The costs that quietly shrink your resale profit
The gap between what you paid and what it sells for is not your profit. Several costs sit in between, and they add up.
Published , updated .
It is easy to look at a $40.00 sale of something you bought for $20.00 and call it $20.00 of profit. This guide lists what that quick sum leaves out.
The costs
- The selling fee: usually a percentage of the sale price, sometimes with a fixed amount on top.
- Shipping to you, if you bought online.
- Shipping to your buyer, if you pay it.
- Packaging and supplies: boxes, tape, labels.
- Returns and refunds: the item may come back, and the fee may not.
- Your time, which is worth something even if it is not on a statement.
A worked example
These example numbers are made up to show the effect. Your fees and shipping will differ.
- You pay $20.00 for the item and $4.00 to have it shipped to you: $24.00 in.
- It sells for $40.00. A 13% selling fee is $5.20.
- You pay $6.00 to ship it to the buyer and spend $1.00 on supplies.
$40.00 minus $24.00, $5.20, $6.00 and $1.00 leaves $3.80, not $20.00. That is about a 16% return on the $24.00 you put in, before any return and before your time.
What to do with this
Put your own numbers into the resale profit calculator before you buy, not after. If the profit is thin, the maximum buy price calculator shows how much lower the purchase price would have to be. Fees and shipping rates change, so check the current ones for where you sell.
Keep going
- Resale profit and ROI calculatorProfit, return on cost and break-even price for a resale, with the marketplace fee you enter.
- How to calculate resale profit, ROI and marginProfit, return on cost and margin are three different numbers. A worked example you can check.
- Break-even and the most you can pay for an itemWork backwards from the price you expect to sell at to the most you can pay.