Overview

Every e-commerce brand owner eventually asks: “What are other brands seeing in their financials?” Understanding how your profit and loss (P&L) metrics stack up against industry benchmarks can illuminate what good looks like in today’s market. That’s exactly what the 2025 Ecom CFO P&L Benchmark Report delivers – a data-rich look at e-commerce financial performance across dozens of brands, compiled by Sam Hill, Founder and CEO of Ecom CFO. In a recent episode of MerchantSpring’s Marketplace Masters podcast (hosted by MerchantSpring co-founder Paul Sonneveld), Sam shared key findings from this report and broke down how top Amazon sellers and DTC brands are managing their finances.

Behind the Benchmark Report: Why It Matters

The 2025 Ecom CFO P&L Benchmark Report isn’t just another industry survey – it’s an inside look drawn from the actual books of over thirty private and public e-commerce companies ranging from $1M to $100M+ in revenue. Sam Hill and his team at Ecom CFO aggregated and normalised financial data (no easy feat) to make true apples-to-apples comparisons across businesses. The result is a 50+ page report full of specific benchmarks for key metrics – gross margin, contribution margin, EBITDA, and more – along with CFO commentary on how the landscape shifted in the past year.

Why does this benchmarking exercise matter? As Sam explained on the podcast, many founders operate in a vacuum, lacking visibility into how peers are performing. By sharing real data, the report helps answer “how do I compare?” definitively. It turns scattered anecdotal insights (often gleaned from forums or social media) into a systematic analysis that brands can use to battle-test their 2025 plans. In short, it shows what “good” performance looks like in the current e-commerce climate – invaluable for anyone planning budgets or growth strategies.

Importantly, the report segments data by company size (revenue cohorts of under $10M, $10-50M, and $50M+) to account for scale differences. It also pulls in some public company data for additional context, although private-company benchmarks are the main focus. This segmentation reveals a “tale of two e-commerces”: smaller brands struggled on average, while larger brands got even bigger. As we’ll see, many metrics – from revenue growth to profit margins – diverge sharply between the under-$10M sellers and their $50M+ counterparts. Understanding these contrasts is key to knowing where your brand stands.

Before we dive into each P&L line item, one quick note: accuracy in data is paramount. Sam emphasises that understanding the methodology behind numbers is crucial – whether you’re looking at a benchmarking report or your own MerchantSpring dashboard. Consistent definitions of metrics (e.g. what counts as Contribution Margin) ensure you’re comparing like with like. Ecom CFO invested heavily in cleaning and standardising the data for this report, so you can trust that these benchmarks are meaningful. With that, let’s explore the key findings.

Revenue Growth: Big Brands Soar, Smaller Brands Struggle

One of the headline findings is that revenue grew overall, but the growth was unevenly distributed across company sizes. In aggregate, e-commerce brands saw about +27% year-over-year revenue growth in the most recent period analysed. That sounds rosy – but it turns out much of the lift came from the largest players.

• Large Brands ($50M+): The cohort of companies exceeding $50M in annual revenue “tended to get much bigger,” posting outsized gains. Even the worst-performing brands in this $50M+ segment still saw significant growth in Q1 2025. In fact, the data shows they “smashed” their revenue numbers, with high double-digit increases common. This reflects a continuation of the “rich get richer” trend observed in 2024 – bigger brands have the resources to invest in growth and capture market share even in a tough environment.
  
  
• Mid-Sized Brands ($10M-$50M): The middle cohort was relatively flat by comparison. Year-on-year revenue was basically unchanged on average for the $10M-$50M group. Some grew, some declined, resulting in a lukewarm overall performance. As we’ll discuss, this segment often lacks the agility of small startups but doesn’t yet enjoy the efficiency of scale either – leading to more lackluster results.
  
  
• Small Brands (< $10M): Brands under eight figures in revenue saw only modest growth at best. The median small brand was up around 5% YoY in Q1 (essentially “up marginally”), and in many cases small sellers saw flat or declining revenue. In the full-year data, 25% of sub-$10M brands actually had revenue decreases. Half of companies under $50M experienced a 5–6% revenue decline at the 50th percentile in Q1 – indicating that many smaller ecom businesses are losing ground amid economic headwinds.
  
  

Yet, it’s not all doom and gloom for the little guys. Notably, at the 95th percentile, brands of every size achieved growth. In other words, the top 5% of performers in each cohort still found ways to expand sales despite the macro challenges. As Sam Hill put it, “the macro headwinds are there, but some companies are winning.” A nimble small brand can absolutely still thrive – it just requires smart strategy (for instance, finding a growth niche or optimising channels quickly). Sam observed that sub-$10M companies tend to be more nimble and able to pivot fast, which can be an advantage. However, limited resources constrain how much they can capitalise on opportunities compared to larger firms.

