When you purchase from a supplier, you have to take into consideration not only the wholesale cost of the item itself, but the cost of shipping to get it to your house or warehouse, the fees you pay through Amazon or eBay, and the cost of shipping to get it to your customer if you’re shipping it yourself. These all need to be subtracted from the retail price, the price you’re selling it for, so you can make sure you are making money.
If you don’t know your numbers, you could be making 2 cents an item and not realize it. You’d be wasting your time.
What I did is created a spreadsheet, tweaked and adjusted it over time, and it’s really helped me to determine profits. I’d love to share it with you.
Here is the template spreadsheet I use. You can see I’ve color coded my items on the left, so you can see green items are selling on eBay and blue are on Amazon. These are examples of items I might sell. Let’s start with the wooden bowl.
Profit Margin %: This is your Total Profit divided by Total Cost, or the percentage of your cost that will be turned into profit.
Wholesale Source: I put the link to where I found my supplier here.
Wholesale Cost: This is the cost of the item itself that I paid to the supplier; here it is $10.
Wholesale Shipping: This is the shipping cost to get the item from the supplier to me. How did I know it was $8.25? I took the total cost of shipping and divided it by the number of items I ordered. So if I ordered 100 yarn bowls, and the cost just to get them shipped to me was $825, I would divide it by 100 to get the cost of shipping per bowl: $8.25.
Retail Shipping Lost: If I am shipping the item myself, this is how much it costs me to ship it by USPS to someone in the United States. This cost might vary depending on where you send it. For this item, it costs $2.22 to ship.
Amazon Fee: Since this item is only selling on eBay, there is no Amazon fee, so we’ll leave it blank.
eBay Fee: The fee to sell this item on eBay is $4.95. How did I calculate this? It’s very simple, I made a formula. eBay fees are 15% of the retail price, the price you sell it for on eBay. This includes the around 10% eBay fee plus the PayPal fee of 5%. So you create this formula: 0.15 * Retail Price. On Numbers, I hit the = sign on my keyboard, then types in 0.15, Shift+8, which creates *, then clicked on the “Retail Price” box. You can also do this in Excel on Windows.
Total Cost Including PayPal Fees: This is another formula: it adds up all the costs, all the things you had to pay for. This includes the wholesale cost, the wholesale shipping, retail shipping loss, and eBay fee. It’ll give you your total cost, which for this item is $25.42.
Retail Price: This is what you are selling your item for. This has to be larger than your total cost so you know you are making a profit!
Retail Shipping Gain: If you charge shipping, this is the cost the customer pays, aside from the retail price, for shipping. If I put it at $3.00 to cover shipping costs, and the customer pays it, but it actually only costs me $2.22 to ship, I end up gaining 78 cents, so I need to include it in my spreadsheet.
Profit: This is how much money you are making extra on each sale. It’s a simple formula: Retail Price minus Total Cost, plus Retail Shipping Gain. So what the customer payed you for the item and the shipping minus how much you paid in costs and fees; the leftover is your profit.
Total Quantity: This is the total number of items I purchased; 250 for this item.
Total Cost: This is the total, final cost for me. It is the Total Cost (for the item) multiplied by the Total Quantity. So in all I spent $6355 on this order.
Total Revenue: This is all the money that came back to me, everything I earned back. This would be the Retail Price times the Total Quantity.
Total Profit: This is how much new money you made, aside from making back your cost. This is going to be your Profit times the Total Quantity. So I can make $2600 in total profit if I buy just 250 of these wooden yarn bowls.
Let’s say you’re selling an item on Amazon instead of eBay. We already went through the columns, but there are a few key differences.
Amazon Fee: If you’re selling your item through FBA, you’re going to pay around a 33% fee off of your retail price. So hit the = button, type in 0.33 * and then click the box for Retail Price. So for this item, the fee is going to be around $4.95.
In this case, my retail shipping loss is going to be 0 since I am shipping it to Amazon FBA and they pay for shipping costs to ship it to customers. There’s around a $4 or $5 cost to ship an entire whole box of items into FBA but I usually don’t include this because it’s such a small one-time fee. I’m also going to change the Retail Shipping Gain to 0, because when customers order FBA, you as the seller don’t receive the money they pay for shipping, only the cost of the item.
So if I buy a total of 500 of these toothbrushes, making a profit of $2.82 each, I’m going to make a total of $1408.25 in profit. This is an quick and easy way to see how much profit you are going to make overall.
I hope this is helpful to you! I took a single dime and turned it into $100,000 by doubling it over and over again, and there is something so satisfying about that. I want to help you do the same.
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Married a pearl. Fathered 4 miracles. Fired his boss. Turned a single dime into $104,857. Today, a self-made millionaire, Seth and his team of 8 badass coaches teach entrepreneurs how to build passive income on Amazon.
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