Know ROI across your actual inventory.
The full Reseller Desk ties item cost, sale price, fees, returns and expenses together instead of making you recalculate every sale by hand.
See the full Reseller Desk — $79What does ROI mean for a reseller?
ROI compares the profit you make with the money you originally tied up in the item. If you spend $10 on an item and keep $20 of profit after the sale costs, the return on that item cost is 200%. That is different from profit margin, which compares profit with the final sale price.
ROI can be useful when you are choosing between sourcing opportunities because it shows how efficiently your inventory dollars are working. A high ROI does not automatically make an item a great buy, though. Time matters too. An item that returns 100% in one week may be more useful to your cash flow than an item that returns 200% after sitting for a year.
Use ROI together with estimated net profit, margin, expected selling time and the amount of storage or handling an item requires. The best sourcing decisions usually balance several of those factors instead of chasing one percentage by itself.
ROI is most useful when you compare similar sourcing choices using the same assumptions. Include all item-level costs you know about, not just the sticker price at the thrift store or liquidation source. Cleaning, repairs, replacement parts and sale-specific supplies can reduce the true return, especially on lower-priced inventory where small costs make a larger percentage difference.