ROIReturn on Investment
ROI is profit (revenue minus cost) divided by cost. Unlike ROAS, ROI accounts for COGS, fulfillment and overhead.
ROI = (Revenue − Total Cost) / Total CostWhat does ROI actually mean?
Return on Investment (ROI) is a profitability metric that nets revenue against all associated costs, including COGS, fulfillment, returns and ad spend. A 100% ROI means you doubled your investment after costs.
ROI is the more honest metric for evaluating whether a campaign was profitable. ROAS measures top-line attribution; ROI measures actual contribution after costs. The two can diverge significantly: a 4× ROAS campaign with 25% gross margin nets close to break-even on a ROI basis once fulfillment and ad costs are subtracted.
Because ad platforms don't see your cost data, they report ROAS rather than ROI. Most performance teams compute ROI inside their finance or BI stack using ad spend pulled from platforms and revenue/cost data from Shopify or NetSuite.
Example
A campaign generated $10,000 revenue. Total costs (ad spend + COGS + fulfillment) were $7,500. ROI = ($10K − $7.5K) / $7.5K = 33%.
When it matters
Use ROI for board reports and profitability analysis; use ROAS for campaign-level optimization. The two measure different things.
Related terms
ROAS
ROAS measures revenue generated for every dollar of ad spend. A 4× ROAS means $4 in revenue for each $1 spent.
CAC
CAC is the total cost of acquiring one new paying customer, including ads, salaries and tooling. It's broader than CPA.
LTV
LTV is the total revenue or profit a single customer generates over their entire relationship with the business.
AOV
AOV is the average revenue per order. Increasing AOV is one of three core levers for ecommerce growth (alongside traffic and conversion rate).
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