How do businesses increase revenue and profits using E-commerce?

How do businesses increase revenue and profits using E-commerce?

Posted On: Feb 13, 2023 By leanne

E-commerce has allowed businesses to increase their revenues and profits by providing customers with an easy and convenient way to shop online.

It can also help them reduce costs associated with physical stores, such as rent, staff wages, etc.

The growth of E-commerce is driven by the increasing demand for online shopping due to the convenience it provides. With more people shopping online, businesses have a great opportunity to increase their revenues and profits through E-commerce.

In this article, we are going to look at ways that ecommerce websites can increase their revenue and profits, but before that…..

What is the difference between Revenue and Profits?

Revenue and profits are two terms that can be confused and are often used interchangeably. However, they are not the same thing. Revenue is the total amount of money earned by a company from its sales or services. Profits, on the other hand, is the net income after deducting all expenses incurred during a certain period of time.

Revenue is an important factor in determining a company’s success as it represents the amount of money generated from sales or services provided. It does not include any deductions for expenses such as taxes, wages and other costs associated with running a business.

On the other hand, profits represent the earnings that remain after all expenses have been deducted from revenue. It is an indication of how well a company is doing financially and can be used to determine whether it has achieved its goals for a particular period of time.

Offer free delivery

Businesses can offer to encourage customers to make online purchases. For example, studies have shown that 79% of customers are more likely to shop when they get free shipping.

Keeping in mind that people are more likely to make purchases on products that offer free delivery, if you are offering this and your competition isn’t it’s likely that the customer will feel more inclined to purchase your product. This is an effective way for businesses to attract new customers and keep existing ones coming back for more.

Hurdle Based Discounts

Hurdle based discounts can give businesses a way of increasing profits by incentivising customers to increase their order value, by offering something they want when their basket exceeds a certain threshold.

An excellent example of a hurdle based discount is offering free delivery, when the total of the customers exceeds a certain value. This is a win-win situation, shipping is still a cost the business has to cover, so free delivery can be offered when the basket total is worth it, whereas the customer is more likely to increase how much they order to receive the benefits.

This is just one example, others include sending a free item for orders over a certain value, as well as others.

Bundle Offers

Bundle offers is a strategic technique that involves grouping together several products and offering them at a discounted price. This provides customers with the convenience of getting a set of items together, at a better price than buying them all individually, thus increasing the total amount spent on each transaction.

Bundle offers are also beneficial for businesses as it helps them to promote multiple products in one go and generate more sales. They are therefore a great way to increase the average order value of a customer.

One big Ecommerce company where you might see a bundle offer is on Amazon. For example, if you went to buy a keyboard, you might then be offered a mouse and mouse mat as part of a bundle. ‘Bundling enables you to sell more and decrease marketing and distribution costs’, This saves businesses time and money on marketing as they don’t have to spend as much marketing on each individual product.

There are a few types of bundle offers that businesses might use.

Price Bundling

  • Two or more different products are sold together but for a single price.

Pure Bundling

  • In this case, products can only be sold as a package, in other words you will not be able to buy the products within this bundle separately.

Mixed Bundling

  • A product can be sold separately and also as a bundle, as mentioned previously, this is often seen in places such as amazon.

Add cross-sells and up-sells to products

Cross selling and up-selling are two different sales strategies used to increase the value of a customer’s purchase. Cross selling adds to the sale by including products that complement the current product and purchase. Up-selling, on the other hand, adds to the product itself by offering an upgraded version or an enhanced version of what was originally purchased.

Cross selling is often used in retail stores when customers are looking for additional items that could be useful with their current purchase. For example, a customer buying a laptop might be offered a carrying case or mouse as an additional item. Up-selling is typically used to offer a higher quality version of what the customer is currently viewing. For example, a customer buying a basic mobile phone might be offered an upgraded model with more features and capabilities. The main difference being that cross sales add to a product whereas, up-selling enhances a product.

Cross-selling and up selling are two powerful strategies that can help businesses increase their profits by encouraging customers to buy more but with added benefits.

These strategies can help businesses increase customer loyalty by providing them with relevant products that enhance their experience. It is also cost-effective and provides a high return on investment due to the increased sales and additional revenue generated. By using cross selling and up selling, companies can make sure that their customers are satisfied with their purchases and keep coming back for more.

Tiered discounts

Tiered discounts are a great way to encourage shoppers to buy more than one product. This is achieved by offering bigger discounts the more customers order.

See below of what tiered discounts might looks like:

Lollipops - £0.50 each

Order 5+ - £0.45 each

Order 10+ - £0.40

With tiered discounts, each step in the tier increases the discount, incentivising customers to purchase more of the item.

By offering discounts based on the quantity purchased, businesses tiered discounts act as an incentive for customers to purchase more products, which will increase sales, all the while, reducing overhead, packaging and inventory costs of each order.

Listed Products

Listing products on well-known websites like Amazon and Ebay, businesses will present a range of benefits. Product listing on these websites helps businesses reach out to a larger audience, thereby increasing their chances of making more sales. It offers a platform, which has a large base of existing customers where you can showcase your products in an organised manner. This offers another place for customers to find what you offer.

In addition to this, listed products are a great way to build credibility and trust with customers and help businesses cut on costs to maintain their profits. With nearly 90% of people across the UK shopping on Amazon, there was never a better time for businesses to list their products.

Google ads

Shopping Google Ads are a great way for businesses to promote their products and services to their target audience. With the help of these ads, businesses can target their audience by demographics such as, interests, location, and more. This helps them reach the right people with the right message at the right time.

Shopping Google Ads allow businesses to showcase their products in an ad making products more accessible to customers that might make a purchase decision. By using shopping Google Ads, businesses can effectively increase their visibility and reach potential customers who are looking for what they offer.

Using shopping ads is a great way to get seen, these will appear in the search results and in the shopping tab in google search and next to Google search results (given relevance to whatever the individual searches for)

Shopping Google Ads are becoming increasingly popular among businesses as they provide the opportunity to showcase relevant product information and increase quality leads. Shopping ads will supply customers with an image of the product, information and cost.

Therefore, Customers that click on your shopping ads are likely to have a high purchase intent and therefore, being able to present your product in a shopping ad is likely to increase sales. (Shopping Ads help to provide customers with accurate and up-to-date product information which is essential for making an informed purchase decision.)


Urgency is a powerful tool for businesses to encourage customers to make a purchase decision. It creates a sense of scarcity and encourages customers to act quickly. It is often used in the form of phrases like “only 5 left!” or “while stocks last”. This method has been proven to be effective in increasing sales and conversions.

Businesses use urgency as an effective marketing tool because it helps them tap into their customer's emotions and create a sense of priority that can influence their purchase decisions. It also helps them stand out from the competition by creating an atmosphere where customers feel like they need to act quickly before they miss out on something special.

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