How to Calculate Return On Investment in Ecommerce 2020

To calculate the ROI, first, you need to calculate your spending. This means looking at the number of employee hours used, the cost of inventory, warehouse or packaging and any money spent on additional tools and resources. 

There's no one standard way to calculate or use ROI for your eCommerce store. You need to know your KPIs and to create a goal to improve your business. 

For example, your website can make or break your eCommerce operation. 

In fact, “75% of online shoppers judge your business’s credibility by your website design alone.”  

The other example is to see how to know your ROI:

If you have an average customer acquisition cost of $15 and each new customer results in a $5 profit, that's a 30% ROI. If you have a small subsection of customers who are creating a $15 profit, however, that's a 100% ROI for that group of buyers. Looking at how much value those customers bring to your business and how they're finding your site can help you fine-tune your marketing plan so that you're consistently attracting the best customers.  

Bottom line, the more metrics you're evaluating, the better you’ll be at identifying the investments that are moving the needle for your eCommerce business. 

ROI = Net Profit / Total Investment * 100.

Return On Investment Calculator: