Many markets, especially online markets, are reaching the state of Perfect Competition. A state where buyer is king, information is freely available and competition is intense, many business owners are losing their fair share of hair trying to become more efficient. One way of doing this is streamlining costs and increasing Profitability!

Here are some Obvious but Overlooked ways of boosting profitability to your Online Business:

  1. Establish a Sound Supply Chain – This is an important point for both Service Providers as well as Producers. A sound supply chain not only helps you increase the quality of your work but can also reduce overtime costs, wastage (in transit or storage).
    It also enables stock market efficiency thus you do not lose customers for being ‘Out of Stock’. A well-managed supply chain (through effort and analytics) saved Online/Offline Retail Giant Tesco over 100 Mn pounds over 5 years.
  2. Marketing – Online businesses have access to a wide variety of mediums through which they can reach out to their Target Audience. Over 55% of B2B buyers search for information online before initiating a purchase decision. Thus sales are greatly increased (and in turn profitability) by being active online and on social media. Great content, SEO and SEM is key to profitable marketing in today’s digital age.
  3. Third Party Commissions – Many businesses prefer to sell their goods over Third Party eCommerce sites such as Flipkart and Amazon. Both charge commissions based on the product category and also charge for delivery, sale referral etc.
    For Example a seller of phone cover on Amazon is charged the following amount if the Selling Price (SP) is Rs 1000/-

    1. Referral Fee – 4% (Varies based on product category) = Rs 40/-
    2. Closing Fee – Rs 10/- (per unit sold) = Rs 10/-
    3. Shipping Fee – Minimum Rs 40/- + 1.25% of SP = Rs 77/- (Based on Outreach, weight of product)
    4. Service Tax ( 15% fixed on A+B+C)) = Rs 19.13/-
    5. Thus Total Cost of Selling on Amazon = Rs 146.63 ( Appx -15%)
  4. Re-marketing – Maintaining a CRM platform can rake in great profitability by making old customers repurchase your products and services. This profitability is the main reason why so many brands run so many different loyalty programs.
    Forbes Magazine (Feb 2013) through research has stated that keeping an existing customer is 7 times less expensive than acquiring one new customer.
  5. Payment Gateways – There are a wide variety of payment solutions that are available in the market and many of them require expensive equipment (Card swipe machines) .Cash collection agencies are also available but can be risky. There is a linked based payment system Easebuzz that enables etailers to collect payments from buyers/clients by simply sending a payment link which only requires the client to have a working Debit/Credit Card to make payments. No machines or equipments are required and the seller is only charged a 2% TDR. On top of this the customer receives a choice of redeemable coupons upto 50% of purchase value! Thus adding great value to both seller and client.

So keep in mind these 5 points to achieve profitability if you own an online business or are planning to open one soon!

Got any other ideas on how to increase profitability? Comment in the space below or right to us at


The author writes about fintech, banking, and future of SAAS services. He works as an SEO analyst at Easebuzz, so if you're looking for an account that tracks India's fintech scene, you should check out his Easebuzz blog.