[et_pb_section fb_built=”1″ fullwidth=”on” _builder_version=”4.16″ background_color=”rgba(0,0,0,0.29)” global_colors_info=”{}”][et_pb_fullwidth_post_title meta=”off” featured_placement=”background” _builder_version=”4.27.4″ title_font=”|700||on|||||” title_text_color=”#ffffff” title_font_size=”30px” background_color=”rgba(0,0,0,0.15)” background_image=”https:\/\/paladinpointofsale.com\/retailscience\/wp-content\/uploads\/sites\/2\/2020\/11\/RS-BackOffice2Web.jpg” background_blend=”color” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ text_orientation=”center” custom_padding=”15%||15%” z_index_tablet=”0″ title_text_shadow_horizontal_length_tablet=”0px” title_text_shadow_vertical_length_tablet=”0px” title_text_shadow_blur_strength_tablet=”1px” meta_text_shadow_horizontal_length_tablet=”0px” meta_text_shadow_vertical_length_tablet=”0px” meta_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” text_shadow_style=”preset5″ parallax_effect=”on” module_bg_color=”rgba(255,255,255,0)” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”][\/et_pb_fullwidth_post_title][\/et_pb_section][et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”4.16″ global_colors_info=”{}”][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”0px|0px|18.95px|0px|false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Intro” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n
Published: June 18, 2017<\/p>\n
Updated: April 24, 2026<\/p>\n
For retailers, inventory is more than products\u00a0on a\u00a0shelf.\u00a0It\u00a0is\u00a0capital\u00a0tied\u00a0up with the expectation of a return.\u00a0Retailers who thrive treat inventory much like a stock portfolio: buying strategically, managing risk, and focusing on profitability. Gross Margin Return on Investment (GMROI) is the metric that tells you whether that strategy is paying off.<\/span>\u00a0<\/span><\/p>\n Originally derived from the return-on-investment model developed by Donaldson Brown in the early 1900s, GMROI has become one of the most trusted measures of retail performance. In fact, the North American Hardware and Paint Association (NHPA) identifies it as a key indicator of long-term profitability. By understanding your GMROI \u2013 across your store, departments, or individual products \u2013 you gain the insight needed to make smarter inventory decisions and drive stronger financial results.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”How to Calculate GMROI ” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n Dividing gross profit by inventory investment and multiplying the result by 100 gives you the GMROI on a specific item. The calculation can be made simply from information pulled from your sales and inventory data, and it tells you if the products you buy are making money.<\/span>\u00a0<\/span><\/p>\n Gross Profit Dollars \u00f7\u202fInventory Investment\u202f\u00d7\u202f100\u202f=\u202fGMROI<\/b>\u00a0<\/span><\/p>\n How does the GMROI calculation work?\u00a0Say a hardware store buys an electric drill for $50 and sells the product for $150. The gross profit on the item is $100. Because of variables such as discounts, shipping costs and taxes, the inventory\u2019s median value throughout the year is $75.<\/span>\u00a0<\/span> An inventory\u2019s monthly median value, also known as average inventory, is an item\u2019s\u00a0price\u00a0minus discounts, plus freight and taxes. It is\u00a0determined\u00a0by adding the beginning cost of inventory for each month to the ending cost inventory for the previous month and dividing by 2.<\/span>\u00a0<\/span> The GMROI for this drill is $150 divided by $75, or 2.00. Multiply that by 100 and it means the store is getting a 200% return on its investment. If items are being sold with a GMROI value of greater than 100%, the store is making a profit. However,\u00a0it\u2019s\u00a0typical to see a well-run store with a GMROI over 300%.