Why did scale make such a difference in growth? A key factor is the ability to invest. Larger brands often have stronger balance sheets and more cushion to weather storms and fund growth initiatives. They can launch new product lines, expand into wholesale or international markets, or spend on marketing, all while spreading fixed overhead over a bigger revenue base. Meanwhile, every small brand has a certain floor of fixed costs (staff, operations, software) needed to run the business. At $1-5M revenue, those baseline costs eat up a huge percentage of income; at $50M, the same absolute overhead is a drop in the bucket. Data from the report illustrates this clearly:

Fixed Cost Leverage: Large $50M+ brands had G&A (general & admin) expenses around just 6% of revenue, whereas mid-sized brands were in the high teens/low 20% range, and sub-$10M brands saw 30–40% of revenue consumed by G&A.

This math explains why big brands could continue growing – their cost structure leaves far more dollars to invest in growth, and they can outspend or outscale smaller competitors. As Sam noted, having more revenue “gives you more dollars to invest” after covering the basic operating expenses. In contrast, many mid-sized and small brands in 2024 were “just holding on,” focusing on optimizing ad spend and operations, without bandwidth for big new initiatives.

Channel Diversification Matters: Another insight tied to revenue is the rise of wholesale. About half of the companies in Ecom CFO’s sample now do some form of wholesale (selling through retail partnerships, brick-and-mortar stores, or B2B) in addition to DTC or marketplace channels. And across every cohort, wholesale revenue grew in Q1 2025 – by roughly 9% to 40% year-on-year, depending on the segment. For brands under $50M, wholesale was actually the fastest-growing revenue stream of all. This suggests that expanding into wholesale can be a smart move for mid-sized and smaller brands to drive incremental growth. (In fact, the only reason wholesale didn’t look even bigger for the $50M+ group is that one large brand in the sample saw explosive growth in another channel – meta advertising – slightly overshadowing its wholesale gains.) The takeaway: diversifying channels – adding wholesale, marketplaces, international markets, etc. – is a common trait among the best performers. MerchantSpring’s own data reinforces this, as successful agencies and brands often monitor an array of channels in one dashboard to spot new opportunities.

In summary, when it comes to top-line growth, scale and diversification are king. Big brands are pulling away by leveraging their scale advantages, but smaller brands can still win by being agile and expanding into new channels. Next, let’s look at whether all that revenue translated into healthy margins.

Gross Margin: Discipline at Scale (70% Is the Magic Number)

Gross margin – the percentage of revenue left after cost of goods and direct fulfillment costs – held surprisingly steady in the face of rising costs. Overall, gross margins were about even year-over-year on average. This means that despite inflationary pressures in the supply chain and logistics, e-commerce brands as a whole managed to maintain roughly the same product margins as before. But there were a couple of nuances by segment:

• Under $50M Brands: Gross margin ticked down slightly for smaller companies (a few percentage points decline), “which happens to correlate with growth in their wholesale revenue”. Wholesale tends to be lower-margin (since you sell at a discount to retail partners), so brands that grew wholesale saw a bit of margin dilution. In other words, the mix of revenue shifted – not necessarily a deterioration in unit economics. Sam notes this is “not cause for alarm” as long as the wholesale strategy is intentional. Aside from mix effects, small and mid-sized brands did not see major margin erosion in Q1, which is a positive sign.
  
  
• $50M+ Brands: Larger brands actually improved gross margin slightly (by ~+7% in the full-year comparison). Many 8- and 9-figure players are extremely disciplined about product margin – and it shows. In fact, very few companies at $100M scale have below 70% gross margins; ~70%+ appears to be a defining trait of brands that reach that size. Put differently, if you aspire to join the elite club of $50M+ sellers, your product economics likely need to be dialled in at a high level. High gross margin (through strong pricing power, cost control, or product differentiation) provides the fuel for marketing, R&D, and growth. Top performers understand this. One can assume they rigorously manage COGS, negotiate favourable supplier terms, and avoid the race-to-the-bottom pricing that plagues many smaller sellers.
  
