Shopify Store Not Profitable? A $100K/Month Store Losing $9,930, Fixed in 7 Steps

This store sells $100,000 a month and loses almost $10,000. Every month.

Most owners would try to fix that with more traffic. Here, 10% more traffic would add about $700. Barely anything. Instead, seven changes turned it into almost $10,000 of profit a month, with the same products, the same team and less ad spend. One of those changes was worth more than all the ad cuts combined.

The store is an illustrative US example, not a client. Every number comes from my free store profit calculator (linked in the video description), so you can run the same numbers on your own store. Prices are before sales tax, with Shopify Payments US fees and a 21% federal tax rate.

What gets measured gets improved. So let’s measure.

Why I look at stores this way

For one Shopify Plus brand I worked with, we rebuilt the checkout. The next month, revenue went from $400,000 to $530,000: 2% fewer visitors, 36% more orders. (The seven checkout changes.) That’s the same lever you’ll see in step four below. The store in this article is an example, but this is exactly how I look at every real brand: start with where the money goes.

Part 1: where the money goes

Quick question before the numbers: out of every $100 this store sells, how much do you think it keeps? Think about your own store too.

The example store:

• 62,500 visits a month
• 1.6% conversion rate
• $100 per order
• 1,000 orders and $100,000 in sales

Now follow the money down:

1. Discounts: 12% of sales goes out in discount codes.
2. Returns: 14% comes back as returns. Real revenue is now $75,000, not $100,000. Almost a quarter is gone before paying for a single product.
3. Product cost: 38%.
4. Shipping: $10 an order.
5. Card fees: almost 3%.

What’s left is CM2, contribution margin two: here, $34 per order. That’s what one order really leaves you before ads.

6. Ads: $27,000 a month, 36% of revenue. After ads, CM3 is only $7,000.
7. Team, agencies, apps and overhead: $17,000.

Net profit: −$9,930 a month. Out of every $100 it sells, the store keeps nothing. It pays $10 to make the sale.

Part 2: the numbers that tell you what’s wrong

Before you change anything, read the scorecard.

Metric	This store	Common benchmark	Verdict
Conversion rate	1.6%	Shopify average ~1.4%, top 20% above 3.2%	Average, not good
CM3 (margin after marketing)	9%	20–25% for a healthy brand	Too low
MER (revenue ÷ total ad spend)	2.8	Break-even here is 2.2	Ads barely pay for themselves
LTV : CAC	1.3 : 1	3 : 1	A customer costs $36 and brings $48 of profit a year

An MER of 2.8 against a break-even of 2.2 means some campaigns are definitely losing money. Write down your own conversion rate now, or guess it; we’ll come back to it.

Part 3: the trap of more traffic

Imagine a chart where each bar improves one number by 10% and shows what it does to profit.

Most store owners want more traffic first. But 10% more visitors, at the same cost per customer, adds only about $700 a month, and you’d spend $2,700 more on ads to get it.

When a store leaks, more traffic just pours more water into a leaky bucket. Order value and conversion rate have the longest bars, so that’s where we go, right after we stop the bleeding.

Part 4: seven changes, in the order I’d make them

Step	Change	Profit impact / month
1	Cut ads below break-even MER	+$3,600
2	Stop sitewide discounts	+$1,900
3	Bundles and a free-shipping threshold	+$3,500
4	A/B-tested CRO	+$5,826
5	Fewer returns	+$2,200
6	Better product cost	+$1,600
7	Cheaper shipping	+$900

Step 1: cut ads below break-even

Stop the bleeding. Compare every campaign’s MER with your break-even MER: anything below it is losing money, even if Meta says it’s profitable. Break-even MER is simply your revenue divided by what one order leaves you; the calculator shows it next to your real MER. Here it’s 2.22, so any campaign returning less than $2.22 of real revenue per dollar spent goes.

We cut $5,000 of spend. We lose about 4% of visits, but profit rises $3,600.

