Most resellers think they know their profit.

But when you ask how much they actually made after all fees, shipping, packaging, and taxes, the answer is usually a guess.

True net profit is not the number shown on your marketplace payouts.

It is not the difference between the sale price and the buy cost.

True net profit includes every single cost that touches the transaction.

If you want consistent margins, smarter sourcing, and reliable growth, you need a system for calculating net profit accurately.

This guide walks you through every cost that affects your bottom line and the exact formula to calculate real profit.

Why Most Resellers Miscalculate Profit

Profit guesses are dangerous.

They lead to bad sourcing decisions, inconsistent margins, and inflated expectations.

Most resellers miscalculate profit because they leave out key costs:

• Final value fees
• Payment processing fees
• Shipping cost
• Packaging supplies
• Promoted listing fees
• Sales tax on the purchase
• Return related costs
• Mileage or sourcing expenses
• Storage and overhead

Missing even one category can reduce your real profit by 20% – 40%.

The Correct Formula for True Net Profit

Use this simple structure.

Net Profit Formula

Net Profit = Sale Price minus (Buy Cost + Sales Tax + Shipping Cost + Packaging + Marketplace Fees + Promotion Fees)

This captures all major direct costs per transaction.

ROI Formula

ROI % = (Net Profit / Total Cost) * 100

Where Total Cost includes every cost listed above.

Breakdown of Every Cost That Must Be Included

Let us go through each cost category so you never miss one again.

Cost 1: Buy Cost

This is the base of your calculation.

Always include tax if you paid it.

If you purchased a lot, divide the total cost by the number of sellable items.

Cost 2: Sales Tax on Purchases

If you are not using a resale exemption certificate, sales tax adds five to ten percent to your buy cost.

Always log it.

Ignoring sales tax inflates your ROI.

Cost 3: Marketplace Fees

Marketplace fees come from multiple places:

• Insertion fee
• Final value fee
• Percentage-based category fee
• Shipping fee applied to the buyer paid shipping
• Payment processing fee
• Promotional fee

Most sellers forget the fee that applies to shipping, which is a major hidden loss.

Cost 4: Shipping Cost

Never assume your shipping will cost the same as last time.

Shipping varies based on:

• Zone
• Weight
• Packaging size
• Carrier choice

If you charge the buyer for shipping, make sure your shipping cost does not exceed what they paid.

Cost 5: Packaging Supplies

Even small packaging costs add up when you sell dozens of items per week.

Track:

• Boxes
• Bubble mailers
• Tape
• Labels
• Poly bags
• Bubble wrap
• Fill paper

Assign a standard cost per package type and apply it consistently.

Cost 6: Promoted Listing or Advertising Fees

If you pay for promoted visibility, this cost must be included per SKU.

Failing to include promotions can erase half your expected profit.

Cost 7: Returns and Refunds

Returns cost you:

• Shipping
• Time
• Lost buyer payment
• Lost packaging
• Possibly lost inventory

All return costs should be logged under the original SKU.

Cost 8: Miscellaneous Overhead

These are optional cost categories, but they help you understand true profitability.

Examples:

• Mileage for sourcing trips
• Storage fees
• Shelving and bins
• Photo equipment
• Label printers

You can divide these costs across monthly sales volume to get a more accurate picture.

Real World Example: Why True Net Profit Matters

Scenario

• Sale price: $60
• Buy cost: $22
• Tax: $1.54
• Marketplace fee: $7.80
• Shipping label: $8.90
• Packaging: $0.40
• Promotion fee: $1.20

Net Profit = $60 – ($22 + $1.54 + $7.80 + $8.90 + $0.40 + $1.20)

Net Profit = $18.16

At first glance, many resellers would assume:

$60 – $22 = $38 profit

In reality, the profit is $18.16.

The difference is $20.

This is why true net profit matters.

Build a Profit Tracking Sheet That Does the Math Automatically

Your profit tracker should include the following columns:

• SKU
• Product name
• Buy cost
• Tax paid
• Marketplace fees
• Promotion fees
• Shipping paid by buyer
• Actual shipping cost
• Packaging cost
• Total cost
• Sale price
• Net profit
• ROI percent
• Days to sell

Use formulas to automate calculations.

Never type ROI or net profit manually.

The Most Common Profit Calculation Mistakes

Mistake	Why it harms profit	How to fix it
Forgetting the shipping fee on buyer-paid shipping	Hidden loss in every sale	Track total marketplace fee per transaction
Ignoring packaging costs	Reduces real margin	Assign standard packaging cost
Estimating fees	Creates unreliable ROI	Use real fee totals, not estimates
Not dividing lot costs correctly	Inflates ROI	Always calculate per unit cost
Ignoring returns	Distorts profit	Log returns as negative profit
Tracking profit only monthly	Hides SKU level performance	Track profit per SKU

Fixing these mistakes immediately increases clarity and scalability.

Why Accurate Net Profit Data Helps You Scale

Accurate profit data allows you to:

• Identify your best categories
• Cut low margin products
• Price items correctly
• Allocate capital efficiently
• Predict future profitability
• Make sourcing decisions confidently

Profit clarity is the foundation for any reseller looking to grow beyond hobby level.

FAQs

Q: How often should I calculate net profit?

Daily or weekly. The more frequent, the more accurate your decisions.

Q: Do I need to include shipping when buyers pay for it?

Yes. If your shipping cost exceeds what the buyer paid, you lose money.

Q: Should I include mileage and sourcing fuel costs?

Yes, if you want true profit accuracy. Track it monthly.

Q: What if a product sells for a high price but costs too much to ship?

Reduce shipping costs with optimized packaging or adjust the pricing strategy.

Actionable Takeaways

✅ Track every fee and cost per SKU

✅ Use formulas to calculate net profit and ROI

✅ Never estimate fees or shipping costs

✅ Include packaging and tax in total cost

✅ Record returns as negative profit

✅ Review your profit performance weekly

Net profit is the only number that matters.

When you calculate it correctly, you finally see which products deserve reinvestment and which ones quietly drain your margin.

Accurate profit tracking is the key to building a sustainable, scalable reseller business.