  

It’s also noteworthy that among the smallest cohort, the spread between the best and worst performers’ gross margins is huge – over a 30 percentage point difference between the 5th and 95th percentile in the under-$10M group. This implies some sub-$10M brands have exceptionally high margins (perhaps premium niche products), while others are scraping by with thin margins. If you’re a smaller ecom business, achieving a gross margin at the higher end of that range could be what propels you into the next revenue tier. MerchantSpring’s experts often advise brands to analyse SKU-level profitability (something the MerchantSpring platform’s Accounting module makes easy by identifying loss-making products) and prune or adjust pricing where needed. Gross margin is the first line of defense in the P&L – if it’s strong, you have room for error elsewhere; if it’s weak, even perfect marketing and operations might not save your profitability.

The bottom line on gross margin: stability is the new gain. Holding margins steady in a volatile cost environment is itself a win. The best brands entered 2025 with gross margins intact – ~70% for the big players, and many smaller ones hovering around the 50–60% range (with 30% as a lower bound to avoid). Keeping an eagle eye on product costs, landed costs, and pricing strategy remains crucial. As costs rise, founders must be vigilant (renegotiating suppliers, optimising logistics, possibly raising prices where justified) to protect this cornerstone metric. After all, gross margin feeds directly into what we discuss next: contribution margin and how much is left after marketing.

Contribution Margin: The Real Benchmark for Profitability

If gross margin is the fuel, Contribution Margin (CM) is the engine efficiency – it tells you how much profit is left after all variable costs, including not just COGS but also direct marketing (ad spend), marketplace fees, and fulfillment per order. Ecom CFO considers contribution margin “probably the most important and also most misunderstood” metric in e-commerce finance. In simplest terms, contribution margin is the cash you keep after all variable selling costs – product, shipping, pick & pack, transaction fees, advertising, etc. It’s essentially gross margin minus your direct marketing and distribution costs.

Why is this metric so critical? Because it reflects the economics of acquiring and fulfilling orders. You might have high gross margins on a product, but if your Facebook ad spend or Amazon fees eat up 40% of sales, your contribution margin will suffer. Healthy CM means you’re generating enough gross profit and marketing efficiency to cover fixed overhead and still eventually produce net profit. Unhealthy CM means you’re burning cash with every sale, even before overhead.

The 2025 benchmark report revealed a somewhat surprising trend: Contribution margins went up for many brands, even if their revenue went down. This indicates a lot of e-commerce operators pulled back on ad spend or found efficiencies in Q1 2025. Indeed, Sam notes that he and his team were “surprised to see contribution margin up” across numerous companies despite top-line challenges. In fact, among the $10M-$50M cohort, average CM % increased year-over-year, even though gross margin was flat and ROAS (return on ad spend) was down. How is that possible? A few plausible reasons were offered in the report: a shift in channel mix (more organic or wholesale sales which have lower variable costs), improved logistics or fulfillment efficiency, or investment in non-performance marketing that started paying off. Essentially, some brands managed to squeeze more profit out of each dollar of revenue through cost discipline and smarter marketing allocation.

For the smallest brands, contribution margin did dip a bit (which “makes sense when…gross margin and ROAS were also down” in that group). Small sellers likely had to spend more on ads to chase growth and may have faced rising cost of goods, so their contribution margins took a hit. But even so, many were able to maintain CM in a decent range.

So, what does “good” look like in contribution margin? Sam Hill’s advice – repeated “again and again” – is that brands should target a baseline contribution margin of at least 30%. That 30% CM is a rule-of-thumb threshold for a healthy e-commerce business. If you’re consistently below 30% CM, you’re going to struggle to cover your fixed expenses and turn a profit. The report data supports this benchmark: while results vary by model (exceptions might be high-volume resellers or dropshippers with low overhead), the successful brands in the sample generally cleared that 30% hurdle. In fact, it’s likely that top performers – especially in the mid and large cohorts – enjoy substantially higher CM (40%+), giving them a cushion to invest and still be profitable.

To improve contribution margin, consider both sides of the equation: increase gross margin (discussed above) or reduce variable costs. Many brands in 2024/25 adjusted their marketing mix, cutting back on underperforming ad spend. We even heard anecdotes (in the full report) of a brand that cut ad spend to $0 for a period yet still grew revenue via organic channels – dramatically boosting contribution margin. Using tools like MerchantSpring’s platform to monitor advertising performance and ACoS across marketplaces can help identify where spend is inefficient. On the fulfillment side, optimising shipping (e.g., consolidating shipments, renegotiating 3PL rates) can shave a point or two off variable costs. As Sam emphasised, the key is defining contribution margin consistently for your business and tracking it religiously. Month in, month out, know your CM% – it’s one of the clearest indicators of your business’s health.

