E-Commerce Case Interview: Complete Guide (2026)

Author: Taylor Warfield, Former Bain Manager and Interviewer


E-commerce case interview


E-commerce case interviews are becoming increasingly common in consulting interviews. These cases test your ability to analyze digital business models, understand online customer behavior, and solve problems unique to companies selling products or services online.

 

The challenge is that e-commerce has its own vocabulary, metrics, and business dynamics that differ from brick-and-mortar retail or other industries.

 

This guide will teach you everything you need to ace your e-commerce case interview.

 

But first, a quick heads up:

 

Learning case interviews on your own can take months.

 

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Understanding E-Commerce Business Models

 

Before you walk into your case interview, you need to understand the major types of e-commerce business models. Your case could involve any of these.

 

Direct-to-Consumer (DTC)

 

DTC brands sell products directly to customers through their own websites. Think Warby Parker, Casper, or Dollar Shave Club.

 

These companies control the entire customer experience from marketing to shipping. They typically have higher profit margins than wholesale models but need to invest heavily in customer acquisition.

 

Marketplace Platforms

 

Marketplaces connect buyers and sellers. Amazon, eBay, and Etsy are classic examples.

 

These platforms make money through transaction fees, listing fees, or subscription models. They don't hold inventory, which means lower costs but also less control over product quality and customer experience.

 

Subscription E-Commerce

 

Subscription models charge customers recurring fees for products or services. Examples include Netflix, Spotify, and meal kit services like HelloFresh.

 

The key advantage is predictable revenue. The challenge is preventing customer churn and maintaining lifetime value above acquisition costs.

 

B2B E-Commerce

 

Business-to-business e-commerce involves companies selling to other companies online. Alibaba and Amazon Business operate in this space.

 

These transactions are typically larger but less frequent than consumer purchases. The sales cycle is longer and relationships matter more.

 

Omnichannel Retail

 

Many traditional retailers now sell both online and in physical stores. Target, Walmart, and Best Buy use this model.

 

These companies need to manage inventory across channels, fulfill online orders from stores, and create seamless customer experiences whether people shop online or offline.

 

Essential E-Commerce Industry Knowledge

 

To excel in e-commerce case interviews, you need basic industry knowledge. You don't need to be an expert, but you should understand key trends and challenges.

 

1. The Shift to Mobile

 

Over 70% of e-commerce traffic now comes from mobile devices. Companies need mobile-optimized sites and apps to compete.

 

This creates challenges around smaller screen sizes, slower load times, and different user behaviors compared to desktop shopping.

 

2. The Importance of Logistics

 

Fast, reliable shipping is now table stakes. Amazon Prime has trained customers to expect two-day delivery or faster.

 

Fulfillment costs can make or break e-commerce profitability. Smart companies optimize packaging, warehouse locations, and carrier relationships.

 

3. Rising Customer Acquisition Costs

 

Paid advertising on Facebook, Google, and Instagram has become more expensive as competition increases. CAC has risen 60% over the past five years for many DTC brands.

 

This makes email marketing, SEO, and customer retention increasingly important for profitability.

 

4. The Power of Data

 

E-commerce companies can track everything: which products people view, how long they spend on each page, what they add to cart, when they abandon purchases.

 

This data enables personalization, better recommendations, and smarter marketing decisions.

 

5. Payment Flexibility

 

Buy now, pay later services like Affirm and Klarna have changed online shopping. Offering multiple payment options can increase conversion rates and AOV.

 

6. Returns and Fraud

 

Returns cost e-commerce companies billions annually. Companies need smart return policies that balance customer satisfaction with profitability.

 

Fraud prevention is also critical. Chargebacks and stolen credit card transactions can significantly hurt margins.

 

Key E-Commerce Metrics You Should Know

 

E-commerce case interviews will test your understanding of industry-specific metrics. You need to know what these mean and how to calculate them.

 

1. Conversion Rate

 

This measures the percentage of website visitors who make a purchase.

 

Conversion Rate = (Number of Purchases / Total Visitors) x 100

 

If 10,000 people visit a site and 200 make purchases, the conversion rate is 2%.

 

2. Average Order Value (AOV)

 

AOV tracks the average amount customers spend per transaction.

