Gross margin return on inventory investment. The GMROI Calculator takes gross margin for the year, average inventory at cost and returns gmroi plus as a percentage. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Online and retail margins are decided by the costs that are easy to forget: fees, shipping, returns, storage and advertising. Fill in every line, even with an estimate, before deciding what to sell and at what price. Use the worked example below to check the maths against your own figures.
How the GMROI Calculator works
Gross margin return on inventory investment shows how many units of gross profit each unit invested in stock earns per year. Above 3 is healthy for most retailers.
Worked example
With the example values (gross margin for the year of $400,000, average inventory at cost of $100,000), the gmroi is 4.00x; as a percentage 400%. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
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Frequently Asked Questions
How is gmroi calculated?
GMROI = gross margin ÷ average inventory cost.
Which figures do I need?
Gross margin for the year, average inventory at cost. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Which fees should I include?
Every fee your platform or provider charges on a sale: commissions, payment processing, fulfilment, storage, advertising and the expected cost of returns. Fee schedules change, so check the current rate card.
