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Are You REALLY Making Money at Your Resale Business?

It’s not hard to understand the concept of reselling. You buy something used for less than it’s resale value, list it on an online platform, and sell it for a profit. However, lately I’ve seen a lot of resellers talking about profit rather than sales numbers- which is how it should be! If you sell 15 items, but only make a dollar profit per item, odds are you aren’t really making money. Read on for some great tips on how to measure your profitability. It gets a bit mathy, but stay with me.

The Hidden Costs of Reselling

Most people forget about the “hidden” costs! Some people see reselling as a hobby, and they don’t mind spending hour after hour scouring all the thrift stores in the area on a daily basis. However, the question becomes, how much time do you really spend sourcing?

Example:

Trish visits three thrift stores on her day off. She spends 1 hour per thrift store, 1 hour in driving time, and finds 15 items. Each item was $4.99, and expects the sale price on Poshmark to be $35. At the time of sale, Poshmark will take a 20% fee of $7. Trish wants to make a least $15 per hour. Is she achieving her goal?

Trish’s Costs:

  1. Time sourcing (4 Hours)
  2. Gas Money (let’s say 2 gallons of gas used at $3.50 a gallon)
  3. $4.99 per piece COG (Cost of Goods)
  4. Time cleaning, photographing, and listing (1/2 hour per piece with 15 pieces, 7.5 hours)
  5. Cleaning supplies ($0.25 per piece, $3.75)
  6. Poshmark fees (20% anything over $15)
  7. Time spent maintaining listings, packaging, and inventory management (15 min per piece, 3.75 hours)
  8. Packaging supplies ($0.25 per piece, $3.75)

Trish’s Gross Profit (assuming everything sold at full price of $35 a piece):

Total of costs: $423.10

  1. Labor Costs (Trish’s time of 15.25 hours at $15 an hour): $228.75
  2. Gas Costs: $7
  3. COG: 74.85
  4. Poshmark Fees $105
  5. Supplies $7.50

Profit – Costs = $101.90! so, YES, Trish is meeting her goal! To find out her hourly rate, take the gross profit and subtract the gas, COG, poshmark fees, and supplies.

Total Dollar Per Hour: $21.68

Now it’s Your Turn

Try the math for yourself! Need help? Contact us @visiblysold on instagram!

Author: Rosie Zbaracki, Co-Owner Visibly Sold

Thrift addict, cat lover, and sustainability advocate. Get more reseller, thrift, and sustainability content on http://www.visiblysold.com or on Instagram!

Published September 2021

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