Ecommerce: How to Sell Online and Make Every Order Profitable | Free Digital Marketing Course: From Beginner to Expert

What you'll learn

How to choose between your own online store, marketplaces and social commerce.
How to calculate what each online order really leaves after product cost, fees, shipping and ads.
The three levers of online sales: traffic, conversion rate and average order value.
How to recover abandoned carts and get customers to buy again.
The sales tax basics every U.S. online seller should know.

📥 Practice this lesson

Enter your average order, product cost, fees, shipping and CAC to compare your own store with a marketplace, order by order.

digital-marketing-template.xlsx · Order Profit sheet

Selling online looks simple: upload your products and wait for orders. In practice, many online stores sell plenty and earn little, because nobody did the full math on a single order: the payment processing fee, the shipping you don't fully charge, returns and, above all, what it cost to win that customer. In this lesson you'll do that math for Aurora Coffee, which wants to ship its coffee nationwide.

Where to sell

Your own storeShopify, WooCommerce, BigCommerce, Squarespace

Pros: You control the brand, the customer data and the experience; no marketplace commission.
Cons: You generate (and pay for) all the traffic; setup and maintenance.

Repeat customers

MarketplacesAmazon, Etsy, Walmart Marketplace, eBay

Pros: Millions of shoppers who already trust the platform; payments and often fulfillment handled.
Cons: Fees on every sale, price competition, and the customer belongs to the marketplace.

New customers

Social commerceInstagram and Facebook Shops, TikTok Shop

Pros: Fast to start, buy where people discover you, great for products that sell on video.
Cons: Platform rules and fees change; harder to build a direct relationship.

Discovery

It's not an either-or decision. A common strategy is to use marketplaces to acquire new buyers and your own store, together with email (lesson 6), for repeat purchases, where you pay no commission and no ad cost.

Sales tax basics (U.S.)

Every state with a statewide sales tax has a "marketplace facilitator" law, so Amazon, Etsy, Walmart and similar marketplaces collect and remit sales tax on the sales they process for you. On your own store, you're responsible: since the Supreme Court's 2018 South Dakota v. Wayfair decision, states can require you to collect tax once you pass their economic nexus thresholds, even without a physical presence. Store platforms can calculate tax automatically, but you still need to register in the right states. Check with a tax professional for your situation.

The math of one order (unit economics)

Aurora sells through its own Shopify store. The average order is $50 (before sales tax). Here's where the money goes:

Item	Per order
Average order value	$50.00
− Cost of goods: coffee, bags, labels (40%)	$20.00
− Payment processing (2.9% + $0.30)	$1.75
− Shipping: costs $8.00, customer pays $5.00	$3.00
− Packaging	$1.50
− Returns and issues (2% of sales)	$1.00
Contribution margin before marketing	$22.75
− Customer acquisition cost (CAC) from ads	$20.00
Profit on the first order	$2.75

Cost of goods (40%) $20.00Green coffee, roasting, bag and label.
Payment processing (3.5%) $1.752.9% + $0.30, Stripe's standard U.S. online card rate.
Net shipping (6%) $3.00The part of the $8 label the customer doesn't pay.
Packaging (3%) $1.50Box, filler and the thank-you card.
Returns and issues (2%) $1.00Lost packages, replacements.
Contribution margin (45.5%) $22.75What's left to pay for marketing and overhead.

After a $20 CAC, the first order leaves only $2.75. The real profit is in the second order.

The first order barely leaves $2.75. The real business is the second purchase: if it comes from an email or a text reminder, its acquisition cost is close to zero and it leaves the full $22.75. That's why customer lifetime value (lesson 12) is the central metric of ecommerce.

And on a marketplace?

On Amazon, Grocery & Gourmet products priced above $15 pay a 15% referral fee (8% at $15 or less). Say Aurora sells the same $50 order (two $25 bags) there and pays about $6.00 per order in fulfillment fees (an illustrative figure: actual fees depend on size, weight and season): $50 − $20 − $7.50 − $6.00 − $1.00 in returns = $15.50 per order, with no ad cost to attract the buyer (plus Amazon's $39.99 monthly Professional plan). For the first order, the marketplace wins ($15.50 vs. $2.75). For every order after that, your own store wins ($22.75 vs. $15.50), as long as the customer comes back to you directly.

1. An order leaves $15 of contribution margin before marketing, and the CAC is $18. What does that mean?

You lose $3 on the first order and only make money if the customer buys again.
The business is profitable because the margin is positive.
You should increase your ad budget.

$15 − $18 = −$3. That can be a valid strategy if you know customers reorder, but you have to measure it. Raising ad spend without fixing it multiplies the losses.

The three levers of online sales

Sales = Visits × Conversion rate × Average order value

With 10,000 visits a month, a 1.5% conversion rate and a $50 average order, Aurora sells $7,500. If it lifts conversion to 2%, it sells $10,000; if it also raises the average order to $60, it reaches $12,000. Same traffic, 60% more sales. Before paying for more traffic, improve what happens inside the store.

