Firstly one should never make the fatal mistake and discontinue unprofitable products and customers without thorough investigation. There are valid reasons, why one should continue unprofitable products some mentioned above:
1. All products, even unprofitable ones absorbe fixed costs. Even if such a product was discontinued, these fixed costs would remain within the business and depending on the fixed vs variable cost split to supply this product, overall profit could suffer.
2. It is a strategic "loss-leader" product that is sold in combination with profitable products.
Once one has determined that an unprofitable product needs to be continued the following profit optimising steps should follow:
1. Assess if a price increase is possible to make the product more profitable.
2. Investigate if the product can be sold in bulk to reduce transaction costs.
3. Investigate if the product can be manufactured / sourced at lower costs.