12 Tips to Maximise Profits in Business

Profitability reflects how effectively an organisation can generate the highest possible return while keeping its costs under control. At its core, profit rises when revenue increases and/or expenses fall.

In practice, however, improving profitability is far from straightforward. Sales and costs rarely move in neat, predictable steps. Putting too much emphasis on driving sales can expose the business if demand suddenly softens, while cutting expenditure by turning to cheaper inputs may undermine product quality and ultimately, customer trust.

It’s unsurprising that business leaders routinely grapple with a central challenge: how do you actually maximise profit? In this article, we explore what maximising profit really entails, and how businesses can strengthen resilience and customer satisfaction at the same time.

How to Maximise Profits in Business: 12 Tips

How can organisations lift margins without compromising quality, customer trust or resilience? By balancing growth with control and making improvements that stick.

These 12 tips span disciplined cost management, pricing and product mix, customer lifetime value, supplier optimisation, demand forecasting, inventory hygiene, employee engagement, fulfilment accuracy, recurring revenue models and KPI rigour to help your organisation do just that.

1. Evaluate and manage operating expenses (OPEX)

   OPEX represents the day-to-day costs required to keep a business functioning. These outlays typically include rent, utilities, equipment and inventory handling, marketing and advertising, research and development (R&D), selling, general and administrative activity and payroll.

   What OPEX doesn’t cover are the direct costs tied to producing goods or delivering services, which fall under cost of goods sold (COGS). Major purchases such as property or machinery are treated as capital expenditures instead of operating costs.

   Because OPEX is not directly linked to manufacturing output, it’s often the first area management examines when looking to rein in spending. But reductions made too quickly or without proper evaluation can cause lasting harm. Leadership teams need to assess the broader consequences of every cut. Reducing marketing or advertising, for example, may depress sales pipelines six, 12 or 18 months down the line. Similarly, scaling back R&D today could leave the organisation with no new offerings to bring to market a year or two from now.

2. Review pricing and cost of goods sold (COGS)

   Cost of goods sold (COGS) covers the direct expenses involved in producing an item or delivering a service, typically materials, components and labour. Accurate, consistent COGS calculations are the foundation for setting appropriate pricing and protecting margins.

   To manage this effectively, businesses must clearly define, measure and cost the labour time and material inputs required for each build or service cycle. Standardising production steps allows teams to predict true costs more reliably and minimise variation between batches, helping maintain consistent COGS across similar jobs.

   While COGS can, in theory, be reduced quickly by reducing labour costs or sourcing cheaper materials, such decisions carry risks. As with operating expenses, leaders must consider the long-term impact: could production slow down, or might quality decline in a way that damages customer satisfaction or future sales?

3. Reassess your product range and pricing approach

   Building on the previous points, it’s essential to maintain an accurate understanding of the unit margins for every product in your catalogue and to refresh this information regularly.

   A helpful practice is to conduct a portfolio review before introducing anything new. Are certain products consistently underperforming? Do you have offerings that are complex or costly to produce, draining time, resources and profit? Could adjusting the price of high-margin items help stimulate additional demand? Equally, businesses shouldn’t hesitate to retire low-margin lines or increase their prices where appropriate.

4. Upselling, cross-selling and reselling

   Acquiring new customers is costly, which is why many successful businesses focus on building revenue from the customers they already have. Introducing existing buyers to additional products through upselling, cross-selling and reselling can be an effective way to grow sales.

   Ensure your sales team is well trained in upselling techniques and understands how to present options without appearing pushy and putting customers off the purchase. An educational, benefits-focused approach tends to work best, explaining how enhanced features or premium versions could better meet the customer’s needs. Visual aids such as comparison charts or feature grids can make these conversations clearer and more persuasive.

   Cross-selling offers another straightforward route to increase a customer’s purchasing volume. Promotional bundles can help customers discover related products, such as adding a free shampoo when they buy hairspray. Cross-selling also works without discounts – often, a simple recommendation from a sales assistant that two items complement each other is enough. Online, automated prompts based on what a customer has placed in their basket can achieve the same goal.

   Reselling provides a further opportunity to generate revenue from existing inventory. By offering a buy-back or donation scheme, customers can return items they no longer use, provided they remain in good condition. After light refurbishment or cleaning, these products can often be sold again, adding profit while reducing waste.

5. Increase customer lifetime value

   Put simply, satisfied customers are one of the most powerful drivers of profitable growth. Genuinely understanding your audience and consistently delivering strong experiences is often the most efficient way to build loyalty and generate new business through word of mouth.

   By showing appreciation for existing customers, you can enhance their lifetime value, stimulate referrals and ultimately strengthen profitability. Some practical ways to achieve this include:

   • Incentives. Provide tailored offers based on products a customer has previously shown interest in, along with a promotional code they can pass on to friends or relatives.
   • Encouraging referrals. Introduce a referral scheme that rewards customers who recommend your products or services to others.
   • Recommendations and reviews. Motivate customers to share positive experiences or favourite items on social media. Authentic endorsements from real users can be highly persuasive - and cost nothing.
   • Customer retention. Today’s consumers place great importance on the quality of their interactions with a brand. Every touchpoint can shape their sense of trust and loyalty. While value, dependable service and quality remain essential, the overall experience and emotional connection increasingly determine which companies stand out in competitive markets.

