Why are e-commerce profits decreasing? The key to growth lies in choosing the right strategy!

E-commerceThe real point of a company's collapse is never that it fails to meet profit targets, but that the boss has gone in the wrong direction.

When I first heard the idea that "profit targets force employees to work harder," I almost spat out my milk tea.

In the e-commerce industry, this approach is like using a compass to find WiFi – it's completely misguided.

I recently heard a cross-border e-commerce business owner share that his company has 6 people, and they are busy like spinning tops every day, spinning very fast, but they can't fly very high.

He said that to motivate everyone, he set a target of 30% profit growth for the team, hoping that everyone would be inspired when they saw the numbers.

After hearing this, all I could do was sigh and put my hand to my forehead: This isn't motivation, it's the timer button on a pressure cooker.

In e-commerce, profit is a crucial factor. It's never something that can be "achieved through hard work"..

it is The strategy you have is determined by the direction you take and the choices you make, not by the effort you put in.

What is effort? It's the accelerator.

What is strategy? It's the steering wheel.

If the steering wheel isn't adjusted properly, stepping on the gas pedal will only make you go astray faster.

Why can't the e-commerce industry use traditional "stress management"?

The e-commerce industry is an extremely counterintuitive industry.

A larger factory does not necessarily mean greater stability.

More people do not necessarily mean greater expansion.

More effort does not necessarily mean higher profits.

E-commerce is essentially a strategy-intensive industry.

Your todayWeb PromotionIs the strategy keeping up with the latest strategies?

Are you choosing the right products?

Does your traffic matrix capitalize on the current opportunities?

Are there any bottlenecks in your supply chain?

These are 100 times more important than working 3 extra hours overtime.

So when bosses focus on people, effort, and processes, they forget the most crucial essence—this industry is about winning by "making the right moves."

Why am I so resolute? Because I've been burned before.

Once, a cross-border company experienced a decline in profits.

During that period, the entire team was trembling with tension.

If we follow the traditional approach, we might be holding meetings every day, monitoring data every day, and focusing on execution every day.

The result? It will make the whole company even more exhausted, and profits will drop even faster.

Later we decided to do the opposite.

We did not work overtime.

No KPIs were increased.

The working hours were not extended.

We did only one thing: Scale up the key strategy of "product development" tenfold.

While others develop one SKU per week, we directly invest resources to achieve 10 per week.

Just one action.

Three months later, profits broke all previous records.

why?

In e-commerce, growth is not achieved by "breaking down targets".

Instead, they achieved a breakthrough by "grasping key strategies".

Effort is an accelerator.

Strategy is the engine.

If you don't replace your engine and just keep stepping on the gas, it'll burn you up, not make you fly.

The most common e-commerce companiesDeathMethod: Busy, but worthless

The reality for many e-commerce teams:

Busy every day.

I panic every day.

I feel like I have "a lot to do" every day.

But if you ask me a question:

Does what we're doing today have strategic value?

Most people remained silent.

It's not that the employees aren't hardworking, nor that they aren't smart.

The boss didn't provide a strategy.

If employees lack strategies, they can only fill the gaps with their labor.

Like trying to sweep away a tide with a broom, you can never get it clean.

Why do I say that "bonuses should be awarded to those who can come up with strategies"?

I often say something that really hits home:

The person who executes the plan is important, but the person who proposes the key strategies is even more important.

A well-chosen strategy can lead to months of growth.

An overtime shift can only maintain progress for a few hours.

Therefore, the company needs to have a rule:

For strategies that lead to business breakthroughs, a bonus of 2 will be awarded as follows:

The person who proposed the strategy – 15,000

The people who execute the strategy – 5000

Someone asked me, "Is this fair?"

I said it was perfectly fair.

Because strategy is about looking at the present from the perspective of the future.

Execution means looking to the future from the present.

Value is never the same.

Does a company with only 6 people still need a structure? Of course.

Many bosses believe:

Fewer people = no structure

Structure = Large Company Patents

This idea has really ruined too many people.

Even if your company only has 6 people, it must have a basic structure:

One person handles the strategy and direction. Another person manages the timing and personnel. The others execute the plan.

Why divide it this way?

Without direction, everyone is just blindly stumbling around. Without rhythm, execution lacks focus. Without structure, efficiency will never improve.

Small companies need structure even more because they can't afford to make mistakes.

You must train the team's central nervous system from a young age— Focus on strategy, not tasks.

This is the underlying logic from 1 to 10, and from 10 to 100.

The true underlying logic of e-commerce is not about human effort, but about choosing the right strategy.

There are so many hardworking employees in this industry.

There are also many teams that work incredibly hard.

But the teams that choose the right direction will always be the ones that win.

If you're heading in the wrong direction, no matter how hard you try, you'll only see negative growth.

How far you can go does not depend on how hard your employees work.

It depends on the boss's strategic choices.

This is the most easily overlooked, yet most crucial, ironclad rule in the e-commerce industry.

Conclusion: Strategic thinking is the only moat for e-commerce companies.

Many companies fail not because the market is too difficult.

It's because the boss only uses "hard work" to explain everything.

In reality, companies that are at the forefront rely on more advanced capabilities:

1. Identify key variables.
2. Find growth levers.
3. Build a strategy system.
4. Let the team spend their time on the most valuable things.

This is the ceiling of an industry, and also the limit of how high a company can fly.

What truly drives a company's growth is not the exhaustion of working overtime, but rather precise and effective strategic approaches.

When a boss can truly understand this logic, he has already overcome the growth barriers that ordinary e-commerce companies cannot break through.

In short, in a nutshell:The e-commerce industry is inherently strategy-intensive, not labor-intensive.

Profits are not built by employees working overtime, but by breakthroughs in key strategies.

Employees being busy does not equate to company progress.

To make a team truly efficient, you must:

1. Focus on key strategies.
2. Establish the basic structure.
3. Reward those who propose growth ideas.
4. Reduce meaningless labor.
5. Focusing on direction is more important than effort.

When bosses are willing to shift from "monitoring people" to "monitoring strategies," the company's growth can truly begin.

If you are an e-commerce business owner, now is the best time to reshape your company's growth logic.