Glossary / ROI (Return on Investment)
ROI (Return on Investment)
Net profit as a percentage of what you invested.
ROI measures how efficiently your money is working. It compares your net profit to what you originally invested (your COGS). Formula: (net profit ÷ COGS) × 100. A high ROI means you turned a small investment into a large return. ROI is especially useful for comparing deals — a $5 profit on a $5 item (100% ROI) is often better than a $15 profit on a $60 item (25% ROI).
Example
You buy a game for $4 and sell it for $22. After $3 in fees and $4 shipping, net profit = $11. ROI = ($11 ÷ $4) × 100 = 275%.
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