How to Increase Profit on Amazon, Flipkart, and Meesho in India
As an e-commerce business owner, your sales might be growing every month. But does that mean your business is doing well?
Making a lot of sales doesn’t always mean you’re making a profit. To know if your store is truly successful, you need to track your profit margins.
The good news is that if your profits aren’t as high as they should be, you can fix them. We’ll show you how to calculate and increase your profits easily.
Before we dive into the details, it’s important to know that keeping accurate financial records is key to understanding your profits.
That’s where Billoora helps! Try it for free to see how we can easily track our finances like invoicing, expenses, tracking every penny spent in your business.
Key Takeaways from This Post
1. Making more sales doesn’t always mean making more profit. To understand if your business is truly successful, tracking profit margins is essential. Accurate bookkeeping and accounting play a crucial role in this, and tools like Billoora can help automate the process.
2. When it comes to profit margins, a good net profit margin for e-commerce is around 20%, while an ideal gross profit margin is about 45%. In the retail sector, margins are typically lower, ranging between 21.88% and 34.17%.
3. To improve your profit margins, managing returns, consider increasing product prices, cutting unnecessary costs, negotiating better deals with suppliers, and automating processes to save time and money. Expanding to new markets and selling on multiple platforms can also help boost profitability.
What is a Good Profit Margin for E-commerce?
For most e-commerce businesses, a 20% net profit margin is considered good.
Aiming for a 45% gross profit margin is ideal, but only a few businesses manage to reach that level.
According to NYU Stern data, the average gross profit margin across different industries is 36.56%. However, e-commerce businesses, which fall under the retail sector, usually have lower margins.
What is the Average Profit Margin for E-commerce?
E-commerce businesses usually have the following net profit margins:
- 5% – Low profit margin
- 10% – Healthy profit margin
- 20% – Good profit margin
If your business has a net profit margin above 20%, it’s performing very well.
Keep in mind: These numbers are just averages based on different businesses. Your actual profit margin may be higher or lower depending on your industry and how your business operates.
How to Increase Profit on Amazon, Flipkart, and Meesho in India
E-commerce in India has seen exponential growth over the last few years, with platforms like Amazon, Flipkart, and Meesho leading the way. While selling online presents significant opportunities, increasing profits requires a strategic approach. If you’re an online seller looking to maximize your earnings, here are some key strategies to boost your profits on these platforms.
1. Reduce Product Return Ratio (PRR)
Dealing with product returns can be frustrating for eCommerce businesses. Returns not only reduce profits but also lead to unhappy customers. That’s why PRR (Product Return Ratio) is an important number to track. This ratio shows the percentage of orders returned compared to the total orders shipped. A higher PRR means more customers are returning products, which can be a serious issue.
Here’s how to reduce returns and improve customer satisfaction:
- Improve Product Descriptions – Make sure your product descriptions are clear, detailed, and accurate. Provide all the important information so customers know exactly what they are buying. Use bullet points for key details and include size charts (especially for clothing and shoes) to prevent confusion. This helps customers make better choices and reduces returns caused by misunderstandings.
- Offer Great Customer Service – Make it easy for customers to reach you if they have any concerns. Respond quickly and politely to emails and messages. When customers feel heard and supported, they are less likely to return a product.
- Strong Packaging – Good packaging is essential to make sure products reach customers safely. If the packaging is weak or not done properly, there is a high chance the product will get damaged during shipping. Factors like weather, dust, rough handling, and sudden movements can all affect the product while it’s being delivered.
Even though shipping companies have Service Level Agreements (SLAs), the responsibility of delivering the product in good condition is still yours. A damaged product is almost always returned by the customer. Using strong and secure packaging helps protect the product and reduces the chances of returns, lowering the Product Return Ratio (PRR). - Quality Control – A great way to keep your Product Return Ratio (PRR) low is to have strict quality control checks in place. Make it a rule to inspect every product before listing it for sale and again when it arrives at your warehouse. One of the main reasons for product returns is defective items. By conducting regular quality checks, you can catch issues early and prevent faulty products from reaching customers. This simple step can significantly reduce returns and improve customer satisfaction.
