Tired of those YouTube videos that promise to help you make $1 million a day on Shopify with the super-secret magic trick that only one person (and 50,000 followers) knows about? So are we. That’s why we decided to do a deep dive into what you can realistically expect when starting a business on Shopify.
Learn how long it usually takes to make money on Shopify, how profitable it is, and what you can do to build the best foundation for success.
How Long Will It Take You To Make Money on Shopify?
There are so many variables that come into play that it’s impossible to predict exactly what your experience will be. If you’re extremely talented and/or lucky, you may see profitability in just three months. From the comments on Reddit, you would think this is the norm, but that is not the case.
The minimum time to profitability for many entrepreneurs is six months. On average, it takes about a year for Shopify merchants to start bringing in more revenue than what they spend.
Some e-commerce businesses even need longer, especially if they don’t have enough capital for marketing. In lucrative but competitive markets, it can take two years to get successfully established and start competing with the bigger fishes.
What Factors Affect Your Road To Profitability?
Launching a business is like learning a language. The first one is tough, but each one afterward gets easier. Similarly, if you have previous experience running a small business, you’ll probably have an easier time generating profits on Shopify than first-time sellers.
Other factors that impact your revenue at the beginning include:
- Competition: The more competition you have, the longer it takes to build a customer base, especially if the other brands are popular.
- Niche: A clear niche helps you stand out, but it can also make it harder for customers to find you at first. That’s why money for marketing matters.
- Profit margins: Setting your profit margins too high or too low can make it difficult to make a good return on investment.
- Product demand: Unique ideas are good, but at the end of the day, you need a product that people want to buy.
Money can’t buy success, but it sure speeds things up. You can start a good Shopify Store with just $500 in the bank, but expect it to take longer. When you have the capital to invest in Google Ads or Meta Ads, you can connect quickly with your target audience instead of waiting for them to stumble across your store.
Is It Hard To Make Money Off Shopify?
It’s not any harder to start a profitable business on Shopify than elsewhere. It’s probably easier because of how simple Shopify’s tools make it to set up your store, create product pages, and start selling.
E-commerce businesses as a whole are doing better than ever. In 2023, global revenue for online merchants was $5.8 trillion. Experts say that in the next three years, this figure will increase by nearly 40%!
That said, new business ventures always carry risk. In the U.S., only 80% of businesses survive their first two years, and the number drops to 55% after five years. It’s challenging for any startup to succeed, but that doesn’t mean you should give up.
Entrepreneurs take those risks every day, and even though half may fail, the other half succeed.
How Much Can You Realistically Make on Shopify?
According to annual merchandise volume figures, merchants on Shopify sell an average of $85,000 a year in products. That puts average monthly sales at about $7,000.
Some businesses on Shopify make way more, like $500,000 to $1 million. Other businesses make less.
Glassdoor professionals say the average annual take-home pay for Shopify store owners is in the range of $70,000 to $120,000. But again, this is the average, with many outliers making more or less.
A better way to calculate your potential profits is to look at revenue per customer. On Shopify, most merchants make about $75 per customer. The top 20% double that ($150/customer), and just 10% manage to triple it ($225/customer).
That means you would need to make just under 150 sales per month to hit your first $10,000 in revenue. Priority number one should always be increasing your customer base.
What if you’re not even close to $75 per client? Look for ways to increase your average order volume, such as custom bundles and BOGOs.
How Long Does It Take for a Shopify Store To Become Successful?
Like any business, Shopify stores take time to grow. It’s similar to nurturing a plant, requiring patience and consistent care. There’s a process you need to follow.
The First Three Months
Estimate a month or two for the basics: registering your business, getting your sales tax license, setting up the Shopify store, finding suppliers, and customizing your product pages.
Marketing takes another month (at least). Set up your social media accounts, create content to attract followers, and start testing out store ads.
By month three or four, you should be celebrating your first consistent weekly sales. At this point, stay focused on attracting customers and traffic.
The Six Month Mark
Six months in and still not breaking even? Don’t get discouraged. As long as your revenue is moving up, it’s a good sign. Look for ways to deliver a better customer experience. Encourage happy clients to leave positive reviews for your products.
Your First Year
There’s a good chance for you to be profitable by your first anniversary. Pat yourself on the back, then get back to work. Your first year is special because all the data you gathered helps make year two so much better.
Why Does It Take So Long To Make Money on Shopify?
The real secret to business success always comes down to your customers. It takes a while to discover who your target audience is, what products they love most, and how to advertise to them. You can grow your business, but you need time, dedication, a smart plan, and the right tools. See how Shopify app solutions can help you connect better with your customers from the get-go and start making money on Shopify.