One of the most addictive feelings when starting an online business is seeing orders coming in constantly. Each order notification gives the feeling that the business is on the right track. However, many people only realize after a short time that although the number of orders is not small, the actual money earned is not commensurate, or even negative.

The problem often lies not in the product or the market, but in evaluating effectiveness based solely on the number of orders, while ignoring a host of hidden costs.

The order number only reflects sales activity, not profit.

The number of orders indicates that you are selling goods, but it doesn't tell you how much money you are making from those sales. An order is only truly valuable when the profit earned is greater than the total cost of creating and fulfilling that order.

Advertising costs are not the only expense.

Newcomers often only factor in advertising costs when assessing profit and loss. However, advertising is just the tip of the iceberg. To complete an order, a business incurs many other costs that, if not included, will completely skew the assessment.

Operating costs silently erode profits.

Costs such as staff for order processing, packaging, warehousing, software, support tools, or even the time of the business owner themselves are often not properly accounted for. As the number of orders increases, these operating costs rise accordingly, and at a certain point, businesses realize that the more they sell, the more exhausted they become, while profits don't increase proportionally.

Shipping costs, return shipping, and loss risk.

Another often-overlooked hidden cost is the expense associated with shipping and returns. Not every order is successfully delivered, and each returned order entails shipping, handling, and inventory costs.

Taxes and financial obligations cannot be ignored.

In the early stages, many online businesses don't fully factor tax obligations into their profit and loss calculations. When tax costs accumulate or arise unexpectedly, businesses realize that their actual profits are much lower than they initially thought.

Failing to track cash flow leads to a misjudgment of the entire operation.

Revenue recognition doesn't automatically mean the money has arrived in the account, and expenses don't always appear immediately. When cash flow is uncontrolled, businesses can easily find themselves in a situation of "selling well but still short of cash."

Why are newcomers so prone to making these mistakes?

The biggest reason is the lack of a unified data system. When information about orders, costs, advertising, and operations is scattered across multiple locations, seeing the big picture is nearly impossible.

How does GTG CRM help avoid the "many orders but no profit" mistake?

GTG CRM helps businesses centrally manage orders, revenue, and related activities within a single platform. With data stored and tracked seamlessly, business owners can clearly see the relationship between order numbers, advertising costs, operating expenses, and actual business results.

Instead of manually comparing data from multiple sources, GTG CRM automatically aggregates and analyzes the data, helping businesses make decisions based on facts, not emotions.

Read more: Guide to effective order management with GTG CRM

Conclude

The number of orders is a positive sign, but it's not the only measure of success. By focusing solely on the number of orders and ignoring hidden costs, businesses can easily find themselves producing a lot of work but not making a profit.

To build a sustainable online business, you need to see the whole picture, not just the easily visible part. And that can only be achieved with a sufficiently clear system for monitoring and control.