Gross Margin Return On Investment (GMROI)
Gross Margin Return On Investment (GMROI) is the measurement of the profitability of an item. If the GMROI for an item is too low you may not have it priced too low or you are stocking too many units. Similarly, you may have both problems. The GMROI calculation will allow you to run various “what if” scenarios whereby you can change attributes util you get a favorable GMROI and you will then know what to do to make the item profitable.