Email marketing: how it works, what it costs, and what to expect

Automated emails produce 30% of email-generated sales from just 2% of total email volume, as the Omnisend Ecommerce Report showed. While social channels rely on unpredictable algorithms, email marketing provides you with a direct communication channel that you own.

It’s one of the most profitable digital strategies available, and that’s backed up by returns as high as $79 for every $1 spent, as shown by internal Omnisend data. 

By the end of this guide, you’ll be able to build an engaged subscriber list, understand data privacy regulations, select the appropriate sending platform, and launch targeted campaigns that measurably increase ecommerce revenue.

What is email marketing?

Email marketing is how you can reach your subscribers and customers via their email inbox. Businesses use email marketing to announce new products, send discount codes, promote events, nurture loyalty, and more. 

To do that, you’ll first need to create a list-building strategy and have people opt in to your email marketing communications, which is required by data privacy regulations. That’s usually done using pop-ups offering discounts for first-time purchases in exchange for the visitor’s email address.

Once you’ve become more adept at creating email marketing strategies, you can start building supporting campaigns for broader strategies that affect the entire customer journey: lead generation, brand awareness, relationship building, and retention.

What are the benefits of email marketing?

The benefits of email marketing are plenty: direct communication with an interested audience, measurable and cost-effective returns, increased repeat purchases, automation, and full audience ownership.

Unlike social media channels that are associated with unpredictable algorithms, you can use email to have a direct line to your subscribers at all times. If done correctly, you’ll be able to achieve high ROI consistently and make use of internal engagement data to improve your communications.

1. Direct communication

Email marketing continues its upward trend: the average open rate increased from 26.6% in 2024 to 30.7% in 2025, which makes direct communication even more desirable. 

Having a list of people who have agreed to receive communications specifically from your brand is a luxury when every brand is gunning for people’s attention. You can use this opportunity to target different contacts and send tailored messages to them based on customer behavior.

Personalization is highly likely to increase engagement, as data shows that segmented campaigns consistently outperform generic mass emails in both open and conversion rates.

2. Cost-effectiveness, ROI, and measurability

Using email marketing, ecommerce businesses manage to generate between 3600% and 4000% ROI for every $1 spent, and Omnisend users in the US even reach 7900% ROI. 

Compared to other channels, you can see that SEO drives around 721% ROI, SEM/PPC ads 24%, Facebook ads 443%, and influencer marketing 689%.

These results come mostly from the channel’s cost-effectiveness and trackable metrics (like open rates, CTR, conversion rate, bounce rate, and more) that businesses can use to improve their results with every single send.

3. Drives repeat purchases for ecommerce

While repeat customers make up only 21% of shoppers, they generate 44% of revenue and order 300% more than first-time buyers. With ecommerce email marketing, you can target this segment of customers specifically with tailored messages to bring them back.

You don’t even need to send manual campaigns every time; you can set up automated sequences that nudge this segment every once in a while with product recommendations, restock alerts, special offers, and gratitude emails for being loyal customers of your brand.

4. Automation and efficiency

Automated emails deliver 24% higher open rates, 6x more clicks, and 19x higher conversion rates. These emails are triggered by customer behavior, which means they reach people when interest is already high.

For example, a customer who leaves items in their cart can automatically receive a reminder email. New customers can get a welcome series, and past buyers get follow-ups. 

5. Audience ownership

On platforms like Instagram, the average engagement rate for business posts is only 0.45%, which means most followers don’t interact with your content. With email marketing, you can tailor messages to specific audience segments and drive repeat business.

Email marketing lets you own your audience, which means that no algorithm can decide who sees your messages and who doesn’t. It’s completely up to you, your strategies, and your compliance.

How does email marketing work?

Email marketing works through three main elements: an opt-in contact list, a sending platform, and a goal that you have.

The contact list

Before you can send campaigns, you need to build a legitimate list of subscribers who agree to receive messages from you. Businesses usually collect these opt-ins via website pop-ups or checkout checkboxes. This is important to maintain compliance with privacy regulations like the General Data Protection Regulation (GDPR) and Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM).

You may be tempted to buy an email list, but that’s a bad idea regardless of how you look at it. People on the list won’t know who you are, so they will either ignore your message or open it and report it, which is bad news for your sender’s reputation and deliverability. Eventually, you may even face consequences with data privacy regulatory institutions.

The sending platform

To send emails in bulk and set up automated sequences, you need to find a reliable email service provider (ESP). Once you do, you’ll need to authenticate your sender email with SPF, DKIM, and DMARC security protocols, and you’re good to go.

