Working out your resale margin and ROI without getting it wrong
Gross margin, net margin, ROI, platform fees, splitting a job lot… The vocabulary of profitability in reselling, explained with simple formulas and worked examples — and how Postfast does the maths for you.
Gross margin and net margin: the difference that changes everything
Plenty of resellers work out their “gross” margin and believe they are making more than they really are. Gross margin only looks at the gap between the sale price and the purchase price. Net margin also takes out every cost — and it is the only one that tells you what actually stays in your pocket.
Gross margin
Formula: Gross margin = Sale price − Purchase price. You buy a console for €20 and sell it for €60: your gross margin is €40. Simple, but incomplete.
Net margin
Formula: Net margin = Sale price − Purchase price − Selling fees − Outside costs. On that same console sold at €60, if the platform takes €6 in commission and postage costs you €3 that you never charged on, your net margin drops to 60 − 20 − 6 − 3 = €31. That is the figure that says whether the deal was worth it.
Worth remembering.
Gross margin motivates, net margin decides. Always think in net before congratulating yourself on a good sale.
ROI: your real return
ROI (return on investment) answers a different question: “how hard did my money work?” Two deals can both bring in €30 of margin, one tying up €10 and the other €100 — that is not the same return at all.
Formula: ROI = Net margin ÷ Purchase price × 100. A jacket bought for €5 and sold for €25 (around €18 of net margin) shows an ROI of 360%. A TV bought for €100 and sold for €160 (net margin around €45) shows an ROI of 45%. The jacket brings in less in euros, but it turns your cash over far better — that is the key indicator for knowing what to buy again.
Selling fees, the reseller's blind spot
Every platform has its own model, and forgetting them skews your whole profitability:
- Vinted: a private seller pays no commission on the sale (it is the buyer who pays the buyer protection fee), but paid promotion options reduce your net.
- eBay: a fee on the completed sale (final value fees), varying by category, taken from the total received.
- Outside costs: packaging, postage you never charged on, fuel, materials… they nibble away at the margin without ever showing up on the sale receipt.
Rates change and depend on the category: rather than memorising a percentage, enter the real fees of each sale so the maths comes out right.
Splitting the cost of a job lot pro rata (the classic mistake)
When you buy a lot, the real trap is dividing the price by the number of items. A lot paid €120 containing a console and 8 games does not cost “120 ÷ 9 = €13.33 per item”: the console is worth far more than a game. The right method splits the cost in proportion to the market value of each piece.
Estimate the value of each item
Console ≈ €80, each game ≈ €15. Total value of the lot = 80 + (8 × 15) = €200.
Work out each one's share
Console: 80 ÷ 200 = 40%. Each game: 15 ÷ 200 = 7.5%.
Spread the €120 you paid
Console: 40% × 120 = €48. Each game: 7.5% × 120 = €9 (8 × 9 = €72). Total: 48 + 72 = €120.
The result: you know exactly what the console cost you (€48, not €13.33) and therefore your true margin when you sell it on its own. To estimate the market value of each piece, lean on real comparables — see our guide to estimating the resale price.
Dormant stock: the margin you never see
An item bought but never sold is not neutral: it is cash tied up. Dormant stock (unsold for a long time) drags down your overall ROI even when, on paper, no sale “at a loss” shows up. Tracking how long each piece has been sitting helps you decide what to clear out or relist before it costs more than it brings in.
How Postfast works out your profitability for you
Doing these sums by hand in a spreadsheet gets unmanageable past a few dozen items. Postfast links every sale to its purchase and automates the lot:
- Net margin worked out automatically, with platform fees and outside costs deducted.
- Real ROI per item and per lot, with nothing to type in twice.
- The cost of a lot split in proportion to the value of each piece.
- Best and worst buys, dormant stock and alerts (sold at a loss, due a relist).
- CSV export and import of your purchases, included from the free plan.
From the photo taken at a car boot sale or a flea market right through to the margin summary, you keep an honest view of what genuinely makes you money.
Frequently asked questions
How do you work out your resale margin?
Always start from the net margin: Sale price − Purchase price − Selling fees − Outside costs. Gross margin (sale price minus purchase price) is a headline figure that overstates what you make, because it ignores the platform commission and costs such as packaging or postage you never charged on.
What is the difference between gross margin and net margin?
Gross margin only takes out the purchase price. Net margin also takes out every cost (platform commission, postage, packaging, materials). Net margin is what tells you how much actually stays in your pocket, so it is the only one to use when deciding whether a sale was worth it.
What is ROI in reselling, and how do you calculate it?
ROI (return on investment) measures how hard your money worked: ROI = Net margin ÷ Purchase price × 100. An item bought for €5 and sold on with €18 of net margin has an ROI of 360%. It complements the margin in euros: a small, very profitable buy turns your cash over better than a big one with a weak return.
How do you split the cost of a job lot across several items?
Do not divide the price by the number of items: split it in proportion to the market value of each piece. For a lot at €120 (a console worth €80 and eight games at €15, so €200 of total value), the console absorbs 40% = €48 and each game 7.5% = €9. Postfast does this calculation automatically.
Should Vinted and eBay fees count towards your margin?
Yes, they are part of the net margin. On Vinted, a private seller pays no commission on the sale (the buyer pays the buyer protection fee), but paid options reduce the net. On eBay, a fee applies on the completed sale. Rates vary by category, so enter the real fees for each sale.
Read next.
Estimating the resale price · Managing stock as a professional reseller · Hunting at car boot sales & flea markets
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