The Profit Margin Formula Every Reseller Should Know

Understand gross margin, net margin, and the all-in cost trap — with worked examples for resellers selling on eBay, Depop, and Shopify.

The formula

Margin is just the share of the sale price you actually keep:

Margin % = (Sale Price − Cost) ÷ Sale Price × 100

Gross vs net — and why it matters

Gross margin uses only the item's cost. Net margin subtracts everything else too: platform fees, shipping, payment processing, packaging, refunds.

Most resellers calculate gross and call it a day. That's the trap.

A worked example

You buy a jacket for $30 and sell it on eBay for $80.

Gross margin: (80 − 30) ÷ 80 = 62.5%
eBay final-value fee (~13%): −$10.40
Shipping label: −$6.50
Polybag + thank-you card: −$1
Net margin: (80 − 30 − 10.40 − 6.50 − 1) ÷ 80 = 40.1%

That 22-point gap is the difference between "good month" and "great month" — and it only shows up if you bake fees into your cost field.

The "all-in cost" rule

Track landed cost, not sticker cost. Landed cost includes:

The item itself
Shipping to you
Sales tax you paid (if not reclaimable)
Any repair, cleaning, or restoration

Update the cost field once, at intake. Future margin math will tell the truth.

Target margins by category

Sneakers / streetwear: 25–40% net is healthy
Vintage clothing: 50–70% net is achievable on sourced finds
Electronics: 15–25% net — thin and volume-driven
Books / media: 60%+ on individual rare items, near zero on bulk

The bottom line

Margin is the only number that tells you whether you have a business or a hobby. Track landed cost, account for fees, and review your top 10 items every month. Inventra does this math automatically — but the formula above works whatever tool you use.