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” locked=”off”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_cta title=”Try our GMROI Calculator!” button_url=”https:\/\/paladinpointofsale.com\/retailscience\/gmroi-calculator\/” button_text=”Use the Calculator” _builder_version=”4.16″ hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]Let our interactive calculator do the work for you! Even the most disciplined inventory managers end up with slow movers. Maybe\u00a0a purchase\u00a0was a little too aggressive.\u00a0Maybe demand\u00a0softened for a once-reliable SKU.\u00a0Maybe the\u00a0weather\u00a0didn\u2019t\u00a0cooperate with\u00a0a seasonal\u00a0category. In a hardware store with thousands of products,\u00a0identifying\u00a0those situations quickly\u00a0isn\u2019t\u00a0easy\u2014but ignoring them is costly.<\/span>\u00a0<\/span><\/p>\n Every item that sits on a shelf\u00a0represents\u00a0cash that\u00a0can\u2019t\u00a0be used elsewhere. That trapped capital limits your ability to bring in new, better\u2011performing inventory.\u00a0Ultimately, retail\u00a0success comes down to one fundamental principle: having the right products available at the right\u00a0time,\u00a0so sales are both consistent and productive. With inventory often\u00a0representing\u00a0as much as 80% of a store\u2019s total assets, understanding your Gross Margin Return on Investment (GMROI) is essential to managing that investment wisely.<\/span>\u00a0<\/span><\/p>\n GMROI shines a light on how effectively each dollar invested in inventory is working for your business. It also exposes a common trap \u2013 buying in bulk simply to secure a lower unit cost. While suppliers\u00a0frequently\u00a0reward larger orders with better pricing, those savings disappear if the product\u00a0doesn\u2019t\u00a0sell through in a normal buying cycle.<\/span>\u00a0<\/span><\/p>\n When excess merchandise lingers in inventory, the cash tied up in those items erodes overall returns. In many cases,\u00a0purchasing\u00a0fewer units at a slightly higher cost, but turning them faster, produces a higher GMROI and stronger cash flow. Evaluating GMROI at different price points helps retailers make smarter buying decisions, rather than defaulting to volume-based purchasing.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_testimonial author=”Dan Nesmith” job_title=”Founder\/President” company_name=”Paladin Data Corporation” quote_icon_color=”#cc6633″ quote_icon_background_color=”#FFFFFF” disabled_on=”off|off|off” _builder_version=”4.27.5″ _module_preset=”default” body_text_align=”center” body_text_color=”#FFFFFF” author_text_align=”center” author_text_color=”#FFFFFF” position_text_color=”#FFFFFF” company_text_color=”#FFFFFF” background_color=”#3e5062″ text_orientation=”center” background_layout=”dark” global_colors_info=”{}”]One of the most devastating factors against GMROI is\u00a0<\/span>overstock<\/span>. Overstock kills a store\u2019s gross margin return on investment<\/span>. GMROI on overstock is zero. Stock depth should be enough to meet expected demand for two to four order cycles and nothing more.<\/span> [\/et_pb_testimonial][et_pb_text admin_label=”By using GMROI as a guide” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n By using GMROI as a guide, hardware retailers can align inventory levels with actual demand, reduce excess stock, and ensure every dollar invested is contributing to real, measurable profit.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Case in point ” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n To illustrate the impact of order quantity on GMROI, consider an item that typically requires a $48 investment due to high order minimums, and how paying a slightly higher purchase price\u00a0<\/span>results<\/span>\u00a0in a higher GMROI.<\/span><\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”GMROI chart” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n [\/et_pb_text][et_pb_text admin_label=”Supplier 1 requires” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n Supplier 1 requires a minimum order of 24 units at $2.00 each. Supplier 2 has no\u00a0minimum and\u00a0sells the same unit for $2.35 each. Supplier 3 requires a minimum order of 6 and a purchase price of $2.15 per unit.