Revenue isn't profit. Many resellers think they're doing great because they "made $5,000 last month" without realizing they only profited $800 after costs. Here's how to track what actually matters.

The Profit Tracking Mistake Everyone Makes

Ask a reseller how much they make and you'll usually hear their revenue number. But revenue means nothing without context.

Common Scenario:

"I made $3,000 this month!"

Revenue: $3,000
Cost of goods: -$1,500
Platform fees: -$450
Shipping supplies: -$100
Gas/mileage: -$150
Actual profit: $800

That's a 27% profit margin—not bad, but very different from "making $3,000."

The Essential Metrics to Track

1. Gross Profit

Gross Profit = Sale Price - COGS - Platform Fees

COGS = Cost of Goods Sold (what you paid for the item)

Track this for EVERY sale. It's the foundation of understanding your business.

Example Calculation

Sale Price	$75.00
- Cost of item	-$12.00
- Platform fee (13%)	-$9.75
- Shipping (if you paid)	-$8.00
Gross Profit	$45.25

2. Net Profit

Net profit accounts for ALL business expenses, not just per-item costs.

Net Profit = Gross Profit - Operating Expenses

Operating expenses: supplies, gas, software, storage, etc.

Monthly Operating Expenses to Track

Shipping supplies (boxes, poly mailers, tape)
Gas/mileage for sourcing
Software subscriptions
Storage costs (if applicable)
Equipment (steamer, scale, lighting)
Packaging materials
Returns/refunds absorbed

3. Profit Margin

Profit Margin = (Gross Profit / Sale Price) × 100

Profit Margin Benchmarks

Margin	Rating	Notes
50%+	Excellent	Target for thrift finds
35-50%	Good	Sustainable business
25-35%	Okay	Need volume to profit
<25%	Risky	Little room for error

4. ROI (Return on Investment)

ROI = (Profit / Cost) × 100

ROI tells you how efficiently your money is working. A $10 item sold for $50 has 300% ROI—excellent. A $100 item sold for $130 has 30% ROI—marginal.

ROI vs. Profit:

A $5 profit on a $10 investment (50% ROI) is better capital efficiency than $20 profit on a $100 investment (20% ROI). This matters for scaling.

5. Inventory Turnover Rate

Turnover Rate = Items Sold / Average Inventory

Higher = inventory moves faster = cash isn't tied up

Turnover Benchmarks

4+ turns/year: Excellent cash flow
2-4 turns/year: Healthy
1-2 turns/year: Money sitting in inventory too long
<1 turn/year: Dead inventory problem

6. Sell-Through Rate

Sell-Through = Items Sold / Items Listed × 100

If you list 100 items and sell 30 in a month, your sell-through rate is 30%. This helps identify:

Pricing issues (too high = low sell-through)
Sourcing problems (wrong items = low sell-through)
Listing quality issues (poor photos/titles)

Revenue Per Hour: The Ultimate Metric

This is the metric that tells you if reselling is worth your time.

Revenue Per Hour = Net Profit / Hours Worked

Track Your Time

Sourcing (including drive time)
Photographing
Listing
Packing and shipping
Customer service
Bookkeeping

Example:

Monthly: $2,000 net profit, 40 hours worked

Revenue per hour: $50/hour

If your revenue per hour is lower than what you could earn elsewhere, either improve efficiency or reconsider the business.

Setting Up Your Tracking System

Option 1: Spreadsheet (Free)

A simple Google Sheet or Excel file works for most resellers.

Columns to Include

Date purchased
Date sold
Item description
Source (thrift, retail, etc.)
Cost
Sale price
Platform
Fees
Shipping cost
Profit

Option 2: Dedicated Software

ResellIQ: All-in-one platform with analytics
Vendoo: Basic tracking with crosslisting
SellerDeck: Inventory focused

Option 3: Bookkeeping Apps

QuickBooks Self-Employed: Tax-ready tracking
Wave: Free accounting software
Hurdlr: Expense tracking with mileage

Tax Tracking for Resellers

Important

This is general information, not tax advice. Consult a tax professional for your specific situation.

What to Track for Taxes

Income

All sales (platforms report to IRS if over $600)
Cash sales at local meetups
Any reselling-related income

Deductible Expenses

Cost of inventory (COGS)
Platform fees
Shipping supplies
Mileage (track with an app!)
Home office (if dedicated space)
Software subscriptions
Equipment purchases
Internet/phone (business portion)

Save for Taxes

Rule of thumb: Set aside 25-30% of net profit for taxes. Self-employment tax alone is 15.3%, plus income tax.

When Can You Quit Your Day Job?

The million-dollar question. Here's a framework:

Financial Benchmarks

Before Going Full-Time, Have:

6+ months of consistent income: Not one good month
Net profit = 150% of needed income: Buffer for slow months
Emergency fund: 3-6 months of expenses saved
Health insurance plan: Biggest hidden cost of self-employment
Tax savings account: Don't get caught at tax time

Monthly Income Targets

Level	Net Profit/Month	Status
Side Hustle	$500-1,500	Extra income
Serious Side Gig	$1,500-3,000	Significant contribution
Part-Time Income	$3,000-5,000	Could reduce day job hours
Full-Time Potential	$5,000-10,000	Viable career path
Scaling Business	$10,000+	May need to hire/systematize

Key Metrics Dashboard

Review these numbers weekly:

Financial

Revenue (this week/month)
Gross profit
Net profit
Average profit per item
Average ROI

Operational

Items listed
Items sold
Sell-through rate
Average days to sell
Inventory value

Common Profit Tracking Mistakes

Not tracking at all: You can't improve what you don't measure
Forgetting fees: Platform fees eat 10-20% of revenue
Ignoring shipping costs: Especially if offering "free" shipping
Not valuing time: Your hours have worth
Mixing personal/business: Use separate accounts
Forgetting about taxes: That 25-30% isn't yours to spend

Start Tracking Today

You don't need fancy software to start. A simple spreadsheet tracking every purchase and sale will transform your understanding of your business.

The resellers who succeed long-term are the ones who know their numbers. Start tracking, review weekly, and let data drive your decisions.

Profit Tracking for Resellers: The Metrics That Actually Matter