Comparing ROI Calculation Methods

ROI (Return on Investment) tells you how much profit you’re making compared to what you spent. The formula is simple:

ROI = Net Profit / Investment

But what counts as "Investment"? That’s where AZInsight gives you flexibility.

3 Ways to Calculate ROI

Method 1: Basic ROI (Buy Cost Only)

• Investment = Buy Cost (what you paid for the product).

• Example: You buy an item for $10 and profit $5.

  • ROI = $5 / $10 = 50% ROI.

✅ Best for: Sellers who just want to compare profit to product cost.

Method 2: Buy Cost + Custom Costs

• Investment = Buy Cost + Extra Fees (like shipping, taxes, prep fees, etc.).

• Example: Buy Cost = $10 + $2 in fees. Profit = $5.

  • ROI = $5 / ($10 + $2) = 41.6% ROI.

✅ Best for: Sellers who want to factor in all upfront costs.

Method 3: Buy Cost + Custom Costs + Amazon Fees

• Investment = Buy Cost + Custom Costs + Amazon Fees (like referral fees, FBA fees, etc.).

• Example: Buy Cost = $10 + $2 fees + $3 Amazon fees. Profit = $5.

  • ROI = $5 / ($10 + $2 + $3) = 33.3% ROI.

✅ Best for: Sellers who want the full picture (including post-sale fees).

Key Notes

• ROI ignores your selling price—it’s all about profit vs. costs.

• 98% of sellers stick with Method 1 or 2 (they’re simpler and match traditional ROI views).

Pro Tip: If you’re new, start with Method 1—it’s the easiest to understand!