Step 1 — Record and separate item costs
For pricing decisions, record the purchase price, packaging and an allocated sourcing cost separately. This example combines them into a $7.75 planning subtotal; that does not make all three deductible inventory costs:
| Planning-cost component | Amount |
|---|---|
| Purchase price (thrift) | $4.00 |
| Supplies (box, bubble wrap, tape, label) | $2.50 |
| Share of sourcing mileage | $1.25 |
| Allocated item costs | $7.75 |
Keep sourcing-trip dates, distances and business purposes. The $1.25 allocation is an illustrative planning figure, not a mileage deduction. IRS vehicle guidance (opens in new tab) explains eligibility and records. Do not deduct a travel cost twice.
Step 2 — The sale and the shipping the buyer paid
The item sells for $42, and the buyer pays $12 for shipping. That’s $54 of money arriving in your account — but almost none of it is profit yet. Two things still come out before the allocated item costs: the platform’s fee and the label you buy.
Step 3 — The platform fee
For this example only, assume a fee of 13.25% of the $54 received plus $0.40. That is $7.555 before rounding. These are hypothetical inputs, not a current eBay quote. Check the marketplace fee base, tax treatment, category, per-order charges and actual statement; a default rate may not capture every charge.
Step 4 — The shipping you actually paid
You charged the buyer $12, but the label from the carrier cost you $9.80. The shipping collected exceeds the label cost by $2.20, before packaging and any selling fees on shipping. On many flips it goes the other way: free shipping you offered, or a heavy item that cost more to send than you collected. The point is to track the label you paid, separately from the shipping you charged.
Step 5 — Net the profit and the ROI
Now stack it all up. Start from the money that came in, then subtract the fee, the shipping you paid, and the allocated item costs:
| Estimated contribution | Amount |
|---|---|
| Sale price | $42.00 |
| Shipping charged to buyer | +$12.00 |
| Money received | $54.00 |
| Illustrative fee (13.25% + $0.40) | −$7.56 |
| Shipping you paid | −$9.80 |
| Allocated item costs | −$7.75 |
| Estimated contribution | $28.90 |
The approximately $28.90 contribution excludes any costs not entered, including other overhead, owner time and taxes. Dividing that contribution by the $7.75 allocated subtotal gives about 373%. State that denominator when comparing items; it is not a return on all business capital.
Why this also matters at tax time
IRS Form 1099-K guidance (opens in new tab) explains gross reporting. Reconcile actual transactions, refunds, fees and shipping separately. A planning contribution is not automatically taxable profit.
IRS Publication 334 (opens in new tab) distinguishes inventory costs and expenses. Packaging and sourcing allocations need classification under the applicable accounting method, not simply a single workbook total.
Track every flip in one connected file
The Reseller Flipping Inventory & Profit Workbook records purchases, supplies, sourcing travel, fees and sales. Treat its totals as planning outputs and verify rates and tax classifications separately. The Flip-Profit Calculator can help explore a single example. Compare spreadsheet vs reseller inventory software when marketplace synchronization becomes a separate need.
