In this post you’ll learn:
- What one store owner did to go from 35 employees to record profitability with a fraction of the team
- Why the most profitable stores in our research weren’t the best at marketing
- The exact breakdown of how one owner can pay $54K less in taxes than another on identical profits
A store owner I know had 35 employees.
He was doing fine. Revenue was solid. But profitability was always tighter than it should have been, and he was constantly stressed. Managing 35 people is a full-time job on top of your full-time job.
Then he made some hard calls.
He went remote. He hired a 3PL. He replaced most full-timers with freelancers and contractors.
Today he runs with one employee and eight contractors. His profits have never been higher. His stress has never been lower.
This story stuck with me because it contradicts most of what we hear about growing a business. More revenue means more people, right? Scale requires headcount?
Not necessarily. And this isn’t just one anecdote.
What the Research Actually Shows
When I studied what separates profitable stores from struggling ones across hundreds of businesses, I expected marketing to be the differentiator.
It wasn’t.
The difference in ROAS between top and bottom performers was negligible. The stores crushing it on profitability weren’t necessarily better at Facebook ads or SEO.
What did separate them?
Top performers had half the payroll. They were 25% more likely to outsource warehouse operations. They were 25% less reliant on paid traffic.
Operational leanness beat marketing cleverness every time.
I’ll be refreshing this data in the upcoming eComFuel Trends Report. If you run a store and want to help validate (or disprove) these patterns: participate here.
“Top performers had half the payroll. Operational leanness beat marketing cleverness every time.”
Lean Means More Than Headcount
When people hear “stay lean,” they think layoffs.
But overhead is everywhere.
It’s the nice office that felt necessary in 2019 but sits half-empty now. It’s the warehouse space you’re paying for when a 3PL could handle fulfillment better and cheaper. It’s the SaaS subscriptions auto-renewing every month—$50 here, $200 there—that you forgot you signed up for.
One useful filter: what’s actually core to your brand?
If design is what makes you special, keep your designer in-house. If packing boxes isn’t your competitive advantage, why are you running your own fulfillment operation?
The store owners winning on profitability aren’t just cutting costs randomly. They’re being intentional about what deserves their resources and what doesn’t.
The Uncomfortable Truth About Hard Conversations
There’s a quote I come back to often: your success in life is measured by the number of hard conversations you’re willing to have.
Most of us avoid hard conversations until we’re forced into them.
When recession hits. When cash gets tight. When profitability drops to the point where it’s an existential crisis.
The owners winning on profit are having those conversations proactively. Before they have to.
They’re asking: do we really need this role, or did we just hire because we felt busy? They’re asking: are we paying for this tool out of necessity or habit? They’re asking: what would we cut if we had to cut 25% tomorrow?
And then they’re actually making some of those cuts. Not because they’re in trouble. Because they’re being intentional.
The Second Unsexy Lever
I used to think of taxes as a fixed cost. You make money, you pay your percentage, you move on.
Then I met store owners who were paying a fraction of what I was on similar income.
They weren’t cheating. They weren’t using some exotic offshore scheme. They were just being deliberate about something most of us treat as an afterthought.
Here’s an example that illustrates what’s possible.
A Tale of Two Owners
Imagine two store owners with identical businesses.
Same $2.5M in revenue. Same $250K in profit. Same salary. Same family situations—married with three kids.
Owner A pays $75K in taxes every year.
Owner B pays $21K.
The difference? Owner B is intentional about after-tax outcomes. Here’s exactly what he does differently, assuming roughly a 30% marginal rate:
Profit sharing: He contributes $45K into retirement accounts through profit sharing, well beyond the standard 401k employee limits most people think of.
Savings: ~$13,500
Appreciated stock donations: When he donates to charity, he donates stock that’s gained value instead of cash. He avoids the capital gains tax entirely and still gets the full deduction.
Savings: ~$3,500
Maxed HSA: He contributes the full $8,500 family limit to his Health Savings Account—triple tax-advantaged money.
Savings: ~$2,550
Paying his kids: His three kids do real work in the business. He pays them each $7K. It’s deductible for him, and they invest it in Roth IRAs where it grows tax-free for decades.
Savings: ~$6,300
Inventory donations: He has $60K of old inventory that wasn’t moving. Instead of liquidating at a loss, he donated it to charity and took the deduction at fair market value. This one is huge and massively underutilized in eCommerce.
Savings: ~$18,000
Total difference: ~$54,000 per year
Why This Stays Invisible
The reason most store owners miss these opportunities is that taxes are scattered everywhere.
Personal returns. Business filings. Brokerage accounts. Payroll tax reports. There’s no single dashboard showing you the full picture.
So you never see what you’re actually paying. And you never think to ask if you could be paying less.
Owner A in our example isn’t dumb. He just never sat down and added it all up. He has a decent accountant who files everything correctly. But decent accountants don’t proactively bring you ideas—they just process what you give them.
A Simple Test for Your CPA
Here’s a question: when’s the last time your CPA came to you with an idea?
Not answered a question you asked. Not filed your returns accurately. Actually reached out proactively and said: “I’ve been thinking about your situation, and here’s something we should consider.”
If you can’t remember, you probably have a fine accountant. Fine accountants know the basics.
But fine accountants cost you real money in missed opportunities. The $54K difference between Owner A and Owner B isn’t complicated—it’s just intentional.
If your CPA isn’t bringing you ideas, it might be time to find one who will.
Two Levers Most People Ignore
Marketing gets all the attention. ROAS. CAC. LTV. These are the metrics everyone tracks, the topics everyone discusses, the problems everyone’s trying to solve.
But the store owners who actually win on profitability?
They have half the team. They pay a fraction of the taxes. They keep more of what they make.
Better marketing is great. But keeping more of what you already earn is often the smarter place to start.
“Better marketing is great. But keeping more of what you already earn is often the smarter place to start.”
Want to Go Deeper?
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