Guide
E-commerce business plan for Saudi Arabia
Online stores look asset-light until you count acquisition, delivery, returns and the cash sitting in inventory. The plan has to model contribution per order, not revenue.
An e-commerce plan works when contribution per order is positive after delivery, payment fees, returns and customer acquisition — and when the cash tied up in inventory does not exceed the funding available.
Unit economics per order
| Line | Value |
|---|---|
| Average order value | |
| Product cost | |
| Packaging | |
| Delivery cost to customer | |
| Delivery subsidy absorbed | |
| Payment processing fee | |
| Expected returns cost | |
| Contribution before marketing | |
| Customer acquisition cost | |
| Contribution after acquisition |
If the last line is negative, growth increases the loss. That is the single most important test in the plan.
Delivery and returns
Delivery in Saudi Arabia is competitive but not free. The plan should state:
- delivery cost per order and who pays it;
- coverage and lead times;
- cash-on-delivery handling, if offered;
- return rate and who bears the return cost;
- packaging and re-shipping costs.
Returns are not a customer-service detail; they are a unit-economics line.
Acquisition
| Channel | Cost basis | Notes |
|---|---|---|
| Paid social | Cost per acquisition | Scales, but rises with competition |
| Search | Cost per click and conversion | Intent-driven, limited volume |
| Influencer | Fixed fee or commission | Variable quality, hard to attribute |
| Marketplace | Commission | Volume with margin pressure |
| Repeat and referral | Low | Requires a product that earns it |
A plan that assumes a blended acquisition cost without channel detail is guessing. Show the mix and the assumed cost per channel.
Inventory and cash
Cash is consumed before revenue arrives:
- supplier deposits and minimum order quantities;
- shipping and customs clearance;
- stock sitting in a warehouse;
- marketplace payment cycles;
- returns processing.
The cash flow forecast should show inventory purchases, sell-through and collection separately. A store can be profitable on paper and insolvent in month four.
What the plan should contain
- Product range and positioning.
- Customer segments and acquisition channels.
- Pricing and promotional policy.
- Unit economics per order.
- Fulfilment model: in-house, third-party or dropship.
- Inventory plan and reorder logic.
- Returns policy and cost.
- Three-year projections with monthly cash.
- Downside case at higher acquisition cost.
- Risks: stock obsolescence, platform dependence, delivery failure.
Consumer protection, e-commerce registration, VAT and customs requirements should be confirmed with the relevant Saudi authority. This page does not state specific regulatory thresholds.
Common failures
- modelling revenue without delivery cost;
- ignoring returns;
- assuming paid acquisition costs stay flat as spend scales;
- over-ordering opening stock;
- launching with no repeat-purchase mechanism.
See financial modelling for the model, or business plan writing for the full document.
The three assumptions that decide viability
| Assumption | Why it decides the outcome | How to test it |
|---|---|---|
| Repeat purchase rate | Acquisition cost is only recoverable if customers return | Cohort of first 100 customers after 90 days |
| Return rate | Returns erase contribution quietly | Category benchmark, then actual data |
| Delivery cost per order | Often the largest variable cost after product | Quotes from two carriers at your expected volume |
A store with strong first-order growth and no repeat purchase is buying revenue rather than building a business. The plan should show the cohort logic even if the data is early.
What to prepare before commissioning a plan
- supplier price lists at your expected volumes;
- delivery quotes for your typical parcel size and weight;
- payment processing rates;
- packaging costs;
- the returns policy you intend to offer;
- a target acquisition cost from a small test campaign.
With those five inputs, the unit economics can be modelled before any capital is committed. Without them, the plan is a revenue projection with a cost guess attached.