Costs · Margins · The business of ecommerce
Most 'average margin by niche' articles quote each other in a circle. We went to the three sources that actually publish numbers: NYU Stern's sector dataset, SEC annual reports, and Shopify's own rule of thumb.
Search “profit margins by niche” and you will find dozens of tables with suspiciously confident numbers: 40% net in beauty, 25% in pet supplies, 15% in electronics. Follow the footnotes and they lead to other blog posts, which lead to other blog posts, which lead nowhere. Almost nobody selling online publishes their margins, so the confident tables are mostly invented.
There are, however, three places where margin numbers are actually published and checkable: NYU Stern’s sector dataset, which aggregates thousands of US public companies every January; the annual reports that public ecommerce companies file with the SEC; and the rule-of-thumb ranges Shopify itself publishes. This briefing puts all three in one place and nothing else.
Every January, NYU Stern professor Aswath Damodaran publishes margin averages for every US sector, computed from company filings. It is the closest thing to an official “margins by industry” table that exists, and it is free. The January 2026 edition covers 5,994 firms.
The catch for store owners: sectors are not niches. “Apparel” includes manufacturers, “Household Products” includes Procter & Gamble. Treat these as the gravity field your niche lives in, not your personal forecast.
Here is the fuller table, mapped to the store niches people actually search for. Click a heading to sort.
| Sector (typical store niche) | Firms | Gross margin | Net margin | EBITDA / sales |
|---|---|---|---|---|
| Apparel (clothing stores) | 35 | 56.9% | 3.9% | 11.5% |
| Shoe (footwear) | 11 | 43.9% | 6.3% | 11.9% |
| Household & personal products (beauty, home care) | 110 | 51.0% | 11.7% | 22.3% |
| Furniture / home furnishings | 27 | 30.3% | 1.1% | 9.8% |
| Electronics, general (gadgets, accessories) | 114 | 26.8% | 6.5% | 12.4% |
| Electronics, consumer & office | 8 | 38.8% | -9.4% | -2.7% |
| Food processing (packaged food and drink) | 78 | 23.2% | 2.8% | 15.3% |
| Recreation (sports, hobby, outdoor) | 49 | 39.8% | -4.7% | 16.6% |
| Retail, general (broad catalog stores) | 23 | 33.2% | 5.6% | 10.1% |
| Retail, special lines (single-category stores) | 94 | 35.3% | 5.2% | 9.9% |
| Retail, grocery and food | 15 | 26.3% | 1.3% | 5.4% |
| Total market (5,994 firms) | 5,994 | 37.8% | 9.7% | 16.6% |
Source: NYU Stern, Margins by Sector (US), data as of January 2026. Niche labels in parentheses are ours; the sector definitions are NYU's.
Two patterns worth memorizing. First, high gross margin does not mean high net margin: apparel keeps 56.9 cents of every dollar after making the product and only 3.9 cents after selling it, because fashion burns the difference on marketing, markdowns and returns. Second, the sectors people call “terrible margins” (electronics at 26.8% gross) and “great margins” (beauty inside household products at 51% gross) end up much closer on the net line than the gross line suggests.
Sector averages blend thousands of companies. Annual reports show individual, named businesses, audited and signed. We pulled the fiscal 2024 figures for nine well-known ecommerce companies straight from SEC EDGAR’s structured filing data.
| Company (niche) | Revenue, FY2024 | Gross margin | Net margin |
|---|---|---|---|
| Hims & Hers (wellness / personal care) | $1.48B | 79.5% | 8.7% |
| Etsy (handmade marketplace) | $2.81B | 72.4% | 5.8% |
| FIGS (medical apparel) | $0.56B | 67.6% | 6.2% |
| Warby Parker (eyewear) | $0.77B | 55.3% | 0.2% |
| Revolve (fashion) | $1.13B | 52.5% | 4.4% |
| Amazon (everything) | $637.96B | 48.9% | 12.2% |
| Allbirds (footwear) | $0.19B | 42.7% | -49.2% |
| Wayfair (furniture) | $11.85B | 30.2% | -4.2% |
| Chewy (pet supplies) | $11.86B | 29.2% | 1.9% |
From each company's 10-K annual report via SEC EDGAR, pulled July 2026. Fiscal 2024 ended December 31, 2024 for all companies except Chewy (February 2, 2025). Etsy is a marketplace, so its "revenue" is fees on other people's sales, which inflates its margins relative to retailers.
