after it's ordered, so there's nothing to buy first, but it charged $11.92 for its staple T-shirt with one print, more than our example batch shirt. Wayfair works in a similar way at a much bigger size: its annual report says its main way of delivering orders is a drop-ship network, where suppliers ship from their own warehouses.

Every online shop runs on another company's service: a marketplace like Etsy or Amazon, or a store platform like Shopify. The more buyers a platform brings, the more it takes from each order. Here is what the fees take from the same $40 order.

This number is our example.

A shop on its own website pays the least per order, plus $39 a month for Shopify's Basic plan, but the platform brings it no buyers: it pays for every visitor with ads. On Amazon, the referral fee for clothing is 17% of totals over $20. Amazon earned $172.2B in 2025 from what it charges outside sellers: commissions, fees for storing, packing and shipping their orders, and other seller services. Those sellers sold 61% of the units bought on Amazon worldwide in the last three months of 2025.

The platform also sets the rules, and it can change them. Etsy's transaction fee was 3.5% until mid-2018, then 5% until April 2022, and it is 6.5% today, with the shipping you charge counted too. That's one reason many sellers sell in more than one place: in Etsy's 2021 survey of its sellers, 57% of US sellers also sold through other channels, craft fairs and shops included.