2023

Ecommerce
Analysis:
People, Profits & Projections
 Ecommerce Analysis

How did Ecommerce

brands do in 2023?
Hampton runs a private community for high-growth tech founders and CEOs.

We asked our community of Ecommerce owners how they did in 2023 and
crunched the numbers to create this report.

Here’s a sneak peek of what’s inside:

Revenue and profitability breakdowns for 35+ ecommerce brands
Category breakdown
FTE and contractor split by business
Ad spend and marketing channel mix
General sentiment for 2023, and more!

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 Ecommerce Analysis

Table of Contents
4 Category Breakdown 13 Revenue Per Employee (RPE) by Category
5 Summary 14 Ad Spend as a % of Total Sales
6 Average Revenue Per Category 15 Best Marketing Platforms
7 Average Profit Per Category 16 Worst Marketing Platforms
8 Gross vs Net Profit Margin 17 Most Exciting Marketing Platform
9 Gross vs Net Profit Margin by Category 18 How Much Owner’s Pay Themselves
10 Cost of Goods Sold (COGS) % by Category 19 Overall Sentiment
11 Sales Compared to Prev Year 20 What’s next?
12 Employees + Contractors

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 Ecommerce Analysis

Category Breakdown
For this report, we surveyed 40+ Ecommerce Apparel & Accessories 12
founders and after removing outliers and bad
data we selected 37 companies to analyze. Health & Beauty 10

Food & Beverage 8

In terms of product category,
Apparel/Accessories, Health/Beauty, and Sports & Outdoors 3
Food/Beverage made up the majority of our
sample size. Pets & Animal Care 1

Sports/Outdoors, Pets/Animal Care, Electronics 1

Electronics, and Books/Movies/Games filled

Books, Movies, Games 1
out the rest.
0 2 4 6 8 10 12

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 Ecommerce Analysis

Summary
Here’s a quick summary of what we learned after analyzing 37
ecommerce brands performance in 2023:

68% said that sales were up in 2023 over 2022.

The best marketing channel in 2023 was Meta.

Overall Averages
The worst marketing channel in 2023 was TikTok.
Revenue $25m
The channel that founders were most excited for in 2024 was also
TikTok, pointing towards optimism around figuring out how to make it Team Size* 20
work for their brands this year.
Gross Margin 63%
The average RPE was $1.35m. When including contractors it
dropped to $764k. Net Margin 7.9%

The average salary owners paid themselves was $385k RPE* $1,348,991

*FTEs only
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 Ecommerce Analysis

Average Revenue Per Category

Overall average: $25m

$70,000,000
$64.9m
$60,000,000

$50,000,000

$40,000,000
$35.0m $35.0m
$30,000,000
$21.8m
$20,000,000

$10,000,000 $5.3m
$2.6m $3.0m
$0
Food & Books, Movies, Apparel & Sports & Electronics Pets & Animal Health &
Beverage Games Accessories Outdoors Care Beauty

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 Ecommerce Analysis

Average Profit Per Category

Overall average: $4.7m

$15,000,000
$13.9m

$10,000,000

$6.0m
$5,000,000 $4.1m

$27k $250k $380k -$650k

$0
Food & Books, Movies, Apparel & Sports & Electronics Pets & Animal Health & Beauty
Beverage Games Accessories Outdoors Care

$-5,000,000

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 Ecommerce Analysis

Gross vs Net Profit Margin

Profit margins grew consistently as the business Gross Profit Net Profit
70%
revenue increased. 68%
66% 65%
60%
58%
The $10-$50m group saw a slight drop in the
50%
average gross profit margins but did go up in
terms of net profit. 40%

30%
However, net profit jumped noticeably between
the $10-$50m range and $50m+ range, going 21%
20%
from 8% to 20% on average.
10% 7% 8%
5%

0%
$1-5m avg $5m-$10m avg $10m-50m avg $50m+ avg

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 Ecommerce Analysis

Gross vs Net Profit Margin by Category

Gross Profit Net Profit
80%
Apparel and Accessories had the
second highest gross profit, but the 73%
3rd lowest in net profit. 70%
68% 67% 66%
60%
Pets and Animal Care had the highest
gross to net profit margins but having
data from only one company makes it 46%
40%
hard to tell if this is a trend or a
successful brand.
26%
20% 17%
Health and Beauty had the highest 14%
11%
consistent profit margin with data 7% 8%
from 11 brands. 4%
0%
-2%

Pets & Apparel & Sports & Health & Books, Food & Electronics
Animal Accessories Outdoors Beauty Movies, Beverage
Care Games
-20%

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 Ecommerce Analysis

Cost of Goods Sold (COGS) % by Category

COGS %
The overall average for COGS as 80.00%

a % of sales was 38%. 74%

60.00%
However 5 of the 7 categories
averaged between 27% and 33%. 54%

40.00%
Unsurprisingly, electronics had
the highest COGS of these 7 30%
32% 33% 33%
27%
categories at 74%. 20.00%

0.00%
Pets & Apparel & Sports & Health & Books, Food & Electronics
Animal Accessorie Outdoors Beauty Movies, Beverage
Care s Games

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 Ecommerce Analysis

Sales Compared to Prev Year

Flat / About the Same
18.4%
We asked founders how sales in
2023 compared to 2022.

