ROI here is measured against product cost only (a common Amazon-seller convention) — not total capital including ad spend.
Free Amazon ROI Calculator
Find your return on investment — how hard your inventory dollars are working.
ROI and margin answer different questions. Margin tells you how much of each sale is profit; ROI tells you how efficiently your capital is working. A product can have a modest margin but an excellent ROI if the product cost is very low relative to the price — which matters a lot when you're capital-constrained and deciding which SKUs to reorder first.
Worked Example
Example: Product costs $4.00, sells for $18.00, total fees are $6.50. Net profit = $18.00 − $4.00 − $6.50 = $7.50. ROI = $7.50 / $4.00 = 187.5% — meaning every dollar of inventory cost returns $1.88 in profit.
Formula
Net Profit = Sale Price − Product Cost − Total FeesROI % = Net Profit / Product Cost × 100