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?
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?
- Time sourcing (4 Hours)
- Gas Money (let’s say 2 gallons of gas used at $3.50 a gallon)
- $4.99 per piece COG (Cost of Goods)
- Time cleaning, photographing, and listing (1/2 hour per piece with 15 pieces, 7.5 hours)
- Cleaning supplies ($0.25 per piece, $3.75)
- Poshmark fees (20% anything over $15)
- Time spent maintaining listings, packaging, and inventory management (15 min per piece, 3.75 hours)
- 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
- Labor Costs (Trish’s time of 15.25 hours at $15 an hour): $228.75
- Gas Costs: $7
- COG: 74.85
- Poshmark Fees $105
- 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