I want to share something I’ve been working on. For the past several months I’ve been analyzing the financials of ecommerce brands doing one million to seventeen million dollars in revenue.
The data revealed three hidden costs that consistently kill profit — and most owners have no idea they’re bleeding from them.
The first is platform fees. Amazon, Shopify, and payment processors take a combined cut that often runs 20–35% of revenue before you’ve paid for a single unit of inventory. Most sellers underestimate this by 8–12 percentage points.
The second is return costs. Not just refunds — but restocking, repackaging, re-listing, and lost inventory. For some categories, returns destroy profitability on 15–25% of units sold.
The third is ad spend opacity. Sellers track ROAS but not true ad-attributed profit. Ads that look like winners on the dashboard are often break-even or negative when you factor in fees, COGS, and returns on the attributed orders.
These three costs are why revenue grows and cash doesn’t follow. They’re fixable — but only once you can see them clearly.
Ready to take control of your cash flow? Your Profit Team helps ecommerce owners forecast cash, plan inventory, and keep more profit with the Profit First method.
