Most resellers track ROI at the category or product type level.

They know their average ROI for toys, electronics, shoes, or home goods.

This is helpful, but it hides one of the most important insights in your business.

Product types show broad trends.

SKU level tracking shows exactly where your profit comes from.

When you track ROI by SKU, you understand which individual items are carrying your business, which ones are wasting your time, and which ones deserve reinvestment.

This guide explains why SKU based ROI tracking is more accurate, more actionable, and more profitable.

Product Type ROI Hides Your Real Performance

If you sell multiple categories, a product type average looks helpful but misses the full story.

Example

Your toy category shows:

• 48% average ROI

That seems healthy, but inside that category:

• Some SKUs generate over 120% ROI
• Others barely break even
• Some lose money due to shipping or fee miscalculations
• A few rare items carry most of the profit

Product type averages hide your best and worst SKUs.

This prevents smart reinvestment decisions.

SKU Level ROI Shows True Profit, Not Assumptions

Every SKU performs differently.

SKU level ROI shows:

• Which items consistently produce high profit
• Which listings drain time and space
• Which products should be sourced again
• Which suppliers produce better ROI
• Which categories have hidden winners
• Which items have low margin but high turnover

Profit is not produced by categories.

Profit is produced by SKUs.

SKU Level Tracking Eliminates Emotional Buying Decisions

Many resellers buy items because:

• They sold similar items before
• They assume the category performs well
• The product feels like a good deal
• They remember a past success

SKU tracking replaces emotion with evidence.

By reviewing actual ROI per SKU, you learn:

• Which items you bought too high
• Which items were deceptive deals
• Which posted high sales volume but low ROI
• Which brands consistently underperform

With real data, you make smarter sourcing decisions.

SKU ROI Reveals Which Items Deserve Reinvestment

Some SKUs are consistent performers.

They offer:

• Predictable demand
• Strong ROI
• Reliable sales cycles
• Minimal returns
• Category stability

When you identify winners at the SKU level, you can:

• Replenish them
• Buy deeper quantities
• Prioritize them when sourcing
• Focus on suppliers that provide them

Your most profitable SKUs become a repeatable system.

SKU ROI Helps You Remove Low Value Work From Your Business

Some products produce:

• Low margin
• High returns
• Long storage times
• High shipping cost
• Frequent customer issues

Category ROI hides these problems.

SKU ROI exposes them.

Once you see low performing SKUs clearly, you can:

• Stop sourcing them
• Raise the price
• Liquidate slow movers
• Replace them with higher ROI items

This creates healthier and more predictable profit.

SKU ROI Shows How Listing Quality Affects Profit

Some SKUs perform poorly not because the product is bad, but because the listing needs improvement.

SKU level ROI helps you identify:

• Listings with weak titles
• Missing item specifics
• Poor photo quality
• Low impressions
• Low click through rate
• Wrong category placement

Fixing listings often doubles the ROI of a SKU without changing the product.

SKU ROI Helps You Understand Supplier Performance

If you source from multiple suppliers, SKU level tracking shows:

• Which supplier produces highest ROI
• Which supplier produces fastest movers
• Which supplier creates dead stock
• Which suppliers justify higher buy costs

Supplier performance becomes measurable instead of random.

How To Track ROI by SKU (Simple Workflow)

You do not need complex systems.

A simple dashboard or spreadsheet can track SKU ROI effectively.

Step 1: Assign a unique SKU to every item

Clean, consistent SKU structure is essential.

Step 2: Track buy cost per SKU

Record:

• Purchase price
• Tax
• Shipping to you (if applicable)

Step 3: Track sell price and all fees

Include:

• Marketplace fees
• Shipping fees
• Packaging cost

Step 4: Calculate ROI

Formula:

Net profit divided by buy cost

Step 5: Review SKU performance weekly or monthly

Highlight:

• Top performers
• Weak performers
• Average category ROI
• Items worth replenishing

This creates a clear system for profit visibility.

Case Example: SKU Level Insights That Change Strategy

Example Item A

Buy cost: $12

Sale price: $42

Net profit: $22

ROI: 183%

Example Item B

Buy cost: $12

Sale price: $20

Net profit: $4

ROI: 33%

Both items belong to the same category, but only one deserves replenishment.

Without SKU level tracking, you would treat them equally.

SKU Level ROI Helps You Manage Storage Space Better

Slow moving, low ROI SKUs consume:

• Shelf space
• Time
• Mental energy

SKU tracking shows:

• Which items deserve prime storage
• Which should be discounted
• Which should be removed entirely

Space is a real business cost.

SKU ROI ensures you are using it wisely.

FAQs

Q: Should I track ROI by category as well?

Yes, but SKU level data should guide final decisions.

Q: How often should I analyze SKU ROI?

Monthly is ideal, but weekly for high volume sellers.

Q: Does SKU ROI include shipping cost?

Always include shipping, fees, and packaging.

Q: Should I delete low ROI items?

Fix listings first. If ROI stays low, liquidate.

Actionable Takeaways

✅ Track ROI at the SKU level for accurate performance insight

✅ Identify winning SKUs that deserve replenishment

✅ Stop sourcing low ROI SKUs even if the category performs well

✅ Evaluate suppliers based on SKU performance

✅ Use SKU ROI to manage storage and pricing

✅ Review SKU ROI monthly to guide sourcing strategy

SKU level tracking creates clarity.

Clarity creates better sourcing decisions.

Better decisions create stronger profit.