Ecommerce

Gross margin is not the number

Most ecommerce brands read a healthy gross margin and assume the business is healthy. What's left after acquisition and shipping is a different figure entirely, and it's the only one that pays you.

Where it goes

Contribution, not gross: A 60% gross margin with 30% of revenue going to ads and 8% to shipping is a 22% business. Very few brands track that number weekly.
Acquisition creep: Blended CAC rises quietly as you scale spend. Revenue keeps growing while every new order earns less than the last one.
Returns and discounting: Return rates and habitual promo codes hit the same line, and neither shows up in the gross margin figure you're watching.

Reference ranges

Industry data

Metric	Healthy	Most sit at
Gross margin	55–65%	45–55%▼
Contribution margin	20–30%	10–18%▼
Ad spend / revenue	15–22%	25–35%▼
Repeat purchase rate	25–30%	15–20%▼

Where your business sits against these is what the audit measures.

The one thing to do next

Fifteen minutes on your numbers.

Book the call and you'll get six questions to answer first, so the time goes to your numbers instead of background.

Book a Profit Audit