6. Reduce overhead and strengthen supplier terms

   In manufacturing environments, one of the quickest routes to improved margins is often found in the supply chain. Securing more favourable supplier pricing can materially reduce COGS. If multiple vendors provide the same component, it’s worth exploring whether shifting volume to a single partner could unlock economies of scale.

   Incrementally increasing orders with one supplier while reducing them with others may help you qualify for volume-based discounts. Consider this example: you purchase 21,000 bottle caps each month, split evenly across three suppliers at 7,000 units each to maintain supply chain resilience. Supplier A, however, offers a 20% discount on orders of 10,000 units or more. By increasing its allocation by 3,000 and reducing the other suppliers’ orders by 1,500 each, you could immediately benefit from a 10% saving.

   It’s also worth examining your broader procurement activity. If you have expanded the range of items purchased from an existing supplier, have you renegotiated along the way and requested improved pricing? Each additional product creates another opportunity to revisit terms.

7. Improve demand forecasting

   Holding more raw materials or components than you need ties up cash and increases storage costs. In some cases, stock may spoil or become unusable, requiring replacement. Conversely, if inventory levels fall short of demand, you may face premium charges for urgent replenishment or expedited freight, both of which inflate COGS.

   Customer returns also introduce added complexity. Across Europe, for example, 20% of online fashion purchases are returned. It’s important to have a strategy for recovering as much value as possible from returned items. Accurate forecasting that uses past sales patterns, seasonal trends and forward-looking projections helps strike the right balance. With better visibility into likely demand, companies can reduce excess stock, minimise stockouts and optimise their working capital.

8. Clear excess or outdated inventory

   A similar issue arises when promotional or seasonal items fail to sell as projected, leaving you with stock that has become obsolete. Every day this inventory remains in your warehouse, it occupies space that could instead be used for faster-moving, higher-margin products.

   The first step is to try to recover value from this unsold stock. Options include selling through third-party marketplaces such as Amazon or eBay, offloading items via discount channels or outlet partners, or using reverse-logistics providers. If resale isn’t viable, donating goods for a tax deduction may be the most practical alternative. The right approach will depend on transport, handling, inspection and restocking costs.

   Once resolved, take time to review what led to the overproduction, and put steps in place to prevent a repeat scenario.

9. Engage and motivate employees

   Depending on the sector, a powerful way to involve your workforce is to encourage them to help identify opportunities to cut waste. This approach not only supports cost reduction but can act as a practical entry point into broader sustainability efforts.

   Employees often understand production processes more intimately than anyone else. For example, they may know the most effective fabric cutting patterns or the best way to use materials with minimal excess. By gathering their suggestions and building them into your production methods, you reduce waste, ensure the correct components are used, improve build accuracy and help products pass quality checks on the first attempt. This also supports environmental goals and reinforces a positive experience for customers.

   When items must be reworked, repaired or discarded altogether, it drives up labour costs and generates unnecessary waste. The more guidance you can give on selecting the right components – whether it’s specifying the correct storage bin or using tools that highlight the bin during picking – the more precise your assembly process becomes, resulting in cleaner operations and a more sustainable footprint.

10. Improve order accuracy and fulfilment efficiency

    Getting the correct product to the customer on the first attempt is essential for satisfaction and for protecting your margins. If the wrong item is shipped, you’ll need to send a replacement, pay for an additional delivery and potentially cover a third shipment if the original product needs to be returned. On top of that, staff time is required to receive the returned item, assess its condition and either repackage it for resale or absorb the loss and dispose of it.

    Beyond the inconvenience, all of these costs are entirely preventable. When gathering employee suggestions to improve efficiency, ensure the discussion includes ideas for achieving consistently accurate fulfilment, so orders go out correctly, every time.

11. Introduce recurring revenue streams

    Recurring revenue offers a reliable way to stabilise sales and smooth out fluctuations. There are two primary approaches to increasing monthly recurring revenue (MRR) or annual recurring revenue (ARR):

    1. Add services to complement products: Examples include routine cleaning, maintenance or other scheduled support for an additional fee. These services enhance customer satisfaction by removing the responsibility of managing upkeep themselves and ensuring tasks happen on time with minimal effort.
    2. Offer product subscriptions: Automatically sending items that customers purchase regularly creates convenience and reduces the likelihood of missed orders. You might also provide a discount for automatic replenishment of high-volume products to encourage sign-ups and strengthen loyalty.

12. Track KPIs and benchmark consistently

    Setting clear benchmarks is essential for assessing performance and supporting ongoing improvement. By reviewing key performance indicators on a regular basis and investigating any unusual results, you can identify emerging issues early and resolve them before they develop into larger operational problems - or unnecessary costs.

How Businesses Maximise Profitability With NetSuite

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Turn insights into outcomes with proactive alerts, drill-down details and a single source of truth across your organisation. Ready to boost visibility and profitability? Request a NetSuite demo today.