Revenue is a marketing number. This is the truth about your margin.

Why I'm writing this#

Over the last few years at Miranda Media I've seen dozens of e-shops from the inside. Some with millions in monthly revenue. And the same pattern repeats: the owner watches revenue, traffic, ROAS, order count. Everything is growing nicely. And when I ask them how much actually stays at the end of the month, they start scribbling on a napkin. And realise the number is much smaller than they thought.

This article is what I'd want every e-shop owner we've worked with to read — before we even start talking about ads, creative, or SEO. Because if you don't know what each thing actually earns you, you can't optimize anything.

Warby Parker, Allbirds and the 1,600-brand paradox#

In 2021 a number of e-commerce brands collapsed that no one would have guessed. They had great PR, billion-dollar revenues, investor darlings. Warby Parker and Allbirds were growing in revenue — and growing in losses at the same time (k38 Consulting). Many lesser-known brands quietly turned their systems off. The reason wasn't lack of customers. They ran out of money.

Even more revealing: Unilever. A global giant with 1,600 brands found that 90 % of profit came from just 400 of them (k38 Consulting). The rest — 1,200 brands — at best swallowed fixed costs, at worst actively bled money. And that's a company with an army of analysts and controllers.

There's one point from my own practice that keeps coming back: revenue lies. Margin doesn't. And if you rely on the numbers in standard dashboards — Google Analytics, Shoptet, Shopify Admin — you probably don't actually know how much you earn.

What the numbers really show#

Let's look at the industry as a whole. Data from 2024 and 2025 is brutal.

According to Finaloop ecommerce benchmarks — an analysis of thousands of DTC brands for 2024:

• Median EBITDA in e-commerce in 2024 was just 5 %.
• Median net margin: 3 %.
• EBITDA margins have been falling for the fourth year in a row.

That means out of every 100 dollars of revenue, only 3 dollars stayed at the end of the year. And that's the median — half of all e-shops did even worse.

The hardest-hit categories (Finaloop, 2024):

Category	Gross margin	Note
Sporting goods	43 %	Lowest in the industry
Home & garden	~50 %	Several years of negative growth
Fashion & apparel	50–55 %	But 25–31 % return rate
Health & beauty	60–66 %	+20 % YoY growth
Marketplaces	varies	Consistently profitable

And now the worst finding. Analytics platform Conjura with Linnworks found that 62 % of SKUs across e-commerce are not profitable. Worse — 32 % of SKUs with active advertising generated zero revenue. Nearly a third of products that ad spend is poured into don't move at all.

This is something we see at Miranda Media all the time. A client comes in, we go through their product feeds and ad campaigns — and find that 30 % of the budget is going to products that haven't sold in the last 3 months. Not selling badly. Not at all.

Bonus from Okiela (2025): most Shopify merchants underestimate their real costs by 15–25 %. When you think you have 40 %, you probably have 30 %. When you think 20 %, you have 5 % — or you're in the red.

The hidden costs nobody tells you about#

Returns: the silent margin killer#

According to Eightx return benchmarks (2026), the average e-commerce return rate is between 19 and 20.5 %. For fashion it's 25 %, sometimes up to 31 %.

Key insight: A 25 % return rate doesn't reduce your contribution margin by 25 %. It cuts it by 70 %.

Why? Every return adds:

• Reverse shipping: 6–12 USD
• Restocking labor: 3–8 USD per unit
• Goods devaluation: 10–50 % of value
• Lost sale (item may not resell at full price)

Real CAC is 30–60 % higher than Meta shows#

This is possibly the most dangerous myth and something we deal with at almost every client. Per Eightx unit economics analysis, real CAC is typically 30–60 % higher than what the ad platform dashboard reports.

In our practice at Miranda Media we see this exactly. When I take a client's Meta Ads account that reports CAC of 400 CZK, and add creative production, agency fees and iOS attribution losses, the real number is usually 550–650 CZK. That difference decides whether an acquisition campaign makes sense or not.

