1. Start with contribution margin, not revenue
Revenue tells only part of the story. A better measure is what remains after the direct variable costs of an order.
A simple approach
- Revenue
- − cost of goods
- − fulfilment
- − shipping
- − payment fees
- − return costs
- − direct advertising costs
- = contribution margin
Fixed costs such as staff, office, general software and management only come after that.
Why does this matter? Because two products with the same revenue can have completely different economics. A €100 product that leaves €30 after all direct costs is economically far stronger than a €100 product that leaves €8.
2. Treat advertising spend as a financial flow
For many webshops Meta and Google are among the largest monthly outflows. A business spending €30,000 or €50,000 per month on advertising should not look at that purely from a marketing perspective. It is also a financial flow.
Example (illustrative)
- Say: €40,000 advertising per month
- = €480,000 per year
- An economic difference of 0.5% = €2,400 per year
- An economic difference of 1% = €4,800 per year
So the choice of business card or financial provider becomes more relevant as your advertising budget grows. What matters is that you do not only look at the headline cashback rate.
- which transactions count
- whether advertising platforms are eligible
- which caps apply
- whether an expensive plan is required
- whether the rate is temporary
- and whether extra FX costs arise
The highest headline cashback is not automatically the highest net value. Our methodology explains how caps, costs and currency costs are netted against each other.
3. Make software costs visible
E-commerce businesses easily accumulate dozens of software subscriptions: Shopify apps, Klaviyo, Gorgias, Recharge, review systems, analytics, feed management, fraud prevention, warehouse tools and AI tools.
Individually the amounts look small. Together they can cost thousands of euros per month.
Run a software audit at least once a quarter
- Are you still using the product?
- Which functionality do you actually use?
- Does another subscription already cover the same functionality?
- Are you paying for users who are no longer active?
- Can you pay annually at a better price?
- Is the product still needed at your current scale?
The easiest software saving is usually the subscription nobody dared to cancel.
4. Look at bookkeeping as a process cost
Bookkeeping is often seen as a fixed accountant fee. But a large part of the real cost sits internally. Someone has to find receipts, download invoices, collect Meta and Google invoices, link card transactions, categorise payments, investigate differences and chase missing documents.
Example (illustrative)
- Say: 5 hours of admin per month
- = 60 hours per year
- At an internal value of €40 per hour = €2,400 per year
A financial provider with a strong link to your accounting system can therefore be economically more interesting than a provider with slightly more cashback but far more manual work. See automating e-commerce bookkeeping.
5. Check your currency costs
E-commerce is often international. You can sell in euros and still pay in dollars for advertising, software, suppliers, freelancers and logistics. Every currency conversion can carry a spread or markup.
Example (illustrative)
- Say: €20,000 of foreign-currency spend per month
- A 1% difference = €200 per month
- = €2,400 per year
- FX markup
- multi-currency wallets
- supported currencies
- costs for incoming foreign currency
- conversion costs
For larger webshops this adds up quickly. More in FX costs in e-commerce.
6. Optimise payment methods on net result
A payment method with a high conversion rate is valuable. But here too you need to look at the full result.
- conversion
- transaction costs
- refunds
- chargebacks
- operational load
The cheapest payment method is not necessarily the most profitable one. But a payment method that barely adds conversion and is structurally more expensive is a candidate for optimisation.
7. Examine fulfilment per order
Fulfilment costs usually consist of more than one amount: pick & pack, storage, packaging materials, carrier fees, surcharges and returns processing.
Calculate fulfilment cost per order rather than only the monthly invoice. Segment by country, product type, order value and number of items.
That shows which orders are operationally healthy and which revenue actually produces little margin.
8. Make returns part of your margin calculation
Returns are not a separate customer-service problem. They directly affect shipping costs, fulfilment, inventory, payment costs, staff, discounts and product margin.
Analyse return rates per SKU, campaign and acquisition channel. An advertising campaign with high ROAS but exceptionally many returns can be far less profitable than the ad dashboard suggests.
9. Negotiate once you have volume
More volume does not only mean higher costs. It also means negotiating power: payment processing, logistics, software, agency fees and financial providers.
Many pricing models are designed for small businesses that never ask for different terms. At a certain scale, tailored terms can be worth a lot.
10. Measure net provider value, not one feature
A financial provider can look attractive because of 1% cashback. But suppose the total picture looks like this:
Example (illustrative)
- cashback: + €4,000
- plan fee: − €1,200
- extra card costs: − €400
- FX disadvantage: − €1,500
- administrative saving: + €2,000
The real economic impact is then very different from that 1% alone. Provider selection has to be treated as a total calculation. The provider directory shows which components apply per provider.
11. Automate before you add headcount
Growing webshops often solve administrative complexity by adding people. Sometimes that is necessary. But first check which processes require human work at all.
- receipt matching
- invoice collection
- categorisation
- reconciliation
- payment approval
- expense management
A process that software can eliminate does not need to be maintained with extra staff later.
12. Make margin optimisation a recurring process
A webshop changes constantly. Advertising budgets grow. Providers change their rates. Software gets more expensive. You enter new countries. You use other currencies.
Margin optimisation is therefore not a one-off project. Run an economic review every quarter, for example.
- marketing efficiency
- software
- payments
- fulfilment
- financial providers
- bookkeeping
- FX
How to organise the parts as one system is covered in the ideal financial setup for an e-commerce business.
Conclusion
More profit in e-commerce does not always start with more traffic or more revenue. The first step is understanding how much of your existing revenue actually remains.
For many businesses the biggest improvement sits in dozens of small costs that have not been reviewed for years.