 

AOV = Total Revenue / Number of Orders

 

If a company generates $100,000 from 2,000 orders, the AOV is $50.

 

3. Customer Acquisition Cost (CAC)

 

CAC measures how much you spend to acquire one new customer.

 

CAC = Total Marketing Spend / Number of New Customers Acquired

 

If you spend $50,000 on marketing and acquire 1,000 customers, your CAC is $50.

 

4. Customer Lifetime Value (LTV or CLV)

 

LTV estimates the total profit a customer will generate over their entire relationship with your company.

 

A simple version: LTV = AOV x Purchase Frequency x Customer Lifespan

 

If customers spend $50 per order, order twice per year, and stay for 3 years, their LTV is $300.

 

5. Cart Abandonment Rate

 

This shows the percentage of shoppers who add items to their cart but leave without buying.

 

Cart Abandonment Rate = 1 - (Completed Purchases / Shopping Carts Created)

 

The average cart abandonment rate is around 70%.

 

6. Return Rate

 

Return rate measures what percentage of products get sent back.

 

Return Rate = (Number of Returns / Total Orders) x 100

 

High return rates hurt profitability, especially for low-margin products.

 

7. Monthly Active Users (MAU) and Daily Active Users (DAU)

 

These metrics track how many unique users visit or engage with a platform each month or day. They're particularly important for marketplace and subscription businesses.

Common Types of E-Commerce Case Interview Questions

 

Here are the types of questions you might encounter in an e-commerce case interview:

 

Profitability and Growth

 

  • How can an online furniture retailer increase profitability?
  • Should a fashion e-commerce company expand into new product categories?
  • What's causing declining profit margins for a marketplace platform?

 

Customer Acquisition and Retention

 

  • How should a DTC brand reduce customer acquisition costs?
  • What can a subscription service do to decrease churn?
  • Should an online retailer invest more in email marketing or paid social ads?

 

Pricing and Revenue

 

  • How should a marketplace price its seller fees?
  • What's the optimal pricing strategy for a new product launch?
  • Should an e-commerce company offer free shipping?

 

Operations and Fulfillment

 

  • Should an online retailer build its own fulfillment centers or use third-party logistics?
  • How can a company reduce shipping costs without hurting customer satisfaction?
  • What's the best inventory management strategy for an omnichannel retailer?

 

Market Entry and Expansion

 

  • Should a US-based e-commerce company expand internationally?
  • How should a DTC brand enter brick-and-mortar retail?
  • What's the business case for launching a mobile app?

 

E-Commerce Case Interview Strategies

 

Here are specific strategies for handling e-commerce case interviews.

 

1. Start with the Business Model

 

Always clarify what type of e-commerce model you're dealing with. A marketplace has completely different economics than a DTC brand.

 

Ask questions about revenue streams, who holds inventory, and how products get to customers.

 

2. Focus on Unit Economics

 

E-commerce profitability comes down to unit economics. You need to understand:

 

  • How much does it cost to acquire one customer?
  • How much profit do you make per order?
  • How many times will that customer order?

 

If LTV doesn't significantly exceed CAC, the business has a problem.

 

3. Consider the Full Customer Journey

 

Map out how customers move from awareness to purchase to repeat orders. Where are the drop-off points?

 

Common issues include:

 

  • High traffic but low conversion (website or pricing problem)
  • High conversion but low repeat rate (product quality or experience issue)
  • High CAC (inefficient marketing or competitive market)

 

4. Think About Logistics

 

Shipping and fulfillment often make or break e-commerce businesses. Consider:

 

  • Where is inventory stored?
  • How fast can orders ship?
  • Who handles packaging and shipping?
  • What do returns cost?

 

These operational details directly impact profitability.

 

5. Know When to Dig into Data

 

E-commerce generates tons of data. If you get numbers, use them strategically.

 

Calculate key metrics like conversion rate, AOV, and LTV. Look for trends over time. Compare performance across customer segments or geographic markets.

 

6. Don't Forget the Competition

 

E-commerce markets are often winner-take-most. Network effects and scale advantages matter.

 

Consider what competitors are doing with pricing, shipping, product selection, and customer experience.

