Example of return on investment taking into account cost price

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subornaakter20
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Joined: Mon Dec 23, 2024 3:52 am

Example of return on investment taking into account cost price

Post by subornaakter20 »

In the previous example, when calculating the profit ratio, we did not take into account the cost of production (if you read carefully, you should have noticed this). Now we will make professional ROMI calculations, that is, we will take into account the costs associated with the production of products. This formula looks like this:

ROMI = (Gross Profit - Marketing Investment) / Marketing Investment

Naturally, to better grasp some of the loadrunner protocol list subtleties, it is better to consider a more or less specific example. As usual, we will use a legend: we are manufacturers of inflatable boats.

We sell the product at a price of 250,000 rubles.

The cost price of a single unit of goods is 100,000 rubles.

We spent 15,000 rubles on placing an advertisement in a thematic magazine.

2 orders were received, resulting in 2 boats being sold (the magazine turned out to be very good!).

Let's start by calculating the "gross" profit from the boats sold:

Gross profit = gross revenue - cost of goods sold

Gross profit = 2 x 250,000 rubles – 2 x 100,000 rubles.

Thus, the gross profit is 300,000 rubles.

Now, let's find out how to calculate roi:

ROI = (Gross Profit - Marketing Investment) / Marketing Investment

ROI = (300,000 - 15,000) / 15,000 = 19 x 100% = 1900%

We get a very decent result: every ruble spent on advertising brought 19 rubles of net profit.

Our example shows how important it is to choose the right advertising channel. Finding such a thematic magazine is a huge stroke of luck. In this case, saving on the advertising budget is unwise, it needs to be increased.


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How to Calculate ROI Online in 10 Seconds
Now we will talk about how to calculate ROI using the calculation functions built into analytics systems. Unfortunately, neither Yandex.Metrica nor Google Analytics can offer such solutions. It is better if you use, for example, the "End-to-end analytics system" and "CRM systems". These systems are able to perform all calculations independently (you only need to enter sales data).

For those who love maximum simplicity and prefer Excel, we can offer services that can help you get results in 2-3 clicks.

How to Calculate ROI Online in 10 Seconds

Event Farm
Using this service, you can evaluate the work of the exhibition by comparing expenses with the number of sales and new contacts received as a result of the work.

How to Calculate ROI_Event Farm

A huge plus: an additional sheet is offered, on which a comparative table is placed: exhibitions – other advertising channels. Using this data allows you to choose the most effective direction for further promotion.
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