What is classified as "income"?
Posted: Thu Feb 20, 2025 3:54 am
Revenue is everything the company collects from sales. When calculating ROI for a specific area or campaign, remember to only use the amount collected by the chosen segment.
For example, to calculate the return on investment for an ecommerce platform in its Email Marketing campaigns , the revenue value should represent only the sales of that channel and not that of the store as a whole.
What are "costs"?
Costs are all those expenses necessary to make the investment viable .
In the case of the previous example, of the ecommerce platform , the costs are represented by the amount paid to use the platform, the price of hosting the website , investments in paid ads, expenses with Internet, telephone and everything that is necessary.
How to evaluate the results of your business?
To better explain this metric, let's analyze the fictional case of the virtual store mentioned above.
Suppose the company as a whole received $14,000 in sales and $5,000 came in through the online store.
To keep the site running, it is necessary to spend US$1,000, while the physical store needs US$3,000.
In this case, the ROI of our e-commerce would be:
ROI = [(5,000 - 1,000) / 1,000] x 100
ROI = (4,000 / 1,000) x 100
ROI = 400%
In other words, the return obtained is 400%, that is, for every US$ 1 invested, you will receive US$ 4.00 in profits.
Meanwhile, the ROI of the physical store would be:
ROI = [(9,000 - 3,000) / 3,000] x 100
ROI = (6,000 / 3,000) x 100
ROI = 200%
It is worth remembering that the final result can vary netherlands mobile database greatly. It all depends on the action taken, the quality of planning, execution, among other details.
The important thing is that with the ROI in hand, it is possible to analyze:
What was done (or not done) that could have influenced this outcome?
Is there a relationship between high-yield investments?
What is it about high ROI shares that can be replicated elsewhere?
Are my campaigns performing similarly to my competitors?
Does your company have better results than others in the sector?
In the previous example, the result was positive, but it can also be negative.
In these cases, this means that the investment caused the company to lose money. While this is not good news, this information allows the company to investigate the problem and make necessary changes.
For example, to calculate the return on investment for an ecommerce platform in its Email Marketing campaigns , the revenue value should represent only the sales of that channel and not that of the store as a whole.
What are "costs"?
Costs are all those expenses necessary to make the investment viable .
In the case of the previous example, of the ecommerce platform , the costs are represented by the amount paid to use the platform, the price of hosting the website , investments in paid ads, expenses with Internet, telephone and everything that is necessary.
How to evaluate the results of your business?
To better explain this metric, let's analyze the fictional case of the virtual store mentioned above.
Suppose the company as a whole received $14,000 in sales and $5,000 came in through the online store.
To keep the site running, it is necessary to spend US$1,000, while the physical store needs US$3,000.
In this case, the ROI of our e-commerce would be:
ROI = [(5,000 - 1,000) / 1,000] x 100
ROI = (4,000 / 1,000) x 100
ROI = 400%
In other words, the return obtained is 400%, that is, for every US$ 1 invested, you will receive US$ 4.00 in profits.
Meanwhile, the ROI of the physical store would be:
ROI = [(9,000 - 3,000) / 3,000] x 100
ROI = (6,000 / 3,000) x 100
ROI = 200%
It is worth remembering that the final result can vary netherlands mobile database greatly. It all depends on the action taken, the quality of planning, execution, among other details.
The important thing is that with the ROI in hand, it is possible to analyze:
What was done (or not done) that could have influenced this outcome?
Is there a relationship between high-yield investments?
What is it about high ROI shares that can be replicated elsewhere?
Are my campaigns performing similarly to my competitors?
Does your company have better results than others in the sector?
In the previous example, the result was positive, but it can also be negative.
In these cases, this means that the investment caused the company to lose money. While this is not good news, this information allows the company to investigate the problem and make necessary changes.