Profit, postage and stock
How to calculate your profit when you resell
Net profit is what you actually receive for an item, minus everything it cost you: the purchase price, the trip to buy it, cleaning or repairs, packaging, and any postage or fees you pay. "Bought for €5, sold for €30" is not €25 profit. Count the missing lines and it is often a third less.
Why is the cost price not the purchase price?
An item does not cost you what you paid for it. Its cost price, the base of every profit calculation, adds the purchase price to everything it took to make the item sellable. Four lines make it up:
- the purchase price itself;
- the cost of getting it: fuel to the flea market or car boot sale, the entry fee, postage if you bought online;
- getting it ready: washing, a repair, a new battery, cleaning products;
- the packaging you post it in, if you supply it.
On a €5 item, €2 of extras is already 40% of the cost. You rarely see it item by item, and it is what separates a profitable bundle from one that just takes up space.
Gross profit, net profit, margin: which one should you watch?
Three numbers get called "margin" in reselling, and only one ends up in your bank account.
Gross profit
Sale price minus cost price. It ignores what the platform and the post office take. It is the number everyone quotes and the least useful one, because it promises money you will never fully receive.
Net profit
What you actually receive minus the cost price. Take off any fee you pay, postage you cover, and discounts you agreed to in an offer. Here is the opening example, with the real lines:
| Line | Amount |
|---|---|
| Listed price | €30.00 |
| Offer accepted | − €3.00 |
| Postage you agreed to cover | − €1.50 |
| Received | €25.50 |
| Purchase price | − €5.00 |
| Fuel and packaging | − €2.00 |
| Net profit | €18.50 |
Example figures, not a market: €18.50 instead of the €25 announced, a gap of 26%. On one item it is annoying. On three hundred items a year, it is the difference between a side business that pays and one that only keeps you busy.
Return on cost
Net profit divided by cost price. Here: €18.50 ÷ €7 = 264%. This ratio lets you compare items at very different prices, and so tells you where to put your buying money. A €7 item that makes €18.50 beats an €80 item that makes €40, as long as it sells as fast.
Margin or markup: what is the percentage measured against?
Two conventions circulate and they give very different numbers. Markup, or return on cost, measures profit against what you paid: that is the one used above. Margin measures profit against the sale price: it never goes above 100%. An item bought for €1 and sold for €20 shows a 1,900% markup and a 95% margin. Both are right.
| What you think | What it is | |
|---|---|---|
| Purchase price | €8 | €8 |
| Packaging and travel | not counted | €2 |
| Sale price | €35 | €35 |
| Postage covered to close the sale | not counted | €5 |
| Result | €27 profit | €20 net profit |
| Markup (÷ cost) | 338% | 200% |
| Margin (÷ sale price) | 77% | 57% |
Example figures again, chosen to show the mechanism. Nobody made a mistake in the sum: two lines were simply left out. When a percentage looks spectacular, the first question is what it is measured against.
Why does the time an item takes to sell change its profit?
Two items that each make €18 net are not worth the same if one sells in two weeks and the other in eight months. The first frees your money and your shelf to buy again; the second ties both up.
Example: €7 that comes back every two weeks can be reinvested many times in a year. €7 that comes back after eight months works once. Same profit per item, very different profit per euro over the year. That is why experienced resellers turn down some high-margin pieces: they know those pieces will sit.
Writing down the date you bought and the date you sold each item costs almost nothing, and it is what makes this calculation possible. Without both dates, you will never know which category sells fast for you, which depends on your style, your area and your buyers, and is in no general guide.
What markup should you aim for?
There is no universal number, but three benchmarks hold up in second-hand reselling:
- Below 100% markup (selling for less than double the cost price), an item barely pays for the time spent photographing, listing, answering questions and posting.
- Between 150% and 300% is the usual range for someone who sources carefully.
- Above that, it is usually an identified piece: a good brand underpriced by the seller. That is where knowing your market beats rummaging at random.
When does a good margin hide a bad buy?
- The piece that sits. A big margin in five months is worth less than a modest one in ten days, because the second lets you buy again several times in between.
- The category where some never sell. If one piece in four never goes, the other three have to pay for it, and the margin on the ones that sell does not show that.
- The piece that eats time. Washing, mending, three rounds of messages, a dispute: minutes that appear in no calculation and, counted by the hour, make it worse than an ordinary item.
None of these shows on a single item. They show across dozens, which is the limit of working item by item and the reason stock tracking ends up being worth it.
Decide before you buy, not after
All of this only matters at one moment: when you are holding the item at the stall and have to decide. The right question is not "is it worth more than €5?" but "what does it really sell for, how fast, and what will I keep?"
That is what resellflip is for: photograph the item on the spot, get a price range compared with recorded sales when there are any, and see the net profit you can expect. Once it has sold, your figures show which categories and which sourcing spots actually pay.
A tool for this: Profit margin calculator
The tool
Try resellflip on one item
From one photo: a price range, and the net profit you would keep before you buy. Listings are written for you on a paid plan. No card needed.