Inventory holding costs: 20–41 % of stock value per year#

Per Branvas inventory cost analysis, typically 20–30 % of inventory value per year, but for DTC and Shopify brands often 22–41 %.

Component	% of stock value/year
Cost of capital	8–15 %
Storage & handling	4–10 %
Insurance & shrinkage	1–3 %
Obsolescence & markdowns	6–12 %
Admin & IT	3–6 %

And then there's dead stock — items that simply don't sell. That can cost up to 11 % of your revenue. If you have an SKU sitting in storage for 90+ days, it costs you three times what fast-movers cost.

Worked example: the 60 % margin that was actually 31 %#

This isn't theory. A real anonymized e-shop analyzed by Okiela:

• The owner was convinced he had a 60 % margin.
• Real margin after counting all hidden costs: 31.5 %.
• Monthly difference: 12,800 USD.
• Annual difference: roughly 154,000 USD.

This owner wasn't dumb. He was wrong because standard tools never showed him all those costs in one place. And that's exactly why we started building Margly — because we kept solving the same problem in miniature for every client at Miranda Media.

How to calculate true profit (a formula that works)#

Let's be clear what an honest equation looks like:

True Profit = Revenue
            − COGS (real purchase price)
            − Payment gateways
            − Real shipping
            − Returns (including reverse shipping)
            − CAC allocated per order
            − Platform & app fees
            − Storage & fulfillment

For day-to-day business management, two layers of contribution margin are used:

CM1 = Revenue − COGS − shipping − payments − returns

• Target for DTC brands: 45–65 %
• Below 40 %: you have a cost-structure problem.
• Below 20 %: no room left for retention, ops, or overhead.

CM2 = CM1 − variable marketing (CAC)

• Target: 30 %+

What to do about it: 4 steps that make sense#

1. Identify unprofitable SKUs and decide#

Real case from Eightx case study: A CPG brand with 18M USD revenue had 24 SKUs, 6 of them in negative contribution margin. Eliminating or repricing those six returned over 400,000 USD a year within two quarters.

2. Track margin per channel, not in aggregate#

The same product can have 55 % CM1 on DTC and 32 % on Amazon. The same is true in CEE for Heureka, Zboží.cz or Allegro. Commissions, free shipping promotions and platform-mandated promos can knock 10–15 percentage points off margin.

3. Don't confuse ROAS with profitability#

ROAS tells you how much revenue one dollar of ad spend brings in. It tells you nothing about whether you make profit on it. High ROAS with low contribution margin is a path to cash burn.

4. Start with what you can see — then add what you can't#

Only when you connect e-shop data, ad data, supplier invoices and logistics data together do you get a real picture.

Where Margly fits in#

This is exactly the problem we're trying to solve with Margly at Miranda Media. It works as an AI advisor that takes data from your e-shop, joins it with ad platforms (Google Ads, Meta, Sklik), with purchase prices from invoices (even from PDFs), and tells you what's wrong and what to do about it.

In practice that means things like:

"3 of 12 products have margins below 20 %. Stop advertising them. Estimate: −20 to −200 EUR/month on wasted ads."

"Second purchase is happening almost a year later. An email sequence cuts that in half. Estimate: +1,000 to 1,600 EUR/year."

"Slovakia is doing 10 % of orders without any investment. Estimate: +320 to 600 EUR/month from expansion."

Conclusion: the only number that really matters#

Half of all e-shops, per Finaloop data, have no real market value — because they don't make a profit. The other half doesn't run on revenue. They run on knowing their unit economics.

Revenue is a marketing number. It looks great in a pitch deck, on LinkedIn, in interviews. But what keeps a business alive is profit — and that's not measured by how much you sell. It's measured by how much actually stays.

If you take one thing from this article, let it be this: find out your real number. Not the one you think you have.

Frequently asked questions#