This report shows your inventory Gross Margin Return on Investment (GMROI). In other words, it shows how much profit you made on each dollar you invested in inventory.

Compare your GMROI against your industry standard to get a more accurate view into your store's health. Use GMROI as a guide when purchasing to ensure you are getting maximum profit from your inventory investments.

  • Role

    Store Owner/Inventory Manager

  • Job

    Purchasing, Planning

  • Recommended Use


Benefits to You:

Better understand your store’s profitability and health
  • Products in your store may be generating a lot of sales, but not actually making you money because of their margin or how much stock you were left holding. By measuring GMROI you gain accurate number on your inventory profitability.
Make your money work for you
  • By comparing the GMROI of your categories, vendors, and manufacturers, you can make sure you are investing in products that bring back a profit. In this way, you can know your inventory is actively generating cash for future purchases.
Negotiate with your vendors
  • Use the GMROI by Default Vendor variation to strengthen your negotiations with vendors. Instead of just talking about margin, talk about the full picture with GMROI and drive for better terms.
Be able to invest in other areas of your store beyond inventory
  • By stocking what you know to be profitable, and planning your purchasing to get a better return on this investment, you will have more money available to invest in other areas of your store—like marketing, employees, or that break room grill you’ve been eyeing.

How it's calculated:

  • By default, the report is organized by top level category.
  • We display the category's description and its GMROI for the last 365 days.
  • GMROI is calculated using sales profit divided by average inventory cost for the year.
  • To calculate the average cost for the year we take the average quantity on hand for each item and multiply it by the current average cost.

Available Variations:

By Default Vendor
  • Shows the GMROI for the last 365 days, organized by Vendor instead of Top Level Category.
By Manufacturer
  • Shows the GMROI for the last 365 days, organized by Manufacturer instead of Top Level Category.
by Shop
  • For multi-shop owners: shows the GMROI for your stores compared against each other.
By Vendor and Category
  • See the GMROI by vendor and category combined, along with a visualization showing the GMROI for the ten vendor/categories that hold the most cost in your store.

Next Steps:

  • Evaluate your buying strategy and see if any changes in timing or stock need to take place.
  • Re-merchandise your store to increase the GMROI of underperforming (and perhaps underseen) stock
  • Compare your shop's GMROI against your industry average, to better evaluate how your inventory and business is performing.