$7,50010,000 visits × 1.5% × $50

$10,000conversion raised to 2%

$12,000conversion 2% and average order $60

Raise the conversion rate

Product pages that sell: real photos from several angles, benefit-driven descriptions (lesson 3), practical details (weight, grind, roast date) and reviews.
Clear costs up front: unexpected shipping at checkout is one of the most common reasons for abandonment. Show it on the product page or offer a free-shipping threshold.
The payment methods your customers use: cards, PayPal, Apple Pay, Google Pay, Shop Pay and, for higher-priced items, buy now, pay later.
A short checkout: guest checkout, few fields, no surprises.
Trust: visible return policy, contact details, chat for questions.
Mobile speed: most online shopping happens on phones (lesson 7).

Raise the average order value

Bundles: "French press kit + 2 coffees" at a small discount.
A free-shipping threshold a bit above your current average (for example, $60 when the average is $50).
Recommendations: "Customers who bought this coffee also bought…"

2. Your average order is $70. Where should you set a free-shipping threshold to raise it?

At $40, so almost everyone qualifies.
At $300, so you never lose money on shipping.
Slightly above the average, such as $85 or $90, if your margin allows.

The threshold should nudge people to add one more item. Below your average, you give away shipping without changing behavior; far above it, nobody tries to reach it.

Abandoned carts

The Baymard Institute, which has tracked studies on the topic for more than a decade, puts the average documented online cart abandonment rate at 70.19%. Part of that loss can be recovered:

FirstFind the causesUnexpected costs, forced account creation, too few payment options, lack of trust or a technical error. Watch session recordings and test your own checkout on a phone.
After 1 hourA helpful reminderEmail (or a text, with consent) showing the cart. No automatic discount: you'd teach people to abandon carts to get one.
Next dayAnswer the doubtReviews of the product or the answer to a common question (shipping times, grind options, returns).

Bring customers back

A flawless delivery: tracking updates, careful packaging and a handwritten-style thank-you note.
A welcome email and a replenishment email when the product is about to run out (coffee lasts three to four weeks: perfect timing).
Subscriptions at a discount: "Get coffee every month and save 10%." Recurring, predictable revenue.
Measure the repeat purchase rate: the percentage of customers who buy a second time within 90 days.

3. What's the best way to improve the profitability of a store whose first order leaves little margin?

Double the ad budget.
Increase repeat purchases with email, consented texts and subscriptions, which have almost no acquisition cost.
Cut prices to sell more.

Repeat orders keep the full contribution margin because the customer was already acquired. That's where ecommerce profit lives.

4. A store gets 8,000 visits a month, converts at 2.5% and has a $40 average order. What are its monthly sales?

$800
$32,000
$8,000

8,000 × 0.025 = 200 orders, and 200 × $40 = $8,000.

Practice exercise: own store or marketplace?

An activewear store has an $80 average order. Product cost is 45%. On its own store it pays 2.9% + $0.30 in processing, shipping costs it $9 and it charges the customer $6, packaging costs $2, returns equal 3% of sales and the CAC from ads is $28. A marketplace charges a 15% referral fee plus $7 per order in fulfillment fees (packaging included), and returns are still 3%.

Calculate the profit on the first order in the store.
Calculate the profit per order on the marketplace.
What strategy do you recommend?

See solution

Own store
Average order                   $80.00
− Product (45%)                  36.00
− Processing (2.9% + $0.30)       2.62
− Shipping ($9 − $6)              3.00
− Packaging                       2.00
− Returns (3%)                    2.40
= Contribution before marketing  33.98
− CAC                            28.00
= Profit on the first order       5.98

Marketplace
$80 − $36 − $12 (15%) − $7 − $2.40 = $22.60 per order

On the first order, the marketplace leaves far more ($22.60 vs. $5.98). But a second order placed directly on the store, with no CAC, leaves $33.98. Recommendation: use the marketplace to acquire new customers and build the relationship (a package insert inviting them to follow the brand, if the marketplace's rules allow it), and focus the own store on repeat purchases through email and texts sent with consent.

Summary

Own store for brand and data control, marketplaces for reach, social commerce for discovery.
Calculate the profit per order with every cost: product, processing, shipping, packaging, returns and CAC.
Sales = visits × conversion × average order value: improve conversion and order value before buying traffic.
Recover carts with helpful reminders and build repeat purchases: that's where the profit is.
Marketplaces collect sales tax for you; on your own store, you're responsible where you have nexus.

Next lesson: Influencer Marketing and UGC: Choosing Creators, Paying Them and Measuring Sales. You'll learn how to pick creators, what to pay, how to measure their sales and how to stay within the FTC's rules.