Does Online Promotion have really lowered the mark-up?

Internet a big world to explore and a small word to say. Many SEOs are working continuously to promote their business online. But there are few business owners who still think that SEO is nothing. I met a person who was MD of a company and he told me that SEO is a JOKE. I was surprised to hear that from him, as he too is getting business from the web. In my 5 years of carrier I haven’t heard anything like this. As per him, “Due to huge competition, he is not able to make money from his customers. If I am making 100 bugs on one product selling it offline then I am making only 10-20 bugs while selling the product online”. I thought why not ask people whether they are able to make enough money while selling their products online. The first thing which comes to my mind was to conduct a poll only for service providers. Does Online Promotion have really lowered the mark-up??