I’m an online seller, similar to those on Amazon, and I’ve noticed that discussions often focus on ROI (Return on Investment). However, I rarely hear about profit margin.
While I understand that ROI is crucial, I believe that profit margin is equally important for building a sustainable business.
As I’m not an Amazon expert, I’m curious to know: should we prioritize profit margin or ROI?
How do you balance the two in your business?
Both profit margin and ROI matter, but they answer different questions and should be balanced rather than treated as an either-or choice, because profit margin tells you whether each sale is actually healthy and sustainable after all costs, while ROI tells you how efficiently your capital is working and how fast you can scale. In practice, many sellers aim for a minimum profit margin to protect against fees, returns, and price drops, and then use ROI to decide which products deserve more capital and faster reinvestment.
A high ROI with a razor-thin margin can look attractive but often collapses when ads increase, fees change, or competition intensifies, whereas a solid margin with a moderate ROI usually offers more resilience and less stress. The most sustainable approach is to set non-negotiable margin thresholds to ensure real profit, then compare ROI across products to allocate capital to the ones that grow the business fastest without sacrificing long-term stability.