2. Increase Basket Size and Average Order Value (AOV)
Let’s break it down simply. Basket size and Average Order Value (AOV) are important for increasing your eCommerce profits. The more items customers add to their carts, the higher the total value of each order, which means more revenue per purchase.
A higher AOV also helps you get better returns on ad spending. If a customer buys multiple items in one order, you make more money without spending extra on customer acquisition. This means more revenue without increasing marketing costs.
How to Increase Basket Size and AOV
You can boost basket size and Average Order Value (AOV) using three key strategies: cross-selling, upselling, and bundling.
- Cross-Selling – Suggest related products that go well with the customer’s purchase. For example, if someone buys a laptop, you can recommend a laptop bag or mouse to go with it.
- Upselling – Offer a better or upgraded version of the product they’re considering. This could be a higher-end model or a premium version with extra features.
- Bundling – Combine multiple related products into a single package at a discounted price. This encourages customers to buy more items together.
And don’t underestimate the power of free shipping! Offering free shipping on a minimum order value motivates customers to add more items to their cart to reach the free shipping threshold.
Studies show that cross-selling can boost AOV by up to 30% (McKinsey), while free shipping can increase cart value by 15% to 20% (comScore).
3. Keyword Research
Many sellers miss out on great opportunities with keywords. Even if you’ve already researched and ranked for hundreds of keywords, there’s always more to explore.
Start by searching for different versions and variations of your main keywords. Think about phrases like “[keyword] for…” and include details like size, color, and specifications to match what customers are searching for. Use a mix of these keywords in your product description to improve visibility.
Don’t ignore long-tail keywords—these may have lower search volume but attract customers with strong buying intent. Even if they seem too specific, they can bring in high-quality traffic that is more likely to convert. If you find valuable keywords you’re not ranking for, try adding them strategically to your listing.
4. Use High-Quality and Accurate Product Images
Clear and high-quality product images are crucial for attracting buyers and increasing sales. People process visuals much faster than text, so your product photos should grab attention and create a strong first impression.
Poor-quality images can hurt your brand’s reputation and make first-time visitors skeptical about your product. If your images don’t clearly show what the product looks like and how it works, customers may hesitate to buy. It’s your responsibility to provide detailed and accurate visuals so buyers can make informed decisions.
Avoid using stock photos or manufacturer-provided images, as they are often designed for wholesalers, not end customers. Many sellers, especially on platforms like Amazon India, source products from China via drop-shippers, leading to repeated images across multiple listings. If you use the same images as others, you’ll struggle to stand out, and buyers may choose a competitor who offers a lower price.
For example, if you’re selling a unicorn-shaped LED night light, the original manufacturer’s packaging might feature a Chinese child using the product, or the product may look overly enhanced. These images may not connect with your target buyers—while kids might be excited, it’s the parents who make the purchase.
Instead, take your own high-quality photos and videos using standard in-house equipment. Show the product in real-life settings, highlight key specifications, and ensure the images reflect the actual item customers will receive. This builds trust and reduces negative reviews from buyers who feel misled. When customers trust your product, they are more likely to buy again and recommend it to others.
5. Sync Your Stock for Better Inventory Management
If you sell on multiple platforms, synchronizing your inventory makes selling much easier. It helps you track stock levels, maintain consistent product descriptions, and update changes seamlessly across all platforms.
Losing a customer is costly, and order cancellations due to stock issues can harm your business. When sellers cancel orders due to incorrect stock levels, it negatively affects their seller rating and discourages customers from returning.
One of the biggest reasons for this problem is manual inventory management. As sellers expand to more marketplaces, keeping track of stock becomes more difficult. This is where eCommerce software can help by automating inventory updates, ensuring you never oversell or disappoint customers.
Final Thoughts
Every seller wants more sales, and the good news is that there are plenty of ways to boost your revenue on platforms like Amazon, Flipkart, and Meesho.
These marketplaces already have a large audience actively looking for products, making them great platforms to grow your business. While we’ve covered several effective strategies in this guide, there are always more ways to optimize your listings and increase sales.
One of the most important steps is to improve the SEO of your product listings. If you’ve already implemented other strategies, this can be a simple yet powerful way to gain more visibility and attract buyers.
By following the tips outlined above, you’ll be well on your way to higher sales, better rankings, and a stronger competitive edge in 2025 and beyond. 🚀
