E-commerce Validation

Search volume, trends, seasonality

COGS, shipping, fees, margins

Market saturation, unique angle

Reliability, quality, MOQ

Shopify vs Amazon vs Custom

CAC, LTV, channels

How do I validate an e-commerce business idea?

IdeaProof validates e-commerce ideas by analyzing: product demand, competition intensity, profit margins, customer acquisition cost, shipping/logistics feasibility, and supplier reliability.

What profit margin is good for e-commerce?

Target 30-50% gross margin minimum for sustainable e-commerce. After COGS, shipping, returns, marketing, and transaction fees, you need buffer for profitability.

Should I start with dropshipping or hold inventory?

Dropshipping: Low risk ($0-$500 startup), lower margins (10-20%). Inventory: Higher margin (30-50%), brand control, but needs $5K-$20K capital.

How do I validate product demand before stocking inventory?

IdeaProof analyzes: Google Trends, Amazon BSR, keyword search volume, social media mentions, competitor sales estimates, and seasonal patterns.

What's a good customer acquisition cost (CAC) for e-commerce?

CAC should be < 30% of customer lifetime value (LTV). For $50 AOV: Target CAC $10-$15. For $200 AOV: CAC $40-$60 acceptable.

What are the biggest e-commerce red flags?

Red flags: Oversaturated market (100+ sellers), low margins (< 30%), high return rates, seasonal only, complex logistics, commodity products.

What is the global e-commerce market size?

Global e-commerce was $5.8 trillion in 2023, projected to reach $8 trillion by 2027 (9% CAGR). US: $1.1 trillion. DTC growing at 15%.

What's a good e-commerce conversion rate?

Average: 2-3%. Good: 3-5%. Excellent: 5%+. Mobile: typically 50% of desktop. Category matters: fashion 2%, electronics 1.5%, beauty 3%.

What return rates should I expect?

Average return rates: Fashion 20-30%, Electronics 15-20%, Home 10-15%, Beauty 5-10%. Free returns increase conversion but cost 5-10% of revenue.

How much does e-commerce marketing cost?

Expect 15-30% of revenue on marketing. Facebook/Instagram: $0.50-$2 CPC. Google Ads: $1-$3 CPC. Influencer: $100-$10K per post. Email: highest ROI.

What e-commerce platform should I use?

Shopify: Best for most ($29-$299/mo). WooCommerce: Lowest cost, more technical. BigCommerce: Mid-market. Custom: $50K+ investment for enterprise.

What's the e-commerce startup failure rate?

80-90% of e-commerce businesses fail within 18 months. Main causes: poor product-market fit (35%), cash flow issues (30%), marketing failures (20%).