EBITDA and Bottom-Line Profit: A Mixed Bag

At the end of the day, every brand owner wants to drive EBITDA (earnings before interest, taxes, depreciation, amortisation) – essentially operating profit. This is where the “rubber meets the road” on whether your revenue growth and margin management actually yield a profit. According to the Ecom CFO benchmarks, EBITDA outcomes varied widely in the past year. Only about half of the sampled companies managed to increase their EBITDA percentage in Q1 2025. This isn’t too shocking – Q1 is historically a tough quarter for e-commerce (coming off holiday returns, winter doldrums, etc.), and if revenue was down for many, profit often suffers.

The averages hide the real story, however. Sam points out that while many brands saw declining or negative profits, some companies grew EBITDA significantly despite the headwinds. In fact, two brands in the sample achieved over +200% year-over-year growth in EBITDA for Q1. One was a 7-figure brand that swung from a -$70k loss to +$70k in EBITDA (finally breaking into profitability), and another was an 8-figure brand that jumped from around $130k to over $400k in EBITDA. These kinds of leaps underscore the report’s biggest takeaway: “great companies are finding ways to grow.” Even in a margin-squeezed, cost-inflationary environment, the best operators find efficiencies and make the right moves to improve the bottom line.

On the flip side, plenty of brands saw their EBITDA drop or swing negative. The full-year data showed a “dramatic” fall in EBITDA for smaller brands (under $10M), primarily due to fixed costs growing too high. This aligns with what we’ve heard anecdotally: during 2024, many e-commerce businesses increased their fixed overhead (hiring, tools, inventory, etc.), expecting revenue to keep rising, but when growth fell short, profits were hammered. Sam described this as a common story: Founders were optimistic (as founders always are) and added fixed costs, hoping for a booming Q4 or a strong 2025, which didn’t fully materialise. Now those companies are facing tough choices. “I have too much fixed cost and I’ve got to do something about it” is a refrain he’s hearing often. Unfortunately, that usually means cutting expenses – sometimes even layoffs – to right-size the ship.

Key insight: Fixed costs became a drag on profitability. As noted earlier, many small/mid brands have high fixed-cost ratios, so if revenue disappoints, EBITDA plunges. In the report’s full-year comparison, EBITDA for under-$10M firms was down an average of -93% (!) year-over-year in 2024 – essentially wiping out profits – whereas the $50M+ cohort increased EBITDA by ~61% on average. This stark divide came largely from cost structure differences and proactive cost management by larger firms.

So, what does “good” EBITDA look like? It varies by model and growth stage, but clearly the ability to maintain solid profitability (or sustainable losses, for early growth brands) is what separates great companies. For a mature brand, a healthy EBITDA margin might be in the teens or higher. Many of the best 8-figure brands target an EBITDA margin around 15-20%+ in today’s market, while aggressively growing brands might accept lower short-term margins for growth. The report’s examples of turning a -$70k loss into +$70k profit illustrate that the improvement trajectory is a key marker of success – good brands are quickly closing the profitability gap. If you’re not profitable yet, you should see your losses shrinking and a clear path to positive EBITDA; if you are profitable, you should aim to widen that gap by controlling costs.

One encouraging note: some brands proved that cutting costs and improving profitability doesn’t have to come at the expense of growth. Those +200% EBITDA gains mentioned above? They occurred even as the companies continued to grow revenue, showing it’s possible to do both. The best operators are trimming fat and growing the top line simultaneously.

From MerchantSpring’s perspective, having real-time visibility into P&L drivers is crucial for this. A tool like MerchantSpring Marketplace Manager lets you see your sales, advertising spend, and fees across all channels in one place – so you can quickly spot if, say, your ad-to-sales ratio is creeping up or your inventory holding costs are ballooning. This ties into our final section: actionable strategies to emulate the “good” in these benchmarks.

Strategic Recommendations: How to Achieve “What Good Looks Like”

Data is only as useful as the actions it informs. The 2025 Ecom CFO report and the Marketplace Masters discussion highlighted several strategic recommendations for brands looking to improve their financial performance. Here are the top takeaways for your 2025 game plan:

1. Protect Your Margins – Everyone’s Coming for Them: In e-commerce, Jeff Bezos’s famous quote, “Your margin is my opportunity”, still holds true. Rising costs in product sourcing, shipping, ads, and more are putting pressure on margins from all sides. Founders must be proactive about defending their margins in 2025. That means scrutinising COGS for any savings, optimising fulfilment, and not overspending on customer acquisition. If you’re seeing gross or contribution margins slip, address it immediately – raise prices selectively, bundle products, improve ROAS, etc. Don’t assume you can “make it up on volume.” Great companies in the report maintained or even expanded margins through disciplined management.
   
