When your web page is crawled, a search engine spider (which is essentially a robot) will send information back to the search engine reviewing your website. Among keywords they will also send back sites linking to you as well as sites you link to. This information shows you are active in the community, and provides a boost.
Next, your sites content and structure needs to be concise and clear. It should have information that is easy to find, and flows smoothly between the pages. If the information is difficult, or if the search engine hits numerous 404 error pages it will harm your ranking.
Finally the most important part is the keyword ratio. For optimal results, without resulting in getting flagged you should keep your keywords to approximately 4% of the text of your site at a maximum, but no less than 2% so the search engine picks up on these keywords. To find the best keywords, and other searches that can stem from it, try the Google Wheel Wonder. It will provide you with valuable insight and new terms to help sprinkle among your pages to generate more traffic.
Overall, optimization can help you increase the traffic to your website, and provide you with a more extensive sales base than before. Plus since it is a free method of advertising you stand to lose nothing at all.