 

E-Commerce Case Interview Example

 

Let’s walk you through a complete e-commerce case interview so you can see how to apply all of these e-commerce case interview concepts and strategies.

 

Case Prompt

 

Our client is FreshCart, an online grocery delivery service operating in major US cities. They've seen strong growth over the past year but profitability has declined. The CEO wants to understand why profits are falling and what to do about it.

 

Step 1: Understand the Background and Ask Questions

 

First, confirm your understanding:

 

"Just to make sure I understand correctly, FreshCart is an online grocery delivery service. They're experiencing revenue growth but declining profitability, and we need to figure out why and recommend solutions."

 

Then ask clarifying questions:

 

  • How much have profits declined? (Answer: Operating margin dropped from 8% to 3%)

 

  • What's driving the revenue growth? (Answer: Both new customer acquisition and existing customers ordering more frequently)

 

  • Has anything changed in the business recently? (Answer: They expanded to 5 new cities six months ago)

 

  • Who are the main competitors? (Answer: Instacart, Amazon Fresh, and traditional grocery stores)

 

Step 2: Structure Your Framework

 

You might structure your framework around these areas:

 

Revenue Analysis 

 

  • Customer acquisition and retention
  • Order frequency and average order value
  • Pricing changes

 

Cost Structure 

 

  • Customer acquisition costs
  • Fulfillment and delivery costs
  • Technology and overhead

 

Competitive Dynamics

 

  • Competitor pricing and promotions
  • Market share changes

 

Operational Factors 

 

  • New city expansion performance
  • Supply chain efficiency

 

Step 3: Work Through the Case

 

The interviewer might share that delivery costs have increased by 40% in the new markets. 

You'd investigate why:

 

  • Are the new cities more spread out geographically?
  • Is order density lower in new markets?
  • Are drivers less efficient in unfamiliar areas?
  • Have gas prices increased?

 

You might discover that the new cities have lower population density, meaning drivers cover more miles per delivery. Additionally, customer acquisition costs are 2x higher in new markets because FreshCart has less brand awareness.

 

Step 4: Develop Your Recommendation

 

Based on this analysis, you might recommend:

 

"FreshCart should focus on improving profitability in new markets before additional expansion. Specifically:

 

First, increase order density in new cities through targeted marketing in high-density neighborhoods rather than blanket advertising. This will reduce both CAC and delivery costs per order.

 

Second, implement minimum order values of $35 in new markets to ensure orders are profitable enough to cover higher delivery costs.

 

Third, pause new city launches for six months while optimizing existing markets. The company should only expand once new market economics match mature market profitability."

 

Additional E-Commerce Case Interview Examples

 

Here are three additional e-commerce case scenarios to practice with.

 

Example 1: DTC Furniture Company

 

Case prompt: Comfort Living sells furniture directly to consumers online. They want to increase profits by 30% next year. How should they do it?

 

Key areas to explore:

 

  • Can they increase prices without losing customers?
  • How can they reduce CAC or improve conversion rates?
  • Are there opportunities to upsell or increase AOV?
  • Can they reduce shipping costs (furniture is expensive to ship)?
  • Should they reduce product returns?

 

Example 2: Fashion Marketplace

 

Case prompt: StyleHub is a marketplace connecting independent fashion designers with consumers. Seller complaints about high fees are increasing. Should StyleHub reduce its commission rate?

 

Consider:

 

  • What's StyleHub's current take rate and how does it compare to competitors?
  • How price-sensitive are sellers?
  • Would lower fees attract more sellers and increase overall revenue?
  • Could StyleHub add value-added services instead of cutting fees?
  • What's the impact on profitability and growth targets?

 

Example 3: Subscription Box Service

 

Case prompt: SnackCrate delivers international snacks to subscribers monthly. They're experiencing 15% monthly churn. What should they do?

 

Investigate:

 

  • Why are customers canceling? (survey data, customer service feedback)
  • How does churn vary by customer segment or tenure?
  • What's the payback period on new customers?
  • Can they improve the product (snack selection, packaging)?
  • Should they offer annual subscriptions to lock in customers?
  • What retention tactics might work (pause options, loyalty rewards)?

 

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