Most sellers overestimate their profit. Learn how to account for every cost and calculate your real margin.
Calculating Your True Profit Margin Many UK resellers think they're making more profit than they actually are. Hidden costs eat into margins, and without tracking them properly, you could be working for less than minimum wage. The Profit Margin Formula Profit Margin = ((Selling Price Total Costs) / Selling Price) × 100 Costs Most Sellers Forget 1. Platform fees — eBay, Etsy, Depop all take a percentage 2. Payment processing — typically 2 3% on card payments 3. Packaging materials — boxes, tape, bubble wrap, labels 4. Postage costs — including tracking and insurance 5. Source costs — what you paid for the item 6. Petrol/travel — trips to charity shops, car boots, Post Office 7. Returns — budget for 5 10% return rate 8. Storage — even at home, space has value 9. Time — your hours have a cost Worked Example Selling a jacket on eBay: Selling price: £45.00 Source cost: £5.00 eBay fees (12.8%): £5.76 Postage: £4.50 Packaging: £1.20 Total costs: £16.46 Profit: £28.54 Margin: 63.4% Not bad — but factor in 2 hours of sourcing, listing, and posting: Hourly rate: £14.27 What's a Good Margin? Under 30% — risky, one return wipes your profit 30 50% — acceptable for high volume items 50 70% — sweet spot for most resellers Over 70% — excellent, typical for vintage/rare items Tips to Improve Your Margins Source cheaper — car boots and charity shop sale days Bundle shipping — send multiple items together Negotiate postage rates with couriers for volume Use MarginWise to compare fees across platforms before listing Focus on lightweight items to reduce shipping costs Track Everything Use a sim