Make sure to choose a platform that reflects your needs instead of just going with the most popular one. While costs may seem similar at the beginning, they may escalate significantly once your business grows.

The objective

Every single message should aim for a single goal to achieve the best results. While the end result is the same (revenue), the path to it is not the same for different customer segments. 

You’ll need to create:

• Promotional emails (focused on selling)
• Nurturing emails (warming the customer up for a sale down the line)
• VIP emails (focused on showing gratitude to your best customers so they continue buying from you)
• Loyalty emails (incentivizing your customer to continue buying to unlock rewards)

The list doesn’t end there. You’ll likely come up with more communication strategies as you go and as your business dictates the path forward.

What are the main types of email marketing?

Email marketing divides into two types: campaigns and automations. Campaigns are one-off sends the marketer schedules, including newsletters, promotional emails, product launches, and seasonal sales. Automations are triggered by shopper behavior, including welcome sequences, abandoned cart reminders, post-purchase confirmations, win-back flows, and feedback requests. Most ecommerce stores run both. Campaigns drive revenue on a set date, while automations send continuously once a shopper meets the trigger condition.

Welcome emails

You should set up welcome emails to send immediately after someone subscribes to your newsletter to maintain high engagement scores. In fact, they have the highest click-to-conversion rate at 50.98%.

For example, Revival’s welcome email uses a friendly tone, simple design, and a strong offer. It grabs attention with a clear $40 discount and a bold “SHOP NOW” CTA. 

Promotional emails

Promotional emails highlight discounts, special offers, or limited-time deals. They can be used to increase sales for welcome sequences or cart abandonment. You can also use promotional emails during holidays (like Black Friday). 

They’re effective at converting hesitant buyers into repeat customers by using personalized offers based on behavior.

For example, GOAT’s email highlights “over $10M in prizes,” with a “Download now” CTA. This creates excitement around the event and gets more people to download the app.

Abandoned cart emails

These are automated reminders sent to shoppers who add items to their cart but don’t complete a purchase. They highlight items left behind, often with images, prices, discounts, and a link back to the cart.

Send them within one to two hours after cart abandonment. Welcome and abandoned cart emails drove 76% of automation-generated orders in 2025.

Newsletter emails 

These educate, inform, and build loyalty rather than drive a hard sale. They often include behind-the-scenes content or tips on how to use products. Send newsletter emails weekly to keep your brand top-of-mind.

Post-purchase and order confirmation email marketing examples

Sent immediately after purchase, these confirm orders and include shipping details. Use them to reassure customers their transaction was successful.

Homes Alive Pets nails its post-purchase email with a warm thank-you that makes customers feel valued. The email is concise, features pet images, and provides order and contact details. It also gently encourages future purchases.

Re-engagement and win-back emails 

These target inactive customers who haven’t opened emails or made purchases recently. They often use discounts or free shipping to boost opens and conversions.

This Sourse email starts with a subject line: “We’ll give you 25% off to open this email.” This immediately creates curiosity and helps increase open rates. The “Goodbye” drives sales and reactivates customers.

Product launch and announcement emails 

You can use them to reach your most loyal customers first by providing early access. It helps generate sales before the official launch.

For example, Ray-Ban’s email includes a bold product image. The “Preorder now” CTA signals early access, making subscribers feel special. This is one of the best product launch emails that drives early sales and gauges demand for the new product:

Feedback and survey request emails 

These emails ask customers for feedback on a product. Send them after some time has passed after a purchase to make sure they’ve had the time to check it out. 

For example, Chewy’s product review email is polite and direct. It lists the purchased items, with clear CTAs, so customers can easily leave reviews. This helps build social proof and brand trust.

Seasonal and holiday emails

They’re used to capture high-intent traffic during peak shopping times. To make them effective, use urgency such as limited-time deals.

For example, Beats uses “Last chance to shop our holiday sale” in the email subject line to create FOMO. The email features a minimal layout, product images, an “under $100” offer, and a simple “Shop” CTA:

Email marketing metrics and benchmarks: what good looks like in 2026

The three metrics that are the most important for ecommerce stores are conversion rates, click-through rates, and revenue-per-email. These metrics provide direct measurements of how email marketing affects your bottom line.

Open rates also used to be one of the defining metrics, but ever since the Apple Mail Privacy Protection update rolled out, which started tracking pixels in 2021, it has become less reliable.

