You found a vintage Nike windbreaker at the thrift store for $8. You’re pretty sure it’s worth something. But is it actually a good flip? And more importantly, how much will you actually pocket after fees, shipping, and everything else?
Most new flippers make the same mistake: they see the sale price and think that’s their profit. Spoiler alert: it’s not even close.
Let’s break down the real formula for calculating flip profit so you never get surprised by a “winning” flip that barely breaks even.
The Basic Flip Profit Formula
Here’s the formula every reseller needs to memorize:
Net Profit = Sale Price - (Purchase Price + Platform Fees + Shipping Cost + Packaging + Other Costs)
Sounds simple enough, right? But the devil is in the details. Let’s walk through each piece.
Breaking Down Each Cost
1. Purchase Price (Your Buy-In)
This one’s obvious. It’s what you paid for the item. But don’t forget to include:
- Sales tax at the store
- Gas money if you drove specifically to source
- Auction fees if you bought at an estate sale
That $8 thrift store jacket might really be $8.50 after tax. Small difference, but it adds up.
2. Platform Fees (The Silent Profit Killer)
Every platform takes a cut. Here’s roughly what you’re looking at:
- eBay: About 13-15% total (final value fee + payment processing)
- Poshmark: Flat 20% on sales over $15
- Mercari: 10% + payment processing
- Facebook Marketplace: Free for local, 5% for shipped items
- Depop: 10% + payment processing
If you sell that jacket for $45 on eBay, you’re losing around $6-7 just in fees.
3. Shipping Costs
This one trips up a lot of people. You have two options:
Buyer pays shipping: You’re off the hook, but your item might sell slower or for less.
Free shipping (you pay): More attractive to buyers, but you need to bake this into your price.
A typical jacket ships for $8-12 via USPS Priority Mail. If you’re offering free shipping, that comes straight out of your profit.
4. Packaging Materials
Poly mailers, boxes, tape, tissue paper, thank you cards. It’s usually $1-3 per item depending on what you’re shipping. Most people forget this one entirely.
5. Other Costs
Think about:
- Cleaning supplies
- Repair costs (missing buttons, small fixes)
- Photography equipment (lights, backdrops)
- Storage costs if you’re scaling up
Real Example: That Nike Windbreaker
Let’s run the numbers on our thrift store find:
- Sale Price: $45
- Purchase Price: $8.50 (including tax)
- eBay Fees (13.25%): $5.96
- Shipping: $9.50 (Priority Mail)
- Packaging: $1.50
Net Profit = $45 - ($8.50 + $5.96 + $9.50 + $1.50) = $19.54
So that $45 sale actually puts $19.54 in your pocket. That’s a 43% profit margin, which is solid. But notice how different that is from the $36.50 “profit” you might have calculated if you just did $45 - $8.50.
The ROI Calculation
Want to know if a flip is actually worth your time? Calculate your ROI (Return on Investment):
ROI = (Net Profit / Total Cost) x 100
For our windbreaker:
- Total Cost: $8.50 + $5.96 + $9.50 + $1.50 = $25.46
- ROI = ($19.54 / $25.46) x 100 = 76.7% ROI
Generally speaking:
- Under 50% ROI: Probably not worth the effort unless it’s high volume
- 50-100% ROI: Decent flip
- 100%+ ROI: Great flip, you doubled your money
- 200%+ ROI: Home run, these are the flips you hunt for
The Minimum Profit Rule
Here’s a rule that’ll save you from wasting time on bad flips:
Set a minimum profit threshold and stick to it.
For most part-time flippers, $10-15 minimum profit makes sense. Why? Because every flip takes time:
- Sourcing and buying: 5-10 minutes
- Cleaning and photographing: 15-30 minutes
- Listing: 10-15 minutes
- Packing and shipping: 10-15 minutes
That’s 40-70 minutes per item. If you’re only making $5 profit, you’re basically working for less than minimum wage.
Quick Mental Math for Sourcing
When you’re standing in the thrift store trying to decide if something’s worth buying, you don’t have time for spreadsheets. Here’s a quick mental framework:
“Can I sell this for at least 3x what I’m paying?”
If yes, it’s probably worth a closer look. If no, move on.
This 3x rule accounts for fees, shipping, and leaves room for profit. It’s not perfect, but it’s fast and keeps you from making bad buys.
Why Most Flippers Get This Wrong
The biggest mistake I see? People calculate profit based on the sale price minus purchase price. They completely ignore fees and shipping.
Then they’re shocked when their PayPal or bank account doesn’t match their “profits.” They had a $500 sales month but somehow only have $200 more in their account.
The fees add up. On a typical eBay month, 25-35% of your gross sales goes to fees, shipping, and costs. That’s not a small number.
Tools That Do The Math For You
Look, doing this math manually for every potential flip gets old fast. That’s exactly why profit calculators exist.
The best ones let you plug in your buy price and expected sale price, then automatically factor in platform fees, estimated shipping, and other costs to show you the real profit.
No more spreadsheets. No more surprised Pikachu face when your “profit” disappears into fees.
The Bottom Line
Flip profit isn’t complicated once you understand all the pieces. The formula is simple:
Net Profit = Sale Price - All Costs
The hard part is remembering to include ALL costs: purchase price, platform fees, shipping, packaging, and any extras.
Get this right, and you’ll finally have an accurate picture of what you’re actually earning. No more guessing, no more surprises, just real numbers you can build a business on.
Now go find that next flip. And this time, you’ll know exactly what it’s worth before you buy it.