Return on Investment (ROI) is a metric that measures the profit you make from your investments and the efficiency of several investments to determine which is the most efficient.
ROI is calculated by subtracting the cost of the investment from the revenue generated by the investment and dividing that by the investment cost. The resulting figure represents the percentage return on the investment.
A positive ROI indicates the investment has generated a profit, while a negative ROI indicates a loss. eCommerce businesses use ROI to assess their marketing efforts’ effectiveness and make data-driven decisions about future investments.