What is a good profit margin for reselling?
For resale, a net margin of 30-50% is healthy and anything above 50% is strong. Below 20% you have almost no room for a return, a discount or a rise in postage.
That number is lower than the margins quoted in general retail advice, and deliberately so. Resale carries platform commission, payment processing, shipping that is frequently underpriced, and a return rate that is higher than most sellers assume.
Gross margin vs net margin
Gross margin is price minus what the item cost you. Net margin is what is left after the platform fee, payment processing, packaging, postage and advertising. Sellers usually know their gross margin and guess at their net margin, which is why a shop that "looks like 60% margin" can end the month flat.
On a $45 item that cost you $13 to source, gross margin is 71%. Run it through a marketplace with a 13% commission, payment processing, and $6 of actual postage and packaging, and the net margin lands nearer 44%. Same sale, very different business.
Benchmarks by category
| Category | Typical net margin | Why |
|---|---|---|
| Clothing resale | 40-60% | Low sourcing cost, but sizing returns are common. |
| Vintage and collectibles | 50-70% | Sourcing advantage matters more than the fee. |
| Handmade goods | 30-50% | Materials plus real labour hours, not just materials. |
| Electronics and phones | 10-20% | High item cost, thin percentage margin, real return risk. |
| Print on demand | 15-30% | Base cost plus shipping is set by the supplier. |
| Dropshipping | 10-25% | Ad cost, not product cost, usually decides profitability. |
Treat these as starting points, not targets. A category with a low average margin still works if you buy better than everyone else in it.
The three numbers that actually decide it
- Net margin — how much of each sale you keep. This is what the comparison tool reports per platform.
- Profit per unit — margin percentage alone is misleading. A 60% margin on a $10 item is $6. A 20% margin on a $120 item is $24.
- Return on cost — profit divided by what you spent to make the sale. It tells you whether the money tied up in that item is working.
What usually pushes a margin below 20%
- Underpriced postage. Charging $4 to ship a parcel that costs $7 to send wipes out a fifth of a $15 item.
- Ignoring returns. A 5% return rate on a 25% margin removes a fifth of your profit before you notice.
- Discount culture. A permanent 15% off code is a permanent 15% off your margin.
- Fixed fees on cheap items. A $0.45 fixed fee is 3% of a $15 sale and 0.2% of a $200 one.
How to check your own numbers in a minute
Open the calculator for the platform you sell on, enter a real recent sale including what you actually paid for postage, and look at the break-even price at the bottom. If your normal selling price is close to break-even, the problem is pricing, not demand.
Then change one variable at a time: add a 15% ad rate and see what happens, then add a 5% returns reserve. Most sellers find the ad rate moves the result more than any fee they have been worrying about.