68% said that sales were up, while

18% said they were flat or about the
same as 2022.
Sales were down
Only 13% of founders said that sales 13.2%
were down from the previous year.

Sales were up
68.4%

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 Ecommerce Analysis

Employees + Contractors
Avg Employees Avg Contractors
Health & Beauty had the highest 50 49

number of average employees at

49, and has less contractors 40
36
overall with 11.
30
30
Electronics and Pets & Animal 22
Care brands were the only 20
other categories with more 15
10 11
than 10 employees. 10
7 7
4 5 4
3 3
0
Food & Books, Apparel & Sports & Electronics Pets & Health &
Beverage Movies, Accessories Outdoors Animal Care Beauty
Games

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 Ecommerce Analysis

Revenue Per Employee (RPE) by Category

The overall average RPE was RPE RPE w/ Contractors
$3,500,000
$1.35m. When including
3.1m
contractors it dropped to $764k.
$3,000,000

Sports & Outdoors brands had

$2,500,000 2.3m
the overall highest RPE, as a
standalone metric and after
including contractors. $2,000,000
1.7m

Electronics and Health & Beauty $1,500,000

1.2m
were the only other two 1.0m
$1,000,000 1.7m 926k
categories to represent an 777k 698k 651k
average above $1m in RPE. 603k 600k
$500,000 407k 333k
*There were only 3 Sports &
Outdoor brands included $0
Sports & Electronics Health & Pets & Animal Apparel & Food & Books, Movies,
Outdoors Beauty Care Accessories Beverage Games

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 Ecommerce Analysis

Ad Spend as a %
50% or more 0%

of Total Sales
Less than 10%
When it comes to ad spend, here’s how 20% to 50%
much ecommerce founders are
spending as a % of total sales.

The majority are spending 20% or less

of their sales on ad spend with 5% of
founders getting by without any ad
spend at all.

2 founders who said they spent 50% or

more were also bringing in more than
$20m in revenue and had 15% or more
net margins.
10-20%

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 Ecommerce Analysis

Best Marketing Platforms

We asked founders what marketing
channels served them best in 2023. Meta* 23

Meta was the most widely given answer, Google 10

but Google was not far behind.

Podcasting/Audio 3

Podcasting and Influencers are the next Influencers 2

best with a variety of others coming in
YouTube
afterwards.. 1

Snap 1
*The data received was mixed between
Email 1
Facebook, Instagram, and Meta. However,
more founders did call out Facebook as
Amazon
their best marketing platform than 1
Instagram 0 5 10 15 20 25

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 Ecommerce Analysis

Worst Marketing Platforms

As for the worst marketing TikTok 4
platforms in 2023?
Google 2

TikTok was by far the winner as the YouTube 1

worst platform. With Google, Social 1
YouTube, and a variety of others
coming up next. Radio 1

Native 1
It’s worth noting: Meta 1
While TikTok came up as one of
the worst marketing platforms in Kickstarter 1
2023, it’s also one of the top ones Influencer 1
most brands are excited about in
2024 (as you’ll see on the next Events 1

slide). Connected TV 1
0 1 2 3 4

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 Ecommerce Analysis

Most Exciting Marketing Platform

We asked founders what marketing channel Meta 9
they are most excited about in 2024. TikTok 6
Partnerships & Influencers 5
Meta was the most widely given answer with Referrals & Affiliates 3
9 votes, but TikTok and Podcast & Audio 3
Partnerships/Influencers were right behind Organic 2
with 6 and 5 votes respectively.
YouTube 1
Sampling 1
An interesting stat to consider:
Native Advertising 1
The group of businesses excited about
LinkedIn 1
Partnerships and Influencers category in
Events 1
2024 had the highest average revenue
Email 1
($66.5m) and average profit ($17.6m).
Amazon 1
0 2 4 6 8 10

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 Ecommerce Analysis

How Much Owner’s Pay Themselves

<$100k 36% <$100k $100k-$200k $200k-$650k
$1.8m-$3m

$100k-$200k 22%

$200k-$650k 31%

$1.8m-$3m 11%

Overall Average $385k

It’s worth noting that multiple founders mentioned

paying themselves less for tax purposes.

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 Ecommerce Analysis

Overall Sentiment
Ecommerce owners have mixed feelings but are generally optimistic about the future. Despite facing various challenges,
they're gearing up to improve in 2024 with several strategies:

Focus on Efficiency and Profitability:

Founders mention optimizing marketing spend, reducing headcount or changing suppleirs, and improving
profit margins.

Leveraging affiliate sales, PR, and exploring new sales channels beyond
Innovation & Change
Amazon. The focus also extends to product development and suppliers.

Adapting to Changing With shoppers changing how they spend their money, brands are looking to
Consumer Behavior: market and sell more effectively.

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 Ecommerce Analysis

PS: A little bit about Hampton

Listen, I'm going to be honest with you - our private member
community is probably not for you.

There are a lot of reasons why you shouldn't join:

It's expensive
You'll be challenged
It's a time investment

And that's OK, it's not for everyone (we're also very picky about
who we let in). But as we can see from this report running a
business is no cakewalk. Sometimes, it's nice to know that when
things get tough you have a squad of experienced founders
ready to go to battle with you. Again, Hampton is probably not for
you... but in case you think it is, you can apply here.

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