Here’s a brief rundown of the metrics we recommend you track to accurately evaluate performance:

• Conversion rate: It’s arguably the best metric that shows how well your campaign is performing. If your conversion rate is above industry benchmarks, it means all elements of your email (subject line, content, and offer) set accurate expectations and deliver the recipient to your checkout page.
• Click-through rate: While not as powerful as the conversion rate, CTR still shows how well your subject line and content align to the recipient’s expectations. If your CTR is high, but conversion rates are lacking, your landing page is likely the problem.
• Revenue-per-email: Your ESP can calculate this number using revenue numbers per campaign and total sends. It helps you see the raw number you can associate with your campaigns. You can use this number to compare different campaigns and automations to see what works best.

To expand upon more metrics you should know, we’ve provided a table below with explanations and benchmarks. However, you’ll notice there are average generic industry benchmarks, and Omnisend benchmarks next to them. 

These will be different because ecommerce-focused benchmarks aren’t inflated by non-profit and B2B emails. Also, high-frequency ecommerce sends typically yield lower average clicks but significantly higher revenue.

Here’s what good looks like right now, comparing general industry standards against ecommerce-specific data from Omnisend.

*Omnisend’s rate is lower because ecommerce promotion emails naturally generate fewer clicks per send.

**Omnisend’s rate is higher because most emails are centered around making a sale instead of other actions.

***Omnisend’s numbers exceed generic averages because automated ecommerce flows reach shoppers at the time when they’re ready to buy.

How much is an email list worth?

A 1,000-subscriber email list is worth roughly $1,294 per month, or $15,528 per year. We’ve achieved this number by taking Omnisend 2026 Ecommerce Report benchmarks, which stand at $0.18 for campaigns and $2.87 for automations. You can do the same math based on your own data and come up with your own number.

To calculate the expected value of your audience, use your performance data and apply it to a standard sending routine. For example, if you send one weekly campaign to a 1,000-subscriber list, that makes 4,000 campaign emails a month. That’s your campaign-centered number.

When it comes to automations, let’s say, for argument’s sake, that 20% of your list triggers an automation based on user behavior. That could be abandoned carts, welcome flows, browse abandonments, win-backs, and more. With 20%, you get 200 automated emails on top of the 4,000 that we calculated for campaigns.

Here’s a visual breakdown of the math:

There are three variables that move this estimate the most:

• List engagement defines how many people actually open and click your campaigns.
• Average order value determines the total revenue each of those clicks brings in.
• Automation coverage decides how often you capture high-intent buyers with triggered messages.

However, this estimate assumes only active subscribers; a list of 1,000 unengaged contacts is worth close to nothing, and that is the point.

What are the biggest challenges in email marketing?

The biggest challenges in email marketing are strict inbox deliverability standards, subscriber fatigue, privacy-related measurement gaps, and list-scaling costs.

Deliverability and domain authentication

Email deliverability is about making sure your emails land in subscribers’ inboxes. Some emails may get blocked or land in the spam folder. One big reason for this is sender reputation. 

• SPF (Sender Policy Framework) lists the IP addresses authorized to send from your domain.
• DKIM (DomainKeys Identified Mail) attaches a cryptographic signature to verify message integrity.
• DMARC (Domain-based Message Authentication, Reporting, and Conformance) defines how receiving servers handle emails that fail SPF or DKIM checks, which is required for bulk sends by Google and Yahoo.

These protocols, however, are hard to miss since most providers will throw this interface at you at the very beginning with clear instructions on how to complete the authorization. Also, it’s likely that you won’t be able to send emails using the ESP until you complete this process.

Inbox competition and email fatigue

Crowded inboxes can lead to email fatigue, where users ignore or unsubscribe from generic messages. In fact, 43% of people unsubscribe from being emailed too often. To stand out, you need to set up automations for personalized experiences. 

Personalized automated messages deliver 52% higher open rates, 332% higher click rates, and 2,361% higher conversion rates. 

You can segment your audience based on behavior like:

• Shoppers who abandoned carts
• First-time buyers
• Users browsing specific product categories

Measurement gaps from privacy features

In recent years, a privacy feature called Apple’s Mail Privacy Protection (MPP) rolled out. It started pre-loading tracking pixels automatically, which rendered opens unreliable as a primary performance metric.

It’s still widely tracked, but it’s important to keep in mind that it’s no longer what it used to be. Today, it’s better to evaluate campaign success using bottom-funnel metrics like click-through rates, conversions, direct sales, and revenue per email.

Escalating list costs

Most ESPs charge based on total subscriber count; others charge by monthly email volume. It’s essential that you connect your business model with the pricing strategy that works best for you. Otherwise, it may hurt your ROI.

Make sure you follow best practices like regularly conducting an email marketing audit to remove cold contacts who haven’t responded to any win-back campaigns. It will help you manage your resources better and see your performance for what it really is.

