327: What It Takes To Make 6 Figures Of Profit In Ecommerce With Steve Chou

327: What It Takes To Make 6 Figures Of Profit In Ecommerce With Steve Chou

Making six figures of profit in ecommerce means selling roughly seven orders a day at a $50 average order value, which is what our first year actually required. The number sounds impossible as an annual figure and entirely manageable once you divide it by 365.

In this solo episode I break down the math for each business model, explain what our first year genuinely involved, and address the people who email me insisting the numbers cannot be real.

Below is all of it: the revenue required at different margins, why the daily number is the one to focus on, and why starting today is dramatically easier than it was in 2007.

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Key takeaways

  • Seven orders a day at $50 produces $125,000 in revenue, which was our path to six figures.
  • Margin determines the revenue you need. 33% on Amazon means $300K, and 75% to 95% means far less.
  • Break the goal into daily numbers so slow early months do not look like failure.
  • My wife and I packed together, and I did all the sewing and embroidery after a 50-hour work week.
  • Everything is easier now. FBA, 3PLs, and hosted carts did not exist when we started.
  • Start on Amazon to validate demand, then build your own site once sales are consistent.
  • Six figures is not exceptional anymore. Over a hundred podcast guests have exceeded it.
  • Friends with day jobs are the wrong audience for advice about a path they did not choose.

Why people doubt that six figures is achievable

I still get three to five emails a week from people who do not believe meaningful money can be made in ecommerce.

A recent one stated plainly that the figures do not add up, and that there is no way my wife made $100,000 in profit in her first year while doing most of the packing herself.

The scepticism is predictable rather than malicious. People tend to doubt any path they have not chosen for themselves.

The lack of support was the hardest part of starting in 2007. We had nobody to talk to, compare strategies with, or share experiences with.

Six figures is not even unusual now. Over a hundred guests on this podcast have well exceeded it, including Ryan Moran with seven figures in revenue at roughly 30% margin in his first year, and Toni Anderson with $190,000 in her first seven months selling jewelry.

How much revenue six figures of profit actually requires

The revenue target depends entirely on which business model you choose.

Business modelTypical marginRevenue needed for $100K profit
Reselling other people’s products~50%$200,000
Selling on Amazon after fees and product costs~33%$300,000
Importing your own products (our store, 2007)75% to 95%$105,000 to $133,000

Our situation had two advantages beyond the margin. We ran everything from our garage with essentially zero overhead, and our shipping rates were high enough that we made money on shipping.

Using $125,000 as the round figure, the daily number falls out immediately. That is $342 a day, and at a $50 average order value it means seven orders.

Why the daily number matters more than the annual one

Seven orders a day is a target you can picture, and $100,000 in profit is not.

The psychological difference is what keeps people going. Thinking in annual terms during a slow first year makes the goal look unreachable and quitting look sensible.

We knew we needed six or seven orders daily, which meant a slow week read as a slow week rather than as evidence the business would not work.

The broader point is that replacing a day job income does not require building the next Walmart. It requires a specific, modest, daily number.

What our first year actually involved

The reader who said packing seven orders daily alongside a full-time job is impossible was wrong, and it was genuinely hard.

My wife was not doing it alone. I finished work around 6pm, ate dinner, and packed with her until late.

I also handled all the sewing and embroidery that first year. My wife loved sewing as a hobby and hated doing it for money, so rather than abandon a product line running 95% margins, I ran the machines.

That came after 50 to 55 hour weeks designing microprocessors.

The honest answer on whether it is grueling is yes. The honest answer on whether it is impossible is no.

Why starting an ecommerce business is easier now

Every constraint we worked around in 2007 has since been solved.

Fulfillment did not exist as a service. Amazon FBA was not an option and third party logistics firms were scarce, so we packed and shipped everything ourselves and dedicated space in our house to inventory.

Today FBA handles shipping, fulfillment, customer service, and returns, so you need no physical address and never answer a support call. Plenty of 3PLs serve the same function outside Amazon.

Websites were the other constraint. The choices were downloading open source software and running your own server, or building something yourself, since good hosted platforms did not exist.

Getting a site designed required real money if you had no design skills. Now a hosted platform gets you live in a day, and open source options exist for anyone wanting more control.

Why to start on Amazon before building your own site

Amazon’s built-in marketplace removes the hardest problem for a beginner, which is traffic.

Driving traffic to your own branded site is genuinely difficult and requires skill you do not have on day one.

A well-researched product on Amazon will generally sell regardless, particularly during the holidays.

My own first launch made $3,000 in its first month with zero reviews, no giveaways, and no promotion.

The sequence I recommend is straightforward. Validate demand and product viability on Amazon, launch your own branded site once sales are consistent, then expand to as many marketplaces as possible while concentrating your effort on the site you own.

Where to get advice instead of your friends

People who cannot relate to what you are doing will not support it, and people who do not understand it are poor sources of advice.

That is not a character judgment. It is a predictable consequence of asking someone about a path they have not walked.

Replace them rather than convince them. An entrepreneurship community or a conference puts you around people who have solved the problems you are facing.

The support gap is what made our own start hardest, and it is the one thing that is entirely within your control to fix.

Frequently asked questions

How much revenue do you need to make six figures in ecommerce?

It depends on margin. Reselling at roughly 50% needs $200,000, Amazon at roughly 33% after fees needs $300,000, and importing your own products at 75% to 95% needs only $105,000 to $133,000.

How many orders a day is six figures of profit?

For our store, seven. A $125,000 revenue target divided by 365 days is $342 a day, and at a $50 average order value that is seven orders.

Can you run an ecommerce store alongside a full-time job?

Yes, and it is demanding. My wife and I packed together after I finished a 50 to 55 hour work week, and I handled all the sewing and embroidery on top of that during our first year.

Is six figures in ecommerce realistic in the first year?

It is common enough that it is no longer impressive. Over a hundred guests on this podcast have exceeded it, including one student who made $190,000 in her first seven months selling jewelry.

Should you start on Amazon or your own website?

Amazon first. Driving traffic to your own site is the hardest skill for a beginner, and Amazon’s marketplace means a well-researched product will generally sell. Build your own site once sales are consistent.

Is ecommerce harder to start now than it used to be?

Considerably easier. FBA and 3PLs did not exist when we started, so we packed everything ourselves and stored inventory at home. Hosted platforms now get a store live in a day.

Why do people doubt ecommerce income claims?

Because people tend to doubt any path they have not chosen themselves. It is not malice, and it does make friends with full-time jobs the wrong people to ask for advice.

How do you stay motivated during a slow first year?

Track the daily number rather than the annual one. Seven orders a day is a target you can picture, and a slow week reads as a slow week rather than as proof the business will not work.

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