Profit margin calculator
The number that matters is not the gap between what you paid and what you sold for. It is what is left once the shipping is paid and the commission is taken — and the distance between the two is what separates a business that pays from one that keeps you busy.
The calculation
Nothing is pre-filled on your behalf. A fee schedule changes without warning, and a wrong number costs more than a missing one: go and read yours off the platform. It depends on your category and on your seller status.
Amounts are in euros here. The platform you sell on bills in the currency of its own market, so if that is not the euro, read the € signs as your own currency — the arithmetic is identical. We would rather leave the symbol alone than convert at a rate we cannot keep current, which is the same reason no fee percentage is printed on this page.
Three margins, and the one to watch
The word “margin” covers three different things, and the confusion between them explains a fair share of the reselling operations that look like they work without ever leaving any money behind.
| Name | How it is worked out | What it helps you decide |
|---|---|---|
| Gross margin | Sale price − purchase price | Nothing. It flatters, it does not guide. |
| Net margin | What is left after fees, shipping and packaging | Whether the piece was worth it |
| Return on capital | Net margin against the money you tied up | Whether your money is working |
The calculator above gives you the second one. That is the right one for deciding on a purchase. The third cannot be worked out on a single piece: it needs to know how long the money stayed locked up, which means tracking stock.
One note on the percentage shown: it measures profit against the sale price, not the purchase price. That is the commercial definition, and the only one that compares across items. Measured against the purchase price, a piece paid one euro would post thousands of per cent and say nothing useful.
The purchase price is not what the piece cost you
A jacket picked up for €8 in a charity shop did not cost €8. Add what you paid to get hold of it and what you pay to sell it. None of these lines is dramatic on its own; the total is.
| Cost | When it turns up | Why it gets missed |
|---|---|---|
| Packaging | Every shipment | Bought in bulk, so never tied to a sale |
| The sourcing trip | Every run | Split across several pieces, so charged to none |
| Washing, mending, a battery | One piece in five | Too small to write down |
| Stock that never sells | End of season | It appears in no sale at all |
| Refunding a dispute | After the fact | The sale was already counted as won |
| Your own time | Always | It never leaves a bank account |
The calculator will not guess them. If you want a number you can trust, fold them into the purchase price rather than ignore them. On a €35 item, two euros of packaging and travel is close to six points of margin — enough to flip a buying decision, and never enough for anyone to remember to count it.
A simple way to handle trips: divide the cost of a sourcing run by the number of pieces you came back with, and add that to each one’s purchase price. It is rough, and it is infinitely closer than zero.
What margin should you aim for?
We are not going to print a target percentage, for a simple reason: there is no universal one, and the figures in circulation are copied from one article to the next without anyone knowing where they came from. The right margin depends on three things only you know.
- Your unsold rate. If one piece in five never moves, the other four have to pay for it. A comfortable margin on a category that shifts badly can pay less than a thin margin on one that always goes.
- Your turnover speed. Thirty per cent in ten days and sixty per cent in five months are not comparable. The first lets you buy again fifteen times in between.
- The time the piece takes from you. An item that needs a wash, a repair and three exchanges with the buyer eats minutes that appear nowhere.
So the useful rule is not a threshold, it is a comparison: a piece is worth it if it beats what the same money would have earned elsewhere over the same period. That is exactly what return on capital measures, and why you end up needing it.
An example, purely as an illustration
The numbers below are here to show the mechanism. They claim nothing about a market, or about a category of goods.
| What you think | What it is | |
|---|---|---|
| Purchase price | €8 | €8 |
| Packaging and travel | — | €2 |
| Sale price | €35 | €35 |
| Shipping thrown in to close | — | €5 |
| Result | €27 of margin | €20 of net profit |
| Rate | 77% | 57% |
Twenty points of difference, with no mistake made anywhere and nothing unusual about any of the missing lines. That is the whole problem: nobody gets the arithmetic wrong, everybody leaves lines out.
The thing this calculator does not measure
Two items can post the same margin and not be worth the same. The one that goes in three days frees up cash and shelf space; the one that sits for six months ties up both, takes the shelf, and usually ends up discounted.
A margin rate says nothing about that difference. It is the limit of per-item maths, and the reason stock tracking eventually becomes necessary: turnover cannot be calculated on one piece, it can only be observed across a hundred.
Free account — 10 estimates a month
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