The complete formula
Each term hides traps:
- Item cost — what you paid, including the whole lot. If you bought a $50 bundle of 10 items and sold 6, those 6 carry the full $50 until the rest sells (or allocate cost per item upfront — but be consistent).
- Platform fees — Poshmark 20%, eBay ~13.25% + $0.30 (on shipping too), Depop 10% + processing, Vinted 0%. Same item, wildly different net.
- Shipping & packaging — the label when you offer free shipping, plus polymailers, boxes, tape and tissue. Packaging alone runs $0.30–1.00 per order.
- Overheads — mileage to the thrift store, storage bins or unit, subscriptions, cross-listing tools. Divide monthly overheads by monthly sales and load it onto each item.
Margin, markup, ROI — three numbers, three uses
| Metric | Formula | Answers the question |
|---|---|---|
| Net margin | profit ÷ sale price | "How much of the sale do I keep?" |
| Markup | profit ÷ item cost | "How much did I mark this up?" |
| ROI | profit ÷ total money invested | "Was my capital well spent?" |
Buying a shirt at $8 and selling at $25 with $4.50 of fees and $1 of packaging: profit is $11.50. That's a 46% margin, a 144% markup and — if $9 was your total cash out — a 128% ROI. All three describe the same flip; ROI is the one that tells you whether to buy more shirts.
Worked example: the honest version
A thrifted Patagonia fleece, sold on Depop for $58 with buyer-paid shipping:
- Sale price: $58.00
- Item cost: −$12.00
- Depop fee (10%) + payment (~3.3% + $0.45): −$8.16
- Packaging: −$0.80
- Mileage share (20 sourcing miles ÷ 8 items found): −$1.75
Net profit: $35.29 — 61% net margin, 294% ROI. A great flip. But run the same math on a $14 sale and the fixed costs eat you alive: this is why volume resellers set a minimum price floor (usually $15–20) below which an item isn't worth listing.
What "good" looks like in 2026
- Net margin ≥ 30% of sale price — below 20%, one return wipes out several sales' profit.
- ROI ≥ 100% — double your money per flip, or your capital is working too slowly.
- Sell-through — a 70% margin means nothing if the item sits for 9 months. Track how fast inventory turns, not just how much it earns.
Track it per item, not per month
A monthly "revenue minus expenses" number hides which niches actually make money. Per-item tracking shows you that band tees return 200% while designer jeans return 40% and take 3× longer to sell — so next sourcing trip, you skip the jeans. A spreadsheet can do this at low volume; past ~50 items it breaks down (here's when to switch to an app). Margeo does it automatically: every item carries its cost, fees and sale price, and your real margin per platform is always current.
FAQ
Should I count my time?
For pricing decisions, yes — divide net profit by hours spent (sourcing, cleaning, photographing, shipping). Many "profitable" flips pay under minimum wage; that's fine for a hobby, fatal for a business.
Do I calculate margin before or after taxes?
Track pre-tax margin for sourcing decisions, but set aside your jurisdiction's rate (income/self-employment tax) from every payout so tax season isn't a surprise.
What about unsold items?
They're the silent margin killer. If 20% of your inventory never sells, your effective item cost on everything else rises by 25%. Count dead stock in your monthly numbers.