This is a Quora question I was asked to answer.
By margins I am going to assume net margin, which is net income.
Think of the flow of money in a consumer goods business as a way to help you improve margins. I have a spreadsheet model accompanying this graphic here.
In the first box – activity you do to acquire customers – you potentially improve margins by optimizing your media creative and media spend to acquire customers as cheap as possible. Ideally, you target the right customers who will buy from you again because on average, a repeat customer costs 7x less to maintain than acquire a new customer.
In the second box- activity happening on your website – you potentially improve margins by optimizing your landing pages and checkout funnel, minimizing cart abandons and adding in cross-sells and upsells and downsells to maximize your order value. I built a nice logic/rules-based funnel for Woocommerce that, once installed (you will need a developer), allows you to create your own cross/up/downsells rather than have to work through a developer. Grab it here along with documentation via my Github account.
The third box – which is your operations – you potentially improve margins by focusing on cheaper COGS, more efficient operations (logistics, warehousing, administration, etc).
If your question referred to better margins on your COGS or products you purchase to resell, that I suppose is more a factor of volume – the more gives you better economies of scale, and maybe proximity of supplier – the closer they are to you then less cost in logistics.
