In the competitive world of eCommerce, understanding and optimizing Return on Investment (ROI) is essential for business success. ROI is a key metric that helps eCommerce stores evaluate how efficiently they are spending their marketing budgets and resources.
Generally, a good ROI is considered to be 200% to 300%, meaning for every $1 spent, you should be earning $2 to $3 in revenue.
This blog will guide you through the process of calculating eCommerce ROI, how to track it, and proven strategies to boost your store's profitability.
Plus, we’ll show you how tools like Skai Lama's suite of apps can help you optimize your store and maximize ROI.
What is eCommerce ROI?
Return on Investment (ROI) in eCommerce refers to the percentage of profit a business earns in relation to the amount spent on marketing, advertising, and other business investments.
Essentially, it helps you measure how effective your investments are in generating revenue.
Why is eCommerce ROI important?
By tracking your ROI, you can make data-driven decisions on where to allocate resources—whether that’s improving your website, running better ad campaigns, or enhancing your customer experience.
How to Calculate eCommerce ROI?
To calculate eCommerce ROI, you can use the formula:
ROI = ((Revenue – Investment) / Investment) × 100
Where:
Revenue is the total income generated from your campaign or initiative.
Investment is the total amount spent.
For example, if you spent $500 on a Facebook ad campaign and generated $1,500 in sales, then:
This means you earned a 200% return, or $2 in profit for every $1 spent. This percentage-based ROI formula is the standard for evaluating the performance of your eCommerce campaigns.
What is a Good ROI for eCommerce?
A good ROI for eCommerce typically ranges from 200% to 300%, meaning you should aim to generate at least $2 to $3 for every $1 spent on marketing and operational costs. However, this varies by industry, business model, and the stage of your business.
For instance, businesses that focus on customer retention and lifetime value (CLV) will have different ROI expectations compared to those heavily investing in customer acquisition.
Industry
Avg. ROI (%)
Notes
Fashion & Apparel
250% – 400%
High repeat purchases and strong brand loyalty.
Beauty & Personal Care
300% – 500%
Subscription potential and influencer marketing impact.
Health & Wellness
200% – 350%
Varying ROI based on product type (e.g., supplements vs. gear).
Consumer Electronics
150% – 300%
Higher AOV but high returns and support costs.
Home & Living
200% – 400%
Strong ROI with bundling and visual merchandising.
Food & Beverage (DTC)
150% – 250%
Subscription and upselling strategies improve margins.
Toys & Games
200% – 300%
Holiday spikes and gifting influence returns.
Books & Media
100% – 200%
Lower margins; SEO and volume are key to ROI.
Pet Products
250% – 400%
High loyalty and recurring purchase behavior.
Jewelry & Accessories
300% – 600%
High margins and strong emotional purchasing drivers.
Factors That Impact eCommerce ROI
Several factors contribute to eCommerce ROI, and improving these areas can significantly boost your returns:
SEO (Search Engine Optimization) Optimizing your eCommerce website to appear higher in search engine results can drastically increase organic traffic. Use apps like Skai Lama's Kite, which offers customizable discount offers and promotions that can improve customer retention and boost ROI.
Conversion Rate Optimization (CRO) Ensuring that your visitors turn into paying customers is crucial. Testing your checkout process, simplifying the user experience, and ensuring mobile optimization can help. Skai Lama’s Checkout Wizard helps streamline checkout experiences, reduce friction, and improve conversion rates.
Customer Experience and Retention A seamless, positive experience for customers increases their lifetime value (CLV) and improves ROI. Implementing Skai Lama's Giftkart can help you manage store credits and gift card campaigns, providing personalized experiences and encouraging repeat purchases.
Strategies to Boost eCommerce ROI
Here are some proven strategies that can increase your eCommerce ROI:
Increase Average Order Value (AOV):
Offer product bundles using Skai Lama's Easy Bundles to encourage customers to purchase more.
Reduce Customer Acquisition Cost (CAC):
Focus on optimizing paid advertising with better targeting and use content marketing to attract organic traffic.
Improve Conversion Rates:
Use tools like Skai Lama’s Fly Bundles, which offers bundle recommendations to increase the number of items purchased per transaction.
Focus on Customer Retention:
Loyal customers are worth more over time. Use loyalty programs or Skai Lama’s GiftLab for personalized gifting experiences that encourage repeat purchases.
Optimize Your Checkout Process:
A smoother checkout can reduce cart abandonment. Skai Lama’s Checkout Wizard can help improve this experience.
Tools for Tracking eCommerce ROI
Accurately tracking ROI is critical for making data-driven decisions in your eCommerce business. Here are five powerful tools that help you monitor ROI across marketing, sales, and customer behavior:
1. Google Analytics 4 (GA4)
Google Analytics provides deep insights into user behavior, traffic sources, and conversion events—helping you assess how well your campaigns are performing in terms of ROI.
Best for: Tracking traffic sources, sales funnels, and attribution
Supermetrics pulls marketing data from multiple platforms (Google Ads, Meta, Klaviyo) into spreadsheets or dashboards, helping you calculate ROI per channel.
Best for: Custom ROI reporting in Google Sheets or Looker Studio
From improving AOV with Easy Bundles to tracking gift card performance with Giftkart, Skai Lama apps provide actionable data within your store to measure performance and boost ROI.
Best for: Shopify merchants optimizing product sales, bundling, gifting, and checkout experiences
Optimizing eCommerce ROI is essential for long-term success in any online business. By understanding how to calculate ROI and implementing strategies to improve it, you can make more informed decisions, reduce costs, and increase profitability.
Tools like Skai Lama's suite of apps can help you optimize every part of your business, from customer acquisition to checkout optimization.
Hurrify customers to buy within a given timeframe with a sales countdown timer & improve conversions
Another popular Shopify checkout app is Checkout Promotions. The app comes with the ability to leverage a collection of highly robust visibility rules that help show customers one-click post purchase upsell promotions after an order payment has been made. Some of its key features include:
Features
AI recommended and manual recommendations for upselling.
Complete branding control.
Checkout Upsell for increasing AOV.
AI recommended and manual recommendations for upselling.
Pricing
Development
Free
Monthly Plan
$99/ month
Plus Plan
$99/ month
Plus Plan
$99/ month
FAQ on eCommerce ROI
What is ROI in eCommerce?
How do you calculate ROI for eCommerce?
What is a good ROI for eCommerce?
How can I improve my eCommerce ROI?
How does customer retention affect ROI?
Which metrics should I track for eCommerce ROI?
×
Sid B
Sid is the founder of Skai Lama and The Indian Dream Podcast. He is passionate about building SaaS and talks about eCommerce Growth, 0-1 Startups, Building Businesses and Brands, and Shopify.
Boost Loyalty with Tiered CashBack!
Boost your e-commerce with GiftKart! Branded gift cards, loyalty campaigns, cashback, and more.
Skyrocket Your Sales with Checkout Wiz: Unlock 10+ Conversion Boosting Features!
Skyrocket Your Sales with Checkout Wiz: Unlock 10+ Conversion Boosting Features!
Transform your checkout with Checkout Wiz: Enjoy custom content blocks, upsell widgets, surveys, and full branding control for maximum conversions and revenue.
Transform your checkout with Checkout Wiz: Enjoy custom content blocks, upsell widgets, surveys, and full branding control for maximum conversions and revenue.
.svg)
.jpg)
.svg)
.svg)
