E-Commerce Business Plan: From Shopify Store to Investor Deck

E-Commerce Is a Business, Not Just a Website

The barrier to launching an online store has never been lower. Shopify, WooCommerce, and BigCommerce let you go live in a weekend. But the barrier to building a profitable e-commerce business remains high. Over 90% of e-commerce startups fail within the first 120 days, according to Marketing Signals research. The businesses that survive are the ones that plan beyond the product page.

An e-commerce business plan forces you to confront the math: customer acquisition costs, fulfillment expenses, return rates, and the marketing spend required to grow. Whether you are seeking an SBA loan, pitching investors, or simply want to validate your business model before investing your savings, the plan is where strategy meets arithmetic.

Choosing Your E-Commerce Platform

Your platform decision affects cost structure, scalability, and operational complexity. Here is how the major options compare for business plan purposes:

Shopify

• Monthly cost: $39 - $399/month (Basic to Advanced), plus 2.4-2.9% + $0.30 per transaction
• Best for: Direct-to-consumer brands, dropshipping, physical products
• Scalability: Handles up to $1M+ in annual revenue before needing Shopify Plus ($2,300+/month)
• Ecosystem: Largest app marketplace, 8,000+ apps for marketing, fulfillment, and analytics

WooCommerce (WordPress)

• Monthly cost: $30 - $200/month for hosting, plus payment processing fees, plus plugin costs ($50-300/year per plugin)
• Best for: Content-heavy brands, businesses needing maximum customization, companies with technical resources
• Scalability: Unlimited, but requires more technical management as you grow

Amazon FBA

• Monthly cost: $39.99/month seller fee plus FBA fees ($3-8 per unit depending on size/weight) plus 8-15% referral fees
• Best for: Product-focused sellers who want access to Amazon's 200M+ Prime members
• Scalability: Massive reach, but lower margins and less brand control

Your business plan should justify your platform choice with specific cost projections. A common mistake is choosing a platform based on features without modeling the total cost at your projected sales volume.

Unit Economics: The Numbers That Matter

Unit economics determine whether your e-commerce business can ever be profitable. Include these metrics in your financial projections:

Customer Acquisition Cost (CAC)

How much you spend to acquire a single customer. Calculate it by dividing total marketing spend by number of new customers acquired. Industry benchmarks:

• Facebook/Instagram ads: $15-$70 CAC for DTC brands (varies enormously by niche)
• Google Shopping: $20-$50 CAC for competitive categories
• Organic/SEO: Lower CAC ($5-$15) but takes 6-12 months to build
• Influencer marketing: $10-$40 CAC when done well, but highly variable

Average Order Value (AOV)

The average amount spent per transaction. The industry average across all e-commerce is approximately $85-$120, but this varies by category. Apparel averages $100-$130, beauty and cosmetics $60-$80, and home goods $150-$250. Your business plan should include specific strategies to increase AOV: bundles, upsells, free shipping thresholds, and cross-sells.

Customer Lifetime Value (LTV)

Total revenue from a customer over their entire relationship with your brand. Calculate it as: AOV x purchase frequency x average customer lifespan. For most e-commerce businesses, a healthy LTV:CAC ratio is 3:1 or higher. If your LTV is $150 and your CAC is $50, the ratio is 3:1 -- sustainable. If your CAC exceeds your LTV, you are losing money on every customer.

Contribution Margin

Revenue minus variable costs per order. Include: product cost (COGS), shipping, packaging, payment processing (2.9% + $0.30 typical), returns (industry average: 20-30% for apparel, 5-10% for other categories), and customer service cost per order. A healthy contribution margin for DTC e-commerce is 60-70% before marketing.

Fulfillment Models

Fulfillment is where many e-commerce businesses underestimate costs. Your plan should detail one of these approaches:

Self-Fulfillment

Packing and shipping from your own space. Viable up to roughly 50-100 orders per day before it becomes unsustainable. Costs include warehouse/storage space ($8-$15/sq ft annually), packing materials ($1-$3 per order), and labor.

Third-Party Logistics (3PL)

Companies like ShipBob, ShipMonk, or Deliverr handle warehousing and fulfillment. Typical costs: $5-$15 per order (pick, pack, and ship) plus $10-$40/pallet/month for storage. Most 3PLs require minimum volumes (50-200 orders/month) and charge onboarding fees ($500-$2,000).

Dropshipping

Suppliers ship directly to customers. No inventory risk, but margins are thin (15-30% gross margin vs. 50-70% for private label), shipping times are often longer, and quality control is limited. Include these trade-offs honestly in your business plan.

Marketing Budget Allocation

E-commerce marketing spend typically runs 15-30% of revenue in growth phase, stabilizing at 10-20% at maturity. Here is a realistic allocation for a DTC brand in Year 1:

• Paid social (Facebook, Instagram, TikTok): 40-50% of marketing budget
• Google Ads (Search + Shopping): 20-30%
• Email marketing and retention: 10-15%
• Influencer and affiliate partnerships: 10-15%
• SEO and content: 5-10%

A critical mistake in e-commerce business plans is budgeting for paid acquisition without accounting for rising costs. Facebook CPMs have increased roughly 30-40% over the past three years. Build a 10-15% annual increase in paid media costs into your projections.

Financial Projections for E-Commerce

Your e-commerce financial model should show monthly projections for Year 1 and quarterly for Years 2-3. Key assumptions to document:

• Traffic sources and conversion rates (industry average: 1.5-3% for cold traffic, 3-8% for email/retargeting)
• Monthly customer acquisition targets and associated ad spend
• Repeat purchase rate (aim for 25-40% within 12 months for consumable products)
• Gross margin targets by product category
• Inventory turnover (4-6x annually for most consumer products)
• Seasonal patterns (Q4 typically represents 30-40% of annual revenue for many e-commerce businesses)

Common E-Commerce Business Plan Mistakes

• Projecting profitability too early: Most DTC brands are not profitable until they reach $2-5M in annual revenue. Show a realistic path to profitability, not a fantasy one
• Ignoring returns: Returns cost money -- restocking, shipping, and lost product value. Budget for them explicitly
• Assuming organic traffic will carry the business: SEO takes time. Plan for paid acquisition to drive early revenue
• No inventory financing plan: You need to buy inventory before you sell it. If your product costs $10 and you need 5,000 units, that is $50,000 tied up before you make a sale

Building a defensible e-commerce business plan requires getting the unit economics right from day one. BizPlanForge can generate financial projections tailored to your e-commerce model -- including CAC, LTV, and fulfillment cost scenarios -- so you can pressure-test your assumptions before investing real money.