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ROI (Return on investment)

ROI, which is used as an abbreviation of the term Return On Investment, means "return on investment" or "return on investment".

It is a frequently used metric for investment targets in the business world. It is a ratio between the costs and revenues of a specific or general investment in a given period. It can be calculated within adjustable periods such as monthly, annually, several months or several years.

ROI is a measure of investment performance and can be found wherever there is an investment.

It is a term that is frequently encountered in the e-commerce sector as a result of the transfer of investment to digital in recent years. It is useful to evaluate the efficiency of an investment, to compare more than one investment and to make predictions about future investments in this direction.

Why is Return On Investment Measurement Important?

ROI measurements allow you to access important data in every field of trade and at every step of investment. It is very important to calculate ROI in order for your investments to be successful and to ensure the continuity of your already successful investments. In short, with the ROI calculation; where and how much profit you can find out.

When you measure ROI, you can distinguish between profitable campaigns and unproductive campaigns. Thus, you can withdraw your investment in unproductive campaigns and invest in the campaign you make profit, and increase your earnings.

The current status and future results of the basic elements that sustain your business such as capital and budget use, production and product supply, sales channel and form, advertising type and marketing strategy can be calculated and predicted with ROI.

Calculation of the ROI;

ROI calculations are made by adding different items that can be determined according to the sector, investment type, product volume and periods. So there is more than one calculation formula. Since the basis of the formulas are investment, product cost and income items, in some cases they can be shaped according to needs. The most common ROI equation used because it produces more efficient results is as follows:

ROI = (Revenue - (cost of investment + cost of product)) / (cost of investment + cost of product)

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Latest Updates on Feb 25, 2022