Shopify grew revenue 30% in 2025 while its headcount fell about 6%. Revenue per employee is the metric that shows that shift, and AI is about to make it matter for every DTC brand. Here's the formula, what good looks like and the profit version we'd track next to it.
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Revenue per employee is your annual revenue divided by the number of full-time people it takes to earn it. It's an old metric that most DTC brands ignore, and it's about to become one of the most important numbers in ecommerce, because AI is changing how much revenue a small team can carry.
Shopify is the clearest example. Its 2025 annual report shows revenue of $11.56bn with about 7,600 employees at year end, against $8.88bn and about 8,100 employees a year earlier in its 2024 report. Revenue grew 30% while headcount fell about 6%, which lifts revenue per employee from roughly $1.10m to $1.52m in a single year.
Here's how to calculate revenue per employee for an ecommerce brand, what good looks like, the profit version we'd track alongside it, and how to raise it without burning out the team.
What is revenue per employee?
Shopify's own guide defines revenue per employee as the average amount of money each employee brings in for the business, and gives the formula as:
Revenue per employee = annual revenue ÷ number of full-time employees
A brand doing $10m a year with 20 full-time people has revenue per employee of $500,000. If it grows to $12m with the same 20 people, the figure rises to $600,000, and if it hires 6 more people to get there, it falls to about $462,000. The metric rewards growth that doesn't need proportional hiring, which is exactly the kind of growth AI makes possible.
How to count employees in an ecommerce business
- Use full-time equivalents. Two part-time customer service agents on 20 hours a week each count as one.
- Include regular freelancers. A designer billing 3 days a week every week is part of the team, whatever the contract says.
- Keep agencies separate. Track agency fees as their own line on the P&L rather than converting them to heads, or the number gets hard to compare over time.
- Use average headcount for the year, not the year-end figure, if you hired or cut heavily partway through.
What is a good revenue per employee?
There's no single benchmark, because the business model drives the number more than efficiency does. Shopify's guide quotes a US average of about $449,000 from CSI Market. The table below shows how far ecommerce businesses spread either side of that, using each company's latest annual report or, for the two DTC brands, the figures Shopify's guide credits to 2PM.
| Company | Model | Revenue | Employees | Revenue per employee |
|---|---|---|---|---|
| Shopify (FY2025) | Commerce platform | $11.56bn | ~7,600 | ~$1.52m |
| Etsy (FY2024) | Marketplace | $2.81bn | ~2,400 | ~$1.17m |
| Boll & Branch | DTC bedding | $80.8m | 116 | ~$697,000 |
| Chewy (FY2024) | Ecommerce with own fulfilment | $11.86bn | ~18,000 | ~$659,000 |
| Knix | DTC apparel | $70.5m | 127 | ~$555,000 |
| Amazon (FY2024) | Retail, logistics, cloud | $638bn | ~1,556,000 | ~$410,000 |
| Warby Parker (FY2024) | DTC with 276 stores | $771m | 3,780 | ~$204,000 |
The pattern is easy to read. Platforms and marketplaces like Etsy sit above $1m because sellers do the operational work. Businesses that run their own warehouses or stores, like Chewy, Amazon and Warby Parker, carry large fulfilment and retail teams that pull the number down. Warby Parker's annual report counts 1,562 part-time staff, many in stores, and its figure rises to about $348,000 on full-time staff alone.
For a DTC brand that outsources fulfilment, Knix and Boll & Branch are the fairer comparison: somewhere between $500,000 and $700,000. Compare yourself with brands that share your model, and with your own number last year, before anyone else's.
Why revenue per employee is about to matter more
In April 2025, Shopify CEO Tobi Lütke sent his team a memo, reported by BetaKit, that made reflexive AI use a baseline expectation. Before asking for more headcount, he wrote, "teams must demonstrate why they cannot get what they want done using AI". By the end of 2025, Shopify's revenue per employee had risen by about 38%.
DTC brands are heading the same way. Product uploads, weekly reporting, customer service triage and creative variations used to need a person each as a brand grew. Many of those jobs can now be run by one person with the right systems, which means two brands of the same size can have very different team costs, and very different profits. Revenue per employee is the simplest way to see which one you are.
