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The purpose of this study was to examine the effect of e-procurement on business profitability of SMEs during Covid-19 pandemic. This study has employed cross section design using both quantitative and qualitative data. The population of study involved five business sectors which were Communication, Construction, Agriculture, Health and Education. The study used convenience sampling to capture quantitative data and purposive sampling to capture qualitative data. Quantitative data were captured by using structured questionnaires while qualitative data were collected by using interview guide. Quantitative data were analyzed by using descriptive and inferential statistics while qualitative data were analyzed by using content analysis. The result indicates that among the three variables tested ie (time, cost and risk) the variable of risk was significant with p-value of 0.03. In order to achieve the competitive advantage, SMEs should use e-procurement as a strategy to mitigate risks including Covid-19 pandemic to increase business profitability. The study provides insights of using e-procurement during Covid-19 to increase profitability of SMEs as a new concept in developing countries including Tanzania.