<\/span>\u00a0<\/span><\/p>\n Paying a\u00a0higher purchase\u00a0price more\u00a0than doubled GMROI when using Supplier 2 or Supplier 3. Yes, the profit (in dollars) was lower. However, we have $33.90\u00a0to\u00a0$35.10 left to invest in other products\u00a0in the two scenarios with higher purchase costs and lower order minimums. If we invest those dollars in another item that meets our required 300% GMROI, the profit dollars are recouped.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Departmental impact ” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n While the GMROI calculation can be used to measure the profitability of a single item, a department or an entire store, the Retail Owners Institute, a self-help financial management resource for retailers, says the use of GMROI to compare the productivity of different departments within a store is probably its most valuable use.<\/span>\u00a0<\/span><\/p>\n For instance, in the example below, a department with low annual sales, low annual gross margins, and low average inventory costs but a high turn rate (Department D), could be as valuable to a retailer as a department with high annual sales, a higher gross margin, and higher average inventory costs, but a low turn rate (Department A). Comparing those two\u00a0departments,\u00a0GMROI allows retailers to see how each one contributes to the success of a business. The same comparisons can be made on individual products or entire businesses.<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”GMROI Departments Chart” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n Source: The Retail Owners Institute<\/em> [\/et_pb_text][et_pb_text admin_label=”For the past 100 years” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n For the past 100 years, the N<\/span>HP<\/span>A\u2019s Cost of Doing Business Study has analyzed the sales data of hardware stores, home\u00a0<\/span>centers<\/span> and lumber yards. The 2023 study came from information provided by 1,129 independent home improvement stores. It says GMROI calculations allow retailers to improve sales by:<\/span><\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_blurb title=”Comparing their prices to those of competitors so they can consider raising their margins. ” use_icon=”on” font_icon=”||divi||400″ icon_color=”#cc6633″ icon_placement=”left” admin_label=”Blurb – Comparing their prices ” _builder_version=”4.27.5″ header_text_color=”#3e5062″ vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ animation_style=”slide” animation_direction=”top” animation_delay=”750ms” z_index_tablet=”0″ header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” body_text_shadow_horizontal_length_tablet=”0px” body_text_shadow_vertical_length_tablet=”0px” body_text_shadow_blur_strength_tablet=”1px” body_link_text_shadow_horizontal_length_tablet=”0px” body_link_text_shadow_vertical_length_tablet=”0px” body_link_text_shadow_blur_strength_tablet=”1px” body_ul_text_shadow_horizontal_length_tablet=”0px” body_ul_text_shadow_vertical_length_tablet=”0px” body_ul_text_shadow_blur_strength_tablet=”1px” body_ol_text_shadow_horizontal_length_tablet=”0px” body_ol_text_shadow_vertical_length_tablet=”0px” body_ol_text_shadow_blur_strength_tablet=”1px” body_quote_text_shadow_horizontal_length_tablet=”0px” body_quote_text_shadow_vertical_length_tablet=”0px” body_quote_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” box_shadow_horizontal_image_tablet=”0px” box_shadow_vertical_image_tablet=”0px” box_shadow_blur_image_tablet=”40px” box_shadow_spread_image_tablet=”0px” text_shadow_horizontal_length_tablet=”0px” text_shadow_vertical_length_tablet=”0px” text_shadow_blur_strength_tablet=”1px” global_colors_info=”{}”][\/et_pb_blurb][et_pb_blurb title=”Finding ways to reduce inventory investment by eliminating duplicate products that might be wasting shelf space. ” use_icon=”on” font_icon=”||divi||400″ icon_color=”#cc6633″ icon_placement=”left” admin_label=”Blurb – Finding ways to reduce” _builder_version=”4.27.5″ header_text_color=”#3e5062″ vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ animation_style=”slide” animation_direction=”top” animation_delay=”750ms” z_index_tablet=”0″ header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” body_text_shadow_horizontal_length_tablet=”0px” body_text_shadow_vertical_length_tablet=”0px” body_text_shadow_blur_strength_tablet=”1px” body_link_text_shadow_horizontal_length_tablet=”0px” body_link_text_shadow_vertical_length_tablet=”0px” body_link_text_shadow_blur_strength_tablet=”1px” body_ul_text_shadow_horizontal_length_tablet=”0px” body_ul_text_shadow_vertical_length_tablet=”0px” body_ul_text_shadow_blur_strength_tablet=”1px” body_ol_text_shadow_horizontal_length_tablet=”0px” body_ol_text_shadow_vertical_length_tablet=”0px” body_ol_text_shadow_blur_strength_tablet=”1px” body_quote_text_shadow_horizontal_length_tablet=”0px” body_quote_text_shadow_vertical_length_tablet=”0px” body_quote_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” box_shadow_horizontal_image_tablet=”0px” box_shadow_vertical_image_tablet=”0px” box_shadow_blur_image_tablet=”40px” box_shadow_spread_image_tablet=”0px” text_shadow_horizontal_length_tablet=”0px” text_shadow_vertical_length_tablet=”0px” text_shadow_blur_strength_tablet=”1px” global_colors_info=”{}”][\/et_pb_blurb][et_pb_blurb title=”And adjusting inventory to fit their customers\u2019 needs. ” use_icon=”on” font_icon=”||divi||400″ icon_color=”#cc6633″ icon_placement=”left” admin_label=”Blurb – And adjusting inventory” _builder_version=”4.27.5″ header_text_color=”#3e5062″ vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ animation_style=”slide” animation_direction=”top” animation_delay=”750ms” z_index_tablet=”0″ header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” body_text_shadow_horizontal_length_tablet=”0px” body_text_shadow_vertical_length_tablet=”0px” body_text_shadow_blur_strength_tablet=”1px” body_link_text_shadow_horizontal_length_tablet=”0px” body_link_text_shadow_vertical_length_tablet=”0px” body_link_text_shadow_blur_strength_tablet=”1px” body_ul_text_shadow_horizontal_length_tablet=”0px” body_ul_text_shadow_vertical_length_tablet=”0px” body_ul_text_shadow_blur_strength_tablet=”1px” body_ol_text_shadow_horizontal_length_tablet=”0px” body_ol_text_shadow_vertical_length_tablet=”0px” body_ol_text_shadow_blur_strength_tablet=”1px” body_quote_text_shadow_horizontal_length_tablet=”0px” body_quote_text_shadow_vertical_length_tablet=”0px” body_quote_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” box_shadow_horizontal_image_tablet=”0px” box_shadow_vertical_image_tablet=”0px” box_shadow_blur_image_tablet=”40px” box_shadow_spread_image_tablet=”0px” text_shadow_horizontal_length_tablet=”0px” text_shadow_vertical_length_tablet=”0px” text_shadow_blur_strength_tablet=”1px” global_colors_info=”{}”][\/et_pb_blurb][et_pb_text admin_label=”Similar information” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n Similar information for other retail segments is available from The Retailers Owners Institute and the National Retail Federation.<\/span><\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_text admin_label=”Making GMROI Actionable” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\n Calculating GMROI starts with having the right data and\u00a0that\u2019s\u00a0where a strong point-of-sale (POS) system becomes indispensable. Modern POS and inventory systems, backed by purpose-built retail technology, give independent hardware stores the visibility needed to accurately measure GMROI and understand how inventory performs throughout its entire sales cycle.<\/span>\u00a0<\/span><\/p>\n Today\u2019s inventory software does far more than simply count items on hand. It tracks usage, monitors changes in unit costs, flags reorder points, and analyzes inventory performance at the individual SKU level. Because POS systems record every transaction \u2013 both in-store and online\u00a0\u2013\u00a0at\u00a0the moment\u00a0of sale, inventory records stay current in real time. That accuracy is critical when\u00a0you\u2019re\u00a0calculating GMROI, which depends on knowing both what\u00a0you\u2019ve\u00a0invested and how quickly and profitably that inventory is turning.