E-commerce is no longer a gold rush; it is a normal business with normal maths. Knowing that maths before you spend on ads is the difference between a store and an expensive hobby.
The unit economics you must know
Gross margin minus fulfilment minus payment fees minus customer acquisition cost equals contribution. If contribution is negative on the first order, you need repeat purchases or a higher average order value to survive.
- Target 60%+ gross margin for paid-traffic products.
- Track cost per acquisition weekly, not monthly.
- Design a second purchase within 60 days.
Where new sellers still win
Narrow niches, local fulfilment advantages, bundles that raise order value and content-led acquisition still work. Generic products sold with generic ads do not.
Marketplace vs own store
Marketplaces give traffic but own the customer. Your own store costs more to fill but compounds through email, WhatsApp and repeat buyers. Most sustainable sellers run both.
Frequently asked questions
- How much capital do I need to start e-commerce?
- A lean start with local sourcing and organic content can begin under PKR 50,000, but plan for a testing budget so you can gather data before scaling.
- Is dropshipping still viable?
- Only with differentiated products, fast shipping and real brand content. Generic long-shipping dropshipping is largely unprofitable now.