GMROI Calculator
Gross margin return on inventory investment.
GMROI
2.00
$2.00 of gross margin per $1.00 of stock
Most retail targets 2.0-3.0. A high-margin slow mover and a low-margin fast mover can score identically, which is exactly the comparison this is for.
How the GMROI Calculator works
GMROI answers the question margin and turnover each answer only half of: for every pound tied up in stock, how much gross profit comes back? A high-margin product that never sells and a low-margin product that flies can produce the same answer, which is exactly the comparison buyers need.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
How is GMROI calculated?
Gross margin ÷ average inventory at cost. Equivalently, gross margin percentage × inventory turnover. £60,000 of gross margin on £30,000 of average inventory gives a GMROI of 2.0.
What is a good GMROI?
Above 1.0 means the stock returns more gross margin than it costs to hold at cost. Most retail targets 2.0-3.0. Grocery runs lower with very high turns; jewellery runs higher on thin turns and fat margins.
Why is GMROI better than margin alone?
Because margin ignores how long capital is trapped. A 70% margin item turning once a year returns less on the same investment than a 30% margin item turning six times. GMROI captures both in one number.
How do I improve GMROI?
Raise margin, raise turnover, or reduce average stock. Cutting excess inventory on lines that already sell well is usually the fastest route, because it improves the denominator without touching demand.