<\/span>\u00a0<\/span><\/p>\n When POS data is paired with GMROI analysis, retailers gain the ability to move from reactive to proactive inventory management. Instead of guessing what to reorder or relying on historical buying habits, you can\u00a0anticipate\u00a0sales cycles, spot emerging trends, and tailor inventory levels to match actual customer demand. Just as importantly, GMROI highlights which inventory investments are delivering returns and which are quietly draining cash.<\/span>\u00a0<\/span><\/p>\n GMROI itself\u00a0isn\u2019t\u00a0a silver bullet. It\u00a0won\u2019t\u00a0automatically fix poor buying decisions or operational issues. Think of it as a diagnostic tool much like a health checkup. When a doctor\u00a0identifies\u00a0high blood pressure, the diagnosis alone\u00a0doesn\u2019t\u00a0solve the problem.\u00a0It\u2019s\u00a0the lifestyle changes that the patient makes\u00a0that matter. GMROI plays the same role in your business. It shows where inventory performance is strong and where it needs attention, but\u00a0it\u2019s\u00a0up to you to adjust ordering habits, pricing strategies, and stock levels accordingly.<\/span>\u00a0<\/span><\/p>\n Used consistently, GMROI \u2013 powered by\u00a0accurate\u00a0POS data \u2013 becomes a practical guide for making smarter inventory decisions. For independent hardware stores\u00a0operating\u00a0with limited cash and space,\u00a0increasing your bottom line through tight inventory control should be fundamental to your point-of-sale software package. At an absolute minimum it should:<\/span>\u00a0<\/span><\/p>\n [\/et_pb_text][et_pb_blurb title=”Identify underperforming items that might benefit from looking at suppliers with lower order minimums. ” use_icon=”on” font_icon=”||divi||400″ icon_color=”#cc6633″ icon_placement=”left” admin_label=”Blurb – Identify underperforming” _builder_version=”4.27.5″ header_text_color=”#3e5062″ vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ animation_style=”slide” animation_direction=”top” animation_delay=”750ms” z_index_tablet=”0″ header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” body_text_shadow_horizontal_length_tablet=”0px” body_text_shadow_vertical_length_tablet=”0px” body_text_shadow_blur_strength_tablet=”1px” body_link_text_shadow_horizontal_length_tablet=”0px” body_link_text_shadow_vertical_length_tablet=”0px” body_link_text_shadow_blur_strength_tablet=”1px” body_ul_text_shadow_horizontal_length_tablet=”0px” body_ul_text_shadow_vertical_length_tablet=”0px” body_ul_text_shadow_blur_strength_tablet=”1px” body_ol_text_shadow_horizontal_length_tablet=”0px” body_ol_text_shadow_vertical_length_tablet=”0px” body_ol_text_shadow_blur_strength_tablet=”1px” body_quote_text_shadow_horizontal_length_tablet=”0px” body_quote_text_shadow_vertical_length_tablet=”0px” body_quote_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” box_shadow_horizontal_image_tablet=”0px” box_shadow_vertical_image_tablet=”0px” box_shadow_blur_image_tablet=”40px” box_shadow_spread_image_tablet=”0px” text_shadow_horizontal_length_tablet=”0px” text_shadow_vertical_length_tablet=”0px” text_shadow_blur_strength_tablet=”1px” global_colors_info=”{}”][\/et_pb_blurb][et_pb_blurb title=”Identify inventory items that are frequently overstocked due to high order minimums. ” use_icon=”on” font_icon=”||divi||400″ icon_color=”#cc6633″ icon_placement=”left” admin_label=”Blurb – Identify inventory items” _builder_version=”4.27.5″ header_text_color=”#3e5062″ vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ animation_style=”slide” animation_direction=”top” animation_delay=”750ms” z_index_tablet=”0″ header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” body_text_shadow_horizontal_length_tablet=”0px” body_text_shadow_vertical_length_tablet=”0px” body_text_shadow_blur_strength_tablet=”1px” body_link_text_shadow_horizontal_length_tablet=”0px” body_link_text_shadow_vertical_length_tablet=”0px” body_link_text_shadow_blur_strength_tablet=”1px” body_ul_text_shadow_horizontal_length_tablet=”0px” body_ul_text_shadow_vertical_length_tablet=”0px” body_ul_text_shadow_blur_strength_tablet=”1px” body_ol_text_shadow_horizontal_length_tablet=”0px” body_ol_text_shadow_vertical_length_tablet=”0px” body_ol_text_shadow_blur_strength_tablet=”1px” body_quote_text_shadow_horizontal_length_tablet=”0px” body_quote_text_shadow_vertical_length_tablet=”0px” body_quote_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” box_shadow_horizontal_image_tablet=”0px” box_shadow_vertical_image_tablet=”0px” box_shadow_blur_image_tablet=”40px” box_shadow_spread_image_tablet=”0px” text_shadow_horizontal_length_tablet=”0px” text_shadow_vertical_length_tablet=”0px” text_shadow_blur_strength_tablet=”1px” global_colors_info=”{}”][\/et_pb_blurb][et_pb_text admin_label=”That kind of insight” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\nHow to Calculate GMROI<\/span><\/span>\u00a0<\/span><\/h3>\n
