Free Calculators

Inventory Margin Calculator

Judge a whole batch before you buy it: investment, expected profit, margin, ROI and the cash left sitting in unsold stock.

Your numbers

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Total expected fees across the units you sell.
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Your Results
Net profit-
Inventory investment-
Potential revenue (all units sold)-
Expected revenue-
Gross profit-
Expected total cost-
Profit margin-
Return on investment (ROI)-
Unsold inventory value-

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How is this calculated?

A batch is judged on the full cycle: what you pay for all units plus batch costs, against the revenue from the units you realistically sell.

Inventory Investment = Units Purchased x Cost Per Unit
Gross Profit = Revenue From Units Sold - Cost Of Units Sold
Net Profit = Revenue - (Investment + Freight + Advertising + Fees + Other)
ROI = Net Profit / Expected Total Cost x 100
Unsold Inventory Value = Unsold Units x Cost Per Unit

Worked Example

Units purchased: 100 at $12 each. Selling price: $30. Expected units sold: 80. Freight: $150. Advertising: $200. Fees: $90. Other: $25.

Investment = 100 x $12 = $1,200. Revenue = 80 x $30 = $2,400. Gross profit = $2,400 - (80 x $12) = $1,440.

Total cost = $1,200 + $150 + $200 + $90 + $25 = $1,665. Net profit = $2,400 - $1,665 = $735. Margin = 30.6%. ROI = 44.1%. The 20 unsold units hold $240 of value.

How to Calculate Inventory Margin

Think in batches, not single units. Multiply units purchased by the cost per unit for your investment. Multiply the units you realistically expect to sell, not hope to sell, by the price for expected revenue. Then subtract the whole batch cost: the inventory itself plus freight, advertising, marketplace fees and other batch expenses.

Notice that unsold units are a real cost in this view: their purchase price went out even if the revenue never came in. That is the difference between this calculator and a per-sale profit check, and it is why resellers who ignore sell-through overestimate their profits.

Why Inventory Margin Matters

Inventory is frozen cash. A batch with a great per-unit margin but a 50 percent sell-through can return less than a modest margin batch that sells out, and the unsold remainder keeps your money locked while trends move on. ROI and unsold value, shown next to margin here, are the numbers that keep buying decisions honest.

Use the calculator before reordering, not after: it turns "this product sells well" into a testable claim with your real freight, ad and fee numbers. For single-sale economics once the batch is selling, use the Profit Calculator.

How to Improve Your Numbers

Improve batch results by buying closer to proven demand (smaller first batches), negotiating per-unit cost or freight, pricing to move the last units rather than discounting the first ones, and counting fees honestly. If a batch only works at 100 percent sell-through, it probably does not work; lower the expected units sold field until the plan still survives, then decide.

Frequently Asked Questions

What sell-through should I expect?

It varies by product and channel. A first batch of an untested product deserves a cautious estimate; a reorder of a proven seller can be higher. When in doubt, run the calculation at a pessimistic and an optimistic sell-through and see if the batch survives the pessimistic one.

Why is unsold inventory counted against profit?

Because you paid for it. The unsold value line shows what is still recoverable if the units eventually sell or are liquidated, but until then the cash is spent, so honest batch accounting charges it against this batch.

What is the difference between margin and ROI here?

Margin is net profit as a share of revenue. ROI is net profit as a share of everything the batch cost you. ROI answers the investor's question: for each dollar this batch consumed, how many cents came back as profit?

Should marketplace fees be per unit or for the batch?

Enter the total you expect across the units you sell, since fees usually scale with sales. If a fee is a flat listing cost for the whole batch, it belongs here too.

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