The ROI (Return On Investment) is a key factor in deciding if a deal is a good deal or not. It is calculated in percentage form to represent the proportion of the investment into a product that is profit.
Sellers often have a benchmark number in mind when assessing the ROI when analysing.
In BuyBotPro it is a highlighted piece of data in the Details section and appears in the BuyBotPro Island.
The key part to get right, with regards the ROI, is how BuyBotPro calculates it as this will have a direct impact on the result that is delivered.
BuyBotPro offers 6 set methods to calculate this that take into account these Cost Of Goods (COG):
Product Cost – Buy Price entered in BuyBotPro
Shipping – to Amazon or MF costs
Prep Fee – i.e. if a prep centre is used
Bundle Fee – additional packaging costs
Extra Fees
VAT (if applicable)
Amazon Fees
These represent the common costs associated with selling through Online Arbitrage that will impact the profitability and, as a result, the ROI.
The six methods consider a mixture of combinations of these methods, one or more of which will fit with the requirements of any seller.
Method 1, which is the default method, is the most rudimental calculation - effectively the Gross Profit method. It takes the profit and uses just the product cost to calculate the ROI.
It’s worth remembering that using this method doesn’t account for any of the other costs that may be incurred when calculating ROI. This means it won’t be a less accurate guide to how a product will impact the overall business profit than the other methods.
Method 2 includes some of the costs above, but only the ones that are manually entered into the BuyBotPro Settings; product cost (the Buy Price), shipping, prep and bundle fees, extra fees and VAT, if applicable.
Method 3 is the first one that includes some of the Amazon fees that BuyBotPro calculate.
Method 4 is the choice we recommend for most UK sellers and includes all Amazon fees. It is the most accurate in terms of the overall impact the costs will have on the profit and ROI, making it as close to the bottom line profit of a UK seller’s business.
Method 5 is the best option for US sellers. It replicates Method 4 except it excludes VAT.
The final method, Method 6, accounts for everything that has been included in the Settings and all Amazon costs.
Most sellers will choose Method 4 or 5. They align the most with how businesses operate – accounting for all the costs they incur.
It is important to make sure all the relevant costs are accurately entered in the Basic section of the BuyBotPro Settings. Click on the cog icon on the top right of the BuyBotPro panel to quickly set up the ROI Calculations.