How Do I Configure My Profit, ROI, and Margin Formulae?

🧭 What Are These Formulae For?

SellerLegend gives you full control over how Profit, ROI, and Margin are calculated.

• By default, each formula follows Amazon’s most common definition.

• However, every business may want to include or exclude certain cost elements.

• These formulae can be customised so that SellerLegend reports reflect your own accounting practices.

⚙️ Accessing Formula Settings

To configure formulae:

• From the Products And Inventory -> Products List menu OR
  from the Sales and Customers -> Orders menu
  click the ⚙️ gear icon at the top right.

• Scroll down in Product Settings.

• Under Profit Formula Settings, ROI Formula Settings, or Margin Formula Settings, click the corresponding Edit Formula button.

💵 Editing the Profit Formula

• The Profit formula defines how net profit is calculated:

• In the Edit Profit Formula popup, tick or untick which cost elements should be included:

  • FBA Fees & Commission

  • Promo Amount

  • Taxes

  • Cost of Goods

  • Shipment Cost

  • Miscellaneous Cost

  • PPC Cost

  • Operating Expenses

• As you pick and choose, you will see the formula dynamically change at the top of the screen under Cumulative Profit Formula.

• Example: If you exclude PPC Cost, then PPC spend will not reduce your profit figure.

📈 Editing the ROI Formula

• The ROI formula measures the return you make compared to your costs:

• Profit, the numerator, is calculated using the same tick boxes as above.

• Costs are defined separately—you choose which elements count as “cost” in the denominator.

• As you pick and choose, you will see the formula dynamically change at the top of the screen under Cumulative ROI Formula.

• Example: If you exclude Shipment Cost from Costs, ROI will look higher (since shipping is ignored).

📊 Editing the Margin Formula

• The Margin formula measures profitability as a percentage of revenue:

• In the Edit Margin Formula popup, you can:

  • Define Profit: select which cost items reduce revenue.

  • Define Revenue: select which items reduce gross sales.

• As you pick and choose, you will see the formula dynamically change at the top of the screen under Cumulative Margin Formula.

• Example: If you exclude Taxes from Revenue, then your margin percentage will appear larger.

🔍 Why ROI/Margin/Profit Can Differ Across Screens

Different screens aggregate different data over different scopes, so the same formula inputs don’t always apply. That’s by design.

📈 Sales Statistics (grouped by SKU/Product)

• We include product-based OOE only in the Profit/ROI/Margin calculations shown per product.

• We do not include account-level OOE per product row—otherwise those costs would be counted once per product (inflating total OOE).

• In tiles on the same screen, we can safely add account-level OOE once at the grand total level.

📦 Inventory / Products List

• These views don’t tie directly to a specific set of orders; they show an expected per-unit Profit/ROI/Margin for each product.

• Stats here are not date-range dependent (except VAT, which is evaluated as of today).

• The date range on the Inventory screen only affects inventory metrics (e.g., velocity, reorder date/qty), not the Profit/ROI/Margin figures.

📌 Tip: Wherever there is a ROI, Margin or Profit field, hover the mouse on the field value. This will give you a  breakdown of each individual component of the value.

🧮 Worked Example – Impact of PPC Costs

Imagine the following product metrics:

• • Revenue: $1,000

  • FBA Fees & Commission: $150

  • Cost of Goods: $400

  • Shipment Cost: $50

  • PPC Spend: $200

Case A: Excluding PPC Cost

• • Profit = $1,000 – (150 + 400 + 50) = $400

  • ROI = (400 ÷ (150 + 400 + 50)) × 100 = 66.7%

  • Margin = (400 ÷ 1,000) × 100 = 40%

Case B: Including PPC Cost

• • Profit = $1,000 – (150 + 400 + 50 + 200) = $200

  • ROI = (200 ÷ (150 + 400 + 50 + 200)) × 100 = 25%

  • Margin = (200 ÷ 1,000) × 100 = 20%

📌 Result: Including PPC costs halves both Profit and Margin, and drastically lowers ROI. This demonstrates why it’s critical to configure formulae according to the reality of your business.

🔄 Resetting to Default

• At any time, click Reset Formula to Default in the popup to return to the original SellerLegend settings.

• Defaults reflect the most standard definition for each formula, but may not match your accounting method.

💡 Tips & Best Practices

• ✅ Use Profit as your bottom-line indicator.

• ✅ Use ROI to judge efficiency of cost-heavy products.

• ✅ Use Margin to compare performance across products and categories.

• ⚠️ Be consistent: if you include/exclude a cost in one formula, make sure your accounting team interprets reports the same way.

• ✅Wherever there is a ROI, Margin or Profit field, hover the mouse on the field value. This will give you a  breakdown of each individual component of the value.