The profit version: contribution margin per employee
Revenue per employee has the same flaw as revenue: a brand can push it up by discounting or overspending on ads. So we track a second number next to it, contribution margin per employee, which is the dollars left after product, shipping, fees and marketing, divided by the team.
Take an illustrative $10m brand with a 25% contribution margin and 20 full-time people. Revenue per employee is $500,000, but contribution margin per employee is $125,000, and that's the pot that has to pay each person's salary plus their share of software, rent and everything else. If the average fully loaded cost per person is $60,000, every head is covered about twice, which is healthy but leaves little room for a hire that doesn't add revenue.
It also gives you a simple hiring test. The revenue a hire needs to pay for themselves = their fully loaded cost ÷ your contribution margin ratio. At a 25% margin, a $60,000 hire needs to add or protect $240,000 of revenue a year, and that's before they earn you anything. The contribution margin formula and our margin improvement guide cover how to lift the ratio side of that equation.
How to raise revenue per employee without burning out the team
- Measure it quarterly. Use trailing 12-month revenue and average FTEs, and put revenue per employee and contribution margin per employee on the same page as your MER.
- Map where the hours go. Ask each person to list their recurring weekly tasks and the hours each takes. In most teams a surprising share of the week turns out to be repetitive work: reports, uploads, reconciliations and copy-paste between tools.
- Automate the repetitive jobs first. Start with the ones that sit on data, like the Monday profit report and the daily spend check. Our AI implementation plan costs the first jobs in hours, and the free AI Skills Library has ready-made versions.
- Replace a hire with a system before you replace a person. The easiest gain is the role you don't need to add next year. Apply Lütke's test to every new headcount request.
- Reinvest the time, not just the savings. The point isn't a smaller team for its own sake. It's the same team spending its hours on product, creative and customers instead of spreadsheets.
StoreHero gives you contribution margin in dollars, live across Shopify, ad spend, fees and COGS, so you can see what each order, channel and team actually earns. Book a demo to see your own numbers.
Key takeaways
- Revenue per employee = annual revenue ÷ full-time employees; count FTEs and regular freelancers, and keep agencies as a separate P&L line.
- Shopify's revenue per employee rose from about $1.10m to $1.52m in 2025 as revenue grew 30% and headcount fell about 6%.
- The business model drives the number: platforms sit above $1m, DTC brands that outsource fulfilment around $500,000 to $700,000, store-heavy retailers lower.
- Track contribution margin per employee alongside it, so discounting and overspending on ads can't flatter the figure.
- A hire pays for themselves at fully loaded cost ÷ contribution margin ratio: $240,000 of revenue for a $60,000 hire at a 25% margin.
Frequently asked questions
How do you calculate revenue per employee?
Divide your annual revenue by your number of full-time employees. Count part-time staff as full-time equivalents, include regular freelancers, and use the average headcount for the year if it changed a lot. A $10m brand with 20 FTEs has revenue per employee of $500,000.
What is a good revenue per employee ratio?
It depends on the business model. Shopify's guide cites a US average of about $449,000. DTC brands that outsource fulfilment, such as Knix and Boll & Branch, sit around $555,000 to $697,000, while businesses running their own stores or warehouses sit lower. Compare yourself with similar brands and with your own number last year.
Is $300K revenue per employee good?
For an ecommerce brand that outsources fulfilment, $300,000 is on the low side and usually means a lot of manual work or a team built ahead of revenue. For a brand with its own warehouse or stores it can be normal. Check contribution margin per employee too: that shows whether each person is covered.
Is $500K revenue per employee good?
For a DTC brand, $500,000 is in line with brands like Knix. Whether it's good depends on margin: at a 25% contribution margin it leaves $125,000 per person to cover their cost and the rest of the fixed costs.
Sources
- Shopify: Revenue per employee, formula and how to improve it
- Shopify 2025 annual report (Form 10-K)
- Shopify 2024 annual report (Form 10-K)
- BetaKit: Shopify CEO Tobi Lütke tells employees to prove AI can't do the job
- Etsy 2024 annual report (Form 10-K)
- Chewy fiscal 2024 annual report (Form 10-K)
- Amazon 2024 annual report (Form 10-K)
- Warby Parker 2024 annual report (Form 10-K)
