ROI = (Net Profit ÷ Total Investment) × 100
Net Profit = Sales Revenue – Amazon Fees – Product Cost – Shipping Cost – Storage Fees – Advertising Cost – Other Expenses
Total Investment = Product Cost + Shipping Cost + Amazon Fees + Storage Fees + Advertising Cost + Other Expenses
Sales Revenue = Selling Price × Units Sold
Amazon Fees = Referral Fee + FBA Fulfillment Fee + Closing Fees + Any Other Amazon Charges
Product Cost = Cost per Unit × Units Purchased
Shipping Cost = Freight to Amazon + Inbound Shipping + Customs/Duties
Storage Fees = Monthly Storage Fees + Long-Term Storage Fees
Advertising Cost = PPC Spend + Sponsored Ads + Other Marketing Costs
Example ROI = [(Sales Revenue – All Costs) ÷ Total Investment] × 100
Example Net Profit = $1,500 – $900 = $600
Example ROI = ($600 ÷ $900) × 100 = 66.7%
Break-even ROI = 0%
Break-even Point = Total Costs ÷ Selling Price per Unit
Profit Margin = (Net Profit ÷ Sales Revenue) × 100
ROI and Profit Margin are not the same
Use per-unit ROI = [(Selling Price – Per-Unit Total Cost) ÷ Per-Unit Total Cost] × 100
Include return/refund losses if applicable
Include prep, labeling, and packaging costs if applicable
Include software, account, and overhead costs if applicable