What does e-commerce roi mean?

roi refers to the value that should be returned through investment, that is, the economic return that an enterprise obtains from an investment activity. In layman’s terms, it is the ratio of the income we obtain and the investment cost; in the e-commerce link , we believe that ROI is equal to the seller's investment-output ratio.

The operating environment of this article: Windows 7 system, Dell G3 computer.

1. What does roi mean?

ROI (Return On Investment) refers to the value that should be returned through investment, that is, what an enterprise obtains from an investment activity Economic return, in layman's terms, is the ratio of the income we obtain to the cost of investment. In terms of e-commerce, we believe that ROI is equal to the seller’s investment-output ratio.

2. What is the formula for calculating roi?

Return on investment (ROI) = annual profit or average annual profit / total investment × 100%. As can be seen from the formula, the ROI calculation formula is equal to income / investment × 100%, or ROI = ( cost reduction revenue growth) / total cost. The result of ROI is usually expressed as a percentage, that is, the input-output ratio. Simply put, it is the degree of return on the funds invested by the company.

The following is the formula and split

3. What is the formula for calculating e-commerce ROI?

According to the calculation formula ROl = profit/investment x 100%, we can get: ROl of e-commerce = expenditure/sales amount.

For example: a piece of clothing is promoted through the platform, and the results of the backend statistics for one week are as follows: the promotion cost is 100 yuan, and the turnover is 200 yuan. So this week it is 1:2.

The sales amount of e-commerce = clicks * conversion rate * customer unit price, and cost = clicks * average click cost.

So in the end we can also calculate: e-commerce ROI = customer unit price * conversion rate / average click cost.

4. What is the general ROI of e-commerce?

Let’s take an example. Today you spent 1,000 on advertising and sold for 2,000 yuan, that’s 1:2 , then does 1:2 make money? Note that the investment here mainly refers to advertising investment, and does not include the cost of your product, as well as miscellaneous expenses such as express delivery fees.

Of course, if your cost is low enough, you won’t lose money. For example, if you sell 100 pairs of shoes, you can make an order with an advertising fee of 50 yuan, but the cost may only be 20 yuan per order. For 100 pairs that day, you The sales revenue is 10,000 yuan, your advertising fee is 5,000 yuan, your cost is 2,000 yuan, plus express delivery, the total is 1,000 yuan, plus other things, you still make money.

So ROI also needs to include various costs and the profit margin of your product. Usually, it needs to be at least 2.5 to break even. So in general, it is better to achieve at least 1:3.

5. What are the methods to improve ROI

1. Optimization of delivery time

First of all, we should conduct a detailed analysis of specific categories. Analyze the peak period of transactions, or optimize the time of discounts by time period based on the high conversion time period of the main transaction words.

According to big data analysis, the conversion rate is higher at 3 pm and 7 to 10 pm, then we can increase the time-sharing discount during these two time periods and reduce the time-sharing discount during other time periods. Or simply close it without delivery.

2. Distribution area optimization

From most categories, in terms of distribution area, we can analyze the data from the accumulated regional data and traffic analysis of the main transaction words, and then draw conclusions. , find out areas with high conversion and high ROI, and then launch them.

3. Set different premium ratios

The so-called premium ratio can be understood as our authorization to bid on the platform. For example, when the keyword bid is set to 2 yuan, it can be ranked in the main search on the first page. If we set the bid to 1 yuan, the ad slot will be ranked very low because the bid is low. Then sellers can achieve the purpose of targeted promotion by setting different premium ratios (100%-400%) for different groups of people, which will relatively filter out inaccurate traffic.

4. Search crowd

Search crowd is the most efficient and direct way to improve e-commerce ROI, because among the people who search, the click-through rate, transaction rate, and conversion rate are generally relatively high. By labeling people with high ROI at a high premium and labeling people with low ROI at a low or even no premium, we can increase the ROI of our stores.

5. Choose a good delivery platform

When e-commerce companies are promoting, the delivery platform they choose should try to choose channels with better conversions. Because as we all know, choosing a good delivery platform is an efficient way to improve ROI. When you find that its conversion rate and ROI are obviously low, you should close the channel and leave other platforms with high conversion and ROI.

6. Improve the website arrival rate

The main reason for the low arrival rate is that some website servers have low bandwidth and small row memory, which results in slow opening speed. Some websites will also have BUG and the page cannot be opened. Open and wait. At the current level, under normal circumstances, a website is considered unqualified if its arrival rate does not reach more than 95%. Therefore, it is important to pay attention to the opening status of the website from time to time.

7. Cooperate with a drop shipping platform

As the saying goes, leaning against a big tree is a good way to enjoy the shade. Likewise, cooperating with a trustworthy and reliable drop shipping platform can not only save costs and time. You can also expand your business scope, thereby increasing ROI and profits.

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