Ecom is the worst business model out there if you actually want to make money al
By Jon Derkits · October 22, 2026 · Curated by George's Blog
Ecom is the worst business model out there if you actually want to make money along the way...
...And this video explains why.
TL;DV:
1) Margins have collapsed.
On $100 of revenue, total cost to sell rose from $63.16 to $98.29 (+55.6%). Contribution margin dropped from $36.84 to just $1.71 (−95.4%). There's almost nothing left after costs.
2) Every major cost line has gotten more expensive since 2019.
Landed COGS +50% (driven by Chinese labor, tariffs, freight, and materials), paid advertising +81%, outbound/FBA delivery +63%, and platform fees +15%. Attention is especially pricey: Meta CPMs and Google CPCs are roughly +120–130%.
3) Ad efficiency has also fallen.
Meta sales campaign ROAS is down ~29% and retargeting is down ~63%. Google median ROAS is down ~27% (Shopping/Retail even more). Higher spend + lower returns = much worse unit economics.
4) Outside capital and consumer purchasing power are tighter.
Typical early-stage funding rounds are down ~65% (example: $8M → $2.8M). Meanwhile CPI is up 31%, real disposable income only +13%, and real median weekly earnings +5.6% -- so the average household has less discretionary room.