GMROI (Gross Margin Return on Inventory)
Σύντομη απάντηση
The metric showing how many euros of gross margin you generate for each euro invested in inventory.
Βασικά συμπεράσματα
- Comparing real profitability between SKUs/categories
- Listing/delisting decisions
- Allocating working capital to stock that performs
What GMROI is
GMROI (Gross Margin Return on Inventory Investment) = gross margin / average inventory cost. A GMROI of 3 means €3 of margin for every €1 held in stock. It combines profitability with capital efficiency.
Why it matters to the board
GMROI links margin with inventory turnover - two things managers often view separately. A high-margin but slow-turning product can have worse GMROI than a low-margin but fast one.
How it is used
- Comparing real profitability between SKUs/categories
- Listing/delisting decisions
- Allocating working capital to stock that performs
How CRMconnect helps
CRMconnect combines margin data with real inventory turnover to highlight low-GMROI SKUs (candidates for markdown/delisting) and top performers, optimising locked capital.
Πραγματικό παράδειγμα
A retailer kept a high-margin but very slow-turning product. GMROI analysis in CRMconnect showed it locked more capital than it generated; replacing it raised inventory return.
Ενημέρωση:
Συχνές ερωτήσεις
Why isn't margin alone enough?+
High margin with slow turnover can lock capital without return. GMROI corrects this, measuring margin per euro of stock, not just per sale.
What GMROI is good?+
Above 1 means stock generates more than it's worth; targets vary by industry. What matters is SKU comparison and the trend.
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Σχετικοί όροι
Gross Margin
The difference between revenue and cost of goods sold, usually expressed as a percentage of revenue.
LogisticsInventory turnover
How many times stock is fully sold and replenished in a period - a measure of capital efficiency.
ΟικονομικάWorking capital
The difference between current assets and current liabilities - the cash a company has to fund daily operations. A key financial-health indicator.
LogisticsDead stock
Goods unsold for a long period that lock capital and space, with little prospect of selling at normal price.