Return on Investment (ROI)
Return on investment (ROI) for an Amazon product is your net profit divided by your total cost, expressed as a percentage — how much you earn back on every dollar you put in.
The formula is ROI = (net profit ÷ total cost) × 100. If a unit costs you $10 all-in and returns $4 of net profit, that's a 40% ROI. 'Net profit' here must be after all Amazon fees, prep, shipping, and VAT — using the supplier price alone overstates ROI badly.
ROI is not the same as profit margin. Margin is profit divided by the sale price (revenue); ROI is profit divided by your cost. ROI matters most for arbitrage and wholesale because it tells you how hard your cash is working and how fast it can recycle — a 40% ROI that turns over monthly beats a 60% ROI that takes a quarter to sell.
Many sellers set a minimum ROI threshold (commonly around 30%) and a target buy price that hits it. The free ROI calculator works both directions for one product; the full app ranks an entire supplier file by ROI on real landed cost.
Frequently asked questions
- How do you calculate ROI for an Amazon product?
- Divide net profit by total cost and multiply by 100. Net profit must be after Amazon fees, prep, inbound shipping, and VAT — not just the difference between buy price and sale price.
- What is the difference between ROI and profit margin?
- ROI is profit divided by your cost; margin is profit divided by the sale price. The same deal shows a higher ROI than margin, so always compare like with like.
- What is a good ROI for Amazon FBA?
- There's no universal number, but many wholesale and arbitrage sellers aim for at least 30% ROI on true landed cost, adjusted for how fast the product turns over.