The spread between columns is the whole lesson. Warby Parker made 55 cents gross on every dollar and kept two hundredths of a cent net. Allbirds made a healthy-looking 42.7% gross margin and still lost 49 cents per revenue dollar, because gross margin says nothing about how much you spend convincing people to buy. Meanwhile Chewy runs the thinnest gross margin on the list (29.2%) and still lands a positive net, because pet food buyers come back monthly without being re-advertised to.
If you want to know where your money actually goes per order rather than per year, we broke down a single sale line by line in Shopify fees per sale.
Shopify’s editorial guidance, republished March 25, 2026, puts average retail gross margin at 30% to 50% and average net margin at 2% to 10%, and calls roughly 10% net “average”, 20% “high” and 5% “low” territory for small businesses in general. It is a coarse range, but notice how well it agrees with the two datasets above: NYU’s retail sectors net 1.3% to 6.3% (with household products the outlier at 11.7%), and the nine SEC-filed companies land between a 49% loss and 12.2% net.
That agreement is the useful finding. Three unrelated sources, one built from 5,994 filings, one from nine audited annual reports, one from the largest commerce platform’s own editorial team, all describe the same world: gross margins of 30% to 55% for physical products, net margins in the low single digits to about 12%.
Set your gross margin floor from the sector table. If your landed product cost puts you below your sector’s published gross margin (say 40% in apparel when the sector runs 56.9%), you have no room for the marketing spend that the net margin gap represents. Fix price or cost before spending on ads.
Treat 10% net as a good year, not a starting assumption. Business plans that assume 25% net margins are assuming performance that Amazon, with its scale and its ad business, roughly hits and most named brands do not. If your first-year model needs 25% net to survive, the model is the problem. The full cost side of the ledger is usually where those models go wrong.
Watch the gap, not the levels. The distance between your gross and net margin is your operating spend, and it is the only lever fully in your control. Warby Parker’s 55-point gap and Chewy’s 27-point gap are two different businesses, not two different levels of discipline.
We included only sources that publish their numbers with a named methodology: NYU Stern's sector dataset (read July 2026, data as of January 2026), SEC EDGAR structured filing data (pulled July 2026, fiscal 2024 annual reports), and Shopify's editorial guidance (published March 25, 2026). Revenue figures are rounded to two decimals of a billion; margins are computed from filed revenue, gross profit (or revenue minus cost of revenue where gross profit is not tagged) and net income.
We deliberately excluded the "margin by niche" tables that circulate on marketing blogs, because none we checked cite a primary source, and several contradict each other on the same niche by 20 points or more. We also excluded survey-based claims where the sample and question wording are unpublished. If a niche you care about is missing here, that is the honest answer: no one has published a checkable number for it.
Shopify's published guidance puts average retail gross margin at 30% to 50% and net margin at 2% to 10%, and the filed data backs that up. NYU Stern's January 2026 sector dataset shows net margins of 5.6% for general retail and 3.9% for apparel, so a small store clearing 10% net after paying its own ad costs is doing well, not average.
In the published data, products with cheap goods and expensive perceptions lead on gross margin: Hims & Hers (personal wellness) filed 79.5% gross and Etsy (a marketplace, not a retailer) 72.4% for fiscal 2024, while NYU's household and personal products sector shows 51% gross and 11.7% net. Electronics and furniture sit at the bottom, with sector net margins of 6.5% and 1.1% respectively.
Gross margin only subtracts the cost of the product. Net margin then removes marketing, shipping subsidies, payroll, software, rent and tax. That is how Warby Parker filed a 55.3% gross margin and a 0.2% net margin for the same year: the money was there after making the glasses and gone after selling them.
As a reference frame, yes; as a target, only partly. Small stores usually have worse shipping and payment economics but no headquarters payroll, so their net margins scatter more widely in both directions. The sector gross margins are the more transferable number, because product economics are similar at any scale.