Scaling E-Commerce Profitably: Insights from Thomas Gleeson
E-commerce is exciting, but let’s be honest, it’s not getting any easier. Rising costs, fierce competition, and tricky analytics make scaling profitably a challenge. Thomas Gleeson, co-founder of StoreHero, knows this game inside out. With years of experience in family businesses, Shopify, and now StoreHero, he’s got some hard-earned wisdom to share. Here’s how you can build a thriving e-commerce business without burning through cash.
From Family Business to StoreHero: Thomas’ Journey
Thomas didn’t just stumble into e-commerce; he grew up in it. His first taste of the industry came from working in his mother’s online store, Wowee.ie. He tackled everything from SEO to website troubleshooting before launching his own businesses, a personalised book company and a home goods store.
Later, at Shopify, he worked with businesses of all sizes, helping those with revenues between $25M and $200M fine-tune their strategies. That experience led him to co-found StoreHero, a platform designed to help e-commerce brands track profitability in real-time.
Why E-Commerce Growth Is Tougher Than Ever
E-commerce isn’t what it used to be. Yes, platforms like Shopify make it easy to launch a store, but scaling profitably? That’s a different story. Thomas highlights the biggest challenges in scaling an e-commerce business profitably:
- Soaring Customer Acquisition Costs
- Ads on Meta and Google have doubled or even tripled in price for many brands.
- The post-pandemic boom flooded the market with new competitors, driving costs up further.
- The Pressure to Scale Fast
- High costs push brands to grow quickly, often at the expense of profitability.
- Relying on Misleading Metrics
- Many brands lean too much on ROAS (return on ad spend), not realising that it often overstates results due to attribution gaps.
4 Pillars of a Profitable E-Commerce Business
According to Thomas, a strong e-commerce business isn’t just about revenue—it’s about profitability. Here’s where you should focus to improve e-commerce margins:
- Healthy Gross Margins
- After accounting for shipping, fulfilment, and returns, aim for at least a 60% margin.
- Lower margins make it hard to survive rising ad costs.
- Repeat Purchases
- Selling products that people buy regularly (like pet food, beauty products, or supplements) helps keep customer acquisition costs sustainable.
- Lean Operations
- Keep operating costs (staff, rent, software) below 12% of revenue.
- Efficient operations free up resources for growth.
- Strong Branding
- A great brand lets you charge higher prices and reduces reliance on discounts.
- Example: A Finnish shoe brand raised prices by 30% with minimal drop in conversions, thanks to strong brand loyalty.
Discounting: A Necessary Evil?
Discounts can drive sales, but overuse can backfire. Thomas suggests:
Avoid Training Customers to Wait for Sales
- Frequent discounts erode margins and make people hesitant to buy at full price.
Use Discounts Strategically
- Reserve them for clearing stock, launching new products, or rewarding loyal customers.
- Always factor discounts into your pricing model so they don’t hurt your bottom line.
How StoreHero Helps E-Commerce Brands Stay Profitable
Tracking true profitability is tough when data is scattered across platforms. StoreHero simplifies this by pulling data from Shopify, Google Ads, email marketing, and more. Key features include:
- Real-Time Profitability Tracking
- It accounts for all costs, shipping, fulfilment, transaction fees, giving a clearer picture of what’s actually making money.
- Actionable Insights
- StoreHero analyses trends, helping brands understand whether increased ad spend is leading to real profit or just more sales.
- AI-Driven Summaries
- Weekly reports highlight what’s working, what’s not, and where to focus next.
Thomas’ Advice for Long-Term E-Commerce Success
- Start with Profit Goals
- Define your target profit margin first, then work backwards to set revenue and cost targets.
- Example: Want a 10% profit margin? Calculate the sales and expenses needed to hit that goal.
- Look Beyond Revenue
- Focus on contribution margin, customer lifetime value (LTV), and gross profit per purchase.
- Don’t get fixated on top-line sales, it’s profit that keeps you in business.
- Invest in Analytics
- Use tools like StoreHero to gain clarity on financial performance and make data-driven decisions.
Where to Learn More
- StoreHero Platform – Check out storehero.ai to see how it can help your business.
- Q4 eBook – Download StoreHero’s free guide to optimising e-commerce for the holiday season.
- Follow Thomas – Connect with him on LinkedIn or listen to the StoreHero Podcast on Spotify and YouTube.
Free Webinar: Measure and Improve Your Marketing Performance
Want to know if your marketing is actually making you money? Join my webinar, where I’ll break down how to track e-commerce profitability and improve your marketing performance using data-driven insights.
FREE Webinar 19th March 2025:
Save Your Spot – Finding the Gold in Your Google Analytics
Final Thoughts
Scaling an e-commerce business isn’t just about selling more—it’s about scaling e-commerce profitably. With the right approach, strong margins, and the right tools, you can navigate the challenges of rising costs and competition. Whether it’s refining your analytics, strengthening your brand, or making smarter financial decisions, following Thomas’ insights can help set you up for long-term success.
Now, over to you—what’s your biggest challenge when it comes to e-commerce profitability?