Step 2: stop sitewide discounts

Instead of a code that runs all year, give value: a free gift above a threshold, and codes only for first orders. Discounts drop from 12% to 8% of sales. Also check influencer and affiliate codes; many only discount people who would have bought anyway.

Another $1,900 a month. A/B test it, because cutting discounts can lower conversion.

Step 3: bundles and a free-shipping threshold

Raise average order value. Add a bundle option right above Add to Cart, set free shipping a bit above your average order so people add one more item, and add a one-click upsell after checkout, when the customer has already said yes. AOV goes from $100 to $108: +$3,500. We’re almost at zero. (The full AOV playbook: how to increase average order value.)

Step 4: A/B-tested CRO, the biggest jump

Conversion rate. Put shipping costs, delivery time and the returns policy right next to the price. Move real reviews close to the button. Make the mobile checkout faster. Every change A/B tested: half the visitors on the old page, half on the new one.

Conversion goes from 1.6% to 1.9%: +$5,826. The store is profitable. One round of tests, worth more than all the ad cuts together.

But only if you test properly:

• split the traffic 50/50;
• let every test run at least two full weeks, so it sees weekdays and weekends;
• don’t stop early because the first days look good;
• test one change at a time, so you know what worked;
• pick the winner on revenue per visitor, because a change can lift conversion and lower order value at the same time.

Remember the traffic bar? After this step, scaling traffic finally makes sense. The last three steps look small, but together they add more than cutting the ads did.

Step 5: fewer returns

A real size guide, more photos on real people, and honest descriptions. Look at returns by product: usually a few products cause most of them, so start there. Returns drop from 14% to 10%: +$2,200.

Step 6: better product cost

With more orders, renegotiate with the supplier and switch to smaller packaging. Push higher-margin products in ads and bundles. Product cost falls from 38% to 36%: +$1,600.

Step 7: cheaper shipping

New carrier rates and smaller boxes, $1 less per order: +$900.

Part 5: before and after

Metric	Before	After
Sales	$100,000	$123,000
Ad spend	$27,000	$22,000
CM3	9%	almost 29%
MER	2.8	4.6
Profit per order	$34	$45
Net profit / month	−$9,930	+$9,762

That’s a swing of almost $20,000 a month, around $236,000 a year.

And look at the traffic bar now: 10% more traffic is worth about $2,300 a month, more than three times what it was. The bucket doesn’t leak anymore. Now it’s time to scale.

The scorecard shows the next job: LTV:CAC is now 2.5:1, better but still under 3, and customers buy 1.4 times a year. So the next project is retention: email and SMS flows, a reason to reorder, and a loyalty offer for the second purchase.

Part 6: where to find your numbers

Most of them are already in Shopify.

• Shopify Analytics, last 30 days: sessions, conversion rate, average order value.
• Sales breakdown: gross sales, discounts, returns and net sales, so you can work out your discount and return percentages.
• Customer reports: orders from new versus returning customers.
• Product cost: add the cost per item to each product; depending on your plan, Shopify then shows gross profit too.
• Shipping and fulfilment: carrier or warehouse invoices.
• Payment fees: your payouts.
• Ad spend: each ad platform.
• Team, agencies, apps and overhead: your bank statement or accountant.

Use the same 30 days for every number, otherwise the result won’t add up.

Part 7: do this on your store

1. Put your real numbers into the store profit calculator.
2. Read the scorecard.
3. Find the longest bar and open its card under “how to improve each number”.
4. Pick one action, write a hypothesis, and A/B test it. Judge it on revenue per visitor, not conversion rate alone.
5. When it wins, update the number. The next longest bar tells you what to fix next.

And make it a habit. Every Monday, check seven numbers: sessions, conversion rate, average order value, refund rate, profit per order, MER against break-even, and orders from new versus returning customers. If one moves the wrong way, you’ll see it in a week, not at the end of the quarter.

The biggest jump in this example came from step four: the A/B tests. If you want to see what those tests look like on a real store, read how to increase Shopify sales without paid ads.