How to start email marketing in five steps

Learning how to start email marketing for beginners and advanced users alike comes down to capturing, engaging, and analyzing your audience. Here’s a sequence you should follow:

1. Choose an email marketing platform
2. Add your first sign-up form
3. Create a welcome email
4. Send your first campaign
5. Review and improve

1. Choose an email marketing platform

This is an important step that will define how you scale and generate ROI down the line, once your business has taken off. Evaluate several different platforms based on how well they integrate with your ecommerce store, their automation depth, segmentation capabilities, deliverability, pricing, customer support, and compliance.

Don’t default to the most recognizable name; take time to do the research instead, as it may save you a significant amount of money as you go. Most platforms don’t make migration simple. For a detailed breakdown of selection criteria, see the platform choice section below.

2. Add your first sign-up form

Your form should be easy to spot. You can also provide incentives like a discount, exclusive updates, or early access to products in exchange for sign-ups. This value should be stated clearly in the sign-up form. You can choose between different types of forms, including:

• A prominent pop-up that appears based on user behavior, such as exit intent
• An embedded form to place on your homepage or footer
• A gamified form offering discounts or prizes in exchange for emails

3. Create a welcome email

Welcome emails have some of the highest open rates. They reached an impressive 33.79% open rate in 2025. The key is to send welcome emails right after someone subscribes, since this is when they’re most interested in your brand.

Here’s how to make a great first impression with your welcome email:

• Express gratitude for subscribing
• Briefly introduce your brand
• Offer a discount or exclusive deal 
• Set expectations on what’s coming next

Here’s how Omnisend’s interface looks when creating a new welcome sequence: 

4. Send your first campaign

When sending a manual campaign, focus on a single objective instead of asking for three different actions. Most popular choices are promotional campaigns where businesses highlight two or three of their best-selling products or offer a limited-time deal to drive a first purchase.

Maintain strict consistency with your brand’s colors, fonts, logos, and tone of voice across every campaign, unless the situation demands otherwise. It will help you build recognizability and trust with your recipient. Last but not least, always double-check if your links work and preview the design on both desktop and mobile before sending.

5. Review and improve

Measure the results of your campaigns and automations to guide your strategy going forward. Use click-through rates, unsubscribe rates, revenue per email, conversion rates, and other bottom-funnel metrics to measure your success.

Track open rates, too, but don’t rely on them to provide a 100% accurate view, as privacy features like Apple’s Mail Privacy Protection may distort the data significantly.

If your CTR underperforms, test clearer CTAs or narrow down the customer segment in the next send to check whether the message appeals better to a more niche segment.

Email marketing laws: CAN-SPAM, GDPR, and CASL

Email marketing laws, or data privacy regulations, require you to obtain clear consent and offer a clear opt-out mechanism. These laws are there to protect people from spam and make sure that businesses use email marketing ethically.

Additionally, the California Consumer Privacy Act (CCPA) gives California residents the right to opt out of the sale or sharing of their personal data. Most email providers automate consent capture and technical authentication by default, so you need to carefully evaluate these features when you choose an email marketing platform.

How to choose an email marketing platform

To choose the right platform, you need to check how it integrates with your store, compare the depth of automation capabilities against your needs, and how costs scale as your subscriber list grows. It’s worth spending the time now to avoid potentially expensive and time-consuming migration processes down the line.

Core selection criteria

• Store integration: Does the platform sync product data, historical purchases, abandoned carts, and user activity natively, or do you need to configure custom APIs for that?
• Automation depth: Can you build multi-step workflows based on user behavior with conditional splits, or does it only support basic autoresponders?
• Deliverability handling: Does the platform manage sender reputation, monitor spam traps, help configure technical domain authentication, or do you need to handle it all on your own?
• Support availability: Can you reach a human support agent instantly at any time, or is it restricted to higher-tier plans or working hours?
• Pricing scale: How does the platform manage pricing if your subscriber list inevitably doubles or triples in size?

Best platforms for different businesses and their trade-offs:

With Omnisend, you also get award-winning 24/7 human customer support (free plan users included) and sophisticated AI functionality. Omnisend AI helps you build audience segments in seconds by simply writing a prompt of what you want to see, generate product recommendations, run RFM analysis, and forecast customer lifetime value.

There’s also the MCP integration that lets you query your store’s performance inside ChatGPT or Claude without constantly switching tabs. All these features are woven into existing workflows instead of just being bolted on.

Start your first email marketing campaign

Email marketing is one of the most effective and affordable ways to connect with your audience, nurture leads, and drive revenue. With the right tools and strategies, email marketing can increase revenue and give you insights on how to optimize emails.

Email marketing FAQs