\n[\/et_pb_cta][\/et_pb_column][\/et_pb_row][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” custom_padding=”0px|0px|18.95px|0px|false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”What Knowing GMROI” _builder_version=”4.27.5″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” vertical_offset_tablet=”0″ horizontal_offset_tablet=”0″ z_index_tablet=”0″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px” use_border_color=”off” border_color=”#ffffff” border_style=”solid” global_colors_info=”{}”]<\/p>\nWhat Knowing GMROI Does for Your Business<\/span><\/span>\u00a0<\/span><\/h2>\n
Case\u00a0<\/span>in point<\/span><\/span>\u00a0<\/span><\/h2>\n
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\n <\/td>\n Supplier 1<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n Supplier 2<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n Supplier 3<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n<\/tr>\n \n Inventory Stocking Depth<\/span><\/span>\u00a0<\/span><\/td>\n 2 weeks<\/span><\/span>\u00a0<\/span><\/td>\n 2 weeks<\/span><\/span>\u00a0<\/span><\/td>\n 2 weeks<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n Minimum order quantity<\/span><\/span>\u00a0<\/span><\/td>\n 24<\/span><\/span>\u00a0<\/span><\/td>\n 1<\/span><\/span>\u00a0<\/span><\/td>\n 6<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n Sales per week<\/span><\/span>\u00a0<\/span><\/td>\n 3<\/span><\/span>\u00a0<\/span><\/td>\n 3<\/span><\/span>\u00a0<\/span><\/td>\n 3<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n Order quantity per order cycle<\/span><\/span>\u00a0<\/span><\/td>\n 24<\/span><\/span>\u00a0<\/span><\/td>\n 6<\/span><\/span>\u00a0<\/span><\/td>\n 6<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n Purchase cost per unit<\/span><\/span>\u00a0<\/span><\/td>\n $2.00<\/span><\/span>\u00a0<\/span><\/td>\n $2.35<\/span><\/span>\u00a0<\/span><\/td>\n $<\/span>2.15<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n Investment<\/span><\/span>\u00a0<\/span><\/td>\n $48.00<\/span><\/span>\u00a0<\/span><\/td>\n $14.10<\/span><\/span>\u00a0<\/span><\/td>\n $12.90<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n 52-week profit<\/span><\/span>\u00a0<\/span><\/td>\n $154<\/span>.44<\/span><\/span>\u00a0<\/span><\/td>\n $99.84<\/span><\/span>\u00a0<\/span><\/td>\n $131.04<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n \n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n GMROI<\/span><\/span>\u00a0<\/span><\/td>\n 322%<\/span><\/span>\u00a0<\/span><\/td>\n 708%<\/span><\/span>\u00a0<\/span><\/td>\n 1,016%<\/span><\/span>\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Departmental<\/span>\u00a0impact<\/span><\/span>\u00a0<\/span><\/h2>\n
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\n Department<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n Annual Sales<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n Annual Gross Margin %<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n Average Inventory Cost<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n GMROI<\/span><\/span>\u00a0<\/span><\/span><\/strong><\/td>\n<\/tr>\n \n A<\/td>\n $315,400<\/td>\n 46%<\/td>\n $102,400<\/td>\n 1.47<\/td>\n<\/tr>\n \n B<\/td>\n $220,100<\/td>\n 41%<\/td>\n $53,000<\/td>\n 1.70<\/td>\n<\/tr>\n \n C<\/td>\n $210,500<\/td>\n 48%<\/td>\n $86,100<\/td>\n 1.17<\/td>\n<\/tr>\n \n D<\/td>\n $186,500<\/td>\n 42%<\/td>\n $33,700<\/td>\n 2.32<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \u00a0<\/h2>\n
Making GMROI Actionable with POS Data<\/span><\/b>\u00a0<\/span><\/h2>\n