   
2. Hope Is Not a Strategy – Act on Data, Fast: Many brands went into 2024 with rosy expectations: they ramped up inventory and fixed costs hoping for big revenue growth. When growth lagged, they hesitated, “hoping Q4 would save them.” The report is clear that too much hope (and delay) kept companies from cutting underperforming SKUs and bloated expenses in time. Don’t repeat this mistake in 2025. If your data (e.g. monthly P&L reviews in MerchantSpring or your accounting software) shows that certain product lines or campaigns aren’t working, take action now. Likewise, if sales targets aren’t being met by mid-year, adjust your cost base quickly. It’s painful to scale back, but survival and “living to fight another day” may depend on it. As Sam bluntly puts it, you can’t pay your team with hope – you need real margins and cash flow.
   
   
3. Invest in a Realistic Budget and Plan: The most universal advice from Ecom CFO is to have a clear, realistic budget for the year. This seems obvious, but many entrepreneurs either don’t budget or treat it as a formality. A proper budget forces you to set targets (for revenue, spend, margin) and then hold yourself and your team accountable. It should be based on a combination of your past performance and external benchmarks – exactly where this report helps. For example, if you’re planning for 50% growth but the top quartile in your segment is growing 30%, you may be over-optimistic. Ground your plans in reality. MerchantSpring’s CEO, Paul Sonneveld, echoed the importance of planning on the podcast: understanding your P&L deeply can mean the difference between short-term survival and long-term scale. In practice, build a 2025 budget that considers three things: your historical trends, the peer benchmarks (like those we’ve discussed), and even lessons from large public companies (whose annual reports can offer insight into industry shifts). Once the budget is set, track against it monthly (using tools to consolidate multi-channel data if needed) and adjust course when you deviate.
   
   
4. Leverage Tools and Expertise: The complexity of e-commerce – multiple channels, each with its own fees and reports – means you should lean on technology and expert help. On the tech side, consider a platform like MerchantSpring to centralise your marketplace analytics. It can give you instant access to profit-and-loss dashboards, highlight loss-making SKUs, and automate reporting so you’re never in the dark on financial KPIs. On the human side, don’t be afraid to seek a CFO or financial advisor (even fractional) who knows e-commerce. As the report notes, a good CFO can help incorporate your personal goals into the business plan and find alignment between founder's objectives and financial realities. The combination of smart software and seasoned insight is a force multiplier for achieving “good” financial outcomes.

Finally, a mindset takeaway: Great companies play both offense and defense. They find ways to grow (offense) – e.g. launching new products, entering wholesale, improving conversion – and they constantly guard profitability (defense) – e.g. cutting unnecessary costs, optimising ads, and improving operations. The 2025 benchmarks showed it’s possible to do both even in challenging times. Strive to emulate that balance. Grow, but grow profitably.

Conclusion: Benchmarking “Good” to Become Great

The 2025 Ecom CFO P&L Benchmark Report gives us a clear snapshot of what top e-commerce brands are achieving by the numbers. In an industry often shrouded in secrecy, this data – combined with real-world commentary from experts like Sam Hill – is a goldmine for operators. To recap, what does good look like? It looks like double-digit revenue growth (even when the market is soft) driven by channel expansion. It looks like 70%+ gross margins at scale and 30%+ contribution margins as a baseline for all. It looks like keeping fixed costs in check so that EBITDA can grow, and making the tough calls quickly when the numbers tell you something’s off. And it looks like being data-driven every week, not just every quarter – whether that’s through regularly reviewing a benchmarking report or watching your dashboard in MerchantSpring each morning.

By focusing on these fundamentals, even smaller brands can chart a path to join the ranks of the best. As we saw, the 95th percentile performers in every segment found ways to win. There’s no reason your brand can’t be among them, regardless of size, if you apply the lessons from those who are already great.

For a deeper dive into these insights, you can listen to the full conversation with Sam Hill on MerchantSpring’s Marketplace Masters podcast (it’s an episode packed with practical tips and deeper analysis of the report’s tables). Also, consider checking out Ecom CFO’s full report for more granular data and case studies – it’s an eye-opening read for any e-com operator serious about financial success.

If you’re ready to benchmark your own marketplace performance or understand how your margins stack up across Amazon, Walmart, and beyond – MerchantSpring can help.
👉 Book a demo to see how our multi-channel analytics platform can surface opportunities across your portfolio.
👉 Or, visit our Watch On Demand to dive deeper into expert strategies from Marketplace Masters and beyond.

Because in today’s market, staying profitable isn’t about working harder – it’s about working smarter, with the right tools and data at your side.