Reviewed and revised — 12 September 2026. This article has been updated to correct unsupported claims and reflect the current enquiry-based offer. Its original publication date and URL are retained.
A sale above purchase cost is not automatically a profitable item. Marketplace charges, shipping, refunds and the work involved can change the result substantially.
Name the measure
Markup compares the difference with purchase cost. Gross margin compares it with revenue, using a defined cost-of-goods basis. Contribution after selling costs is another measure. None of these is automatically net business profit after overheads.
Work through an example
Suppose an item retains A$100 of merchandise revenue and cost A$40 to acquire. Before other costs, the A$60 difference is a 60% gross margin on that simple basis, or 150% markup on acquisition cost.
If chosen selling and fulfilment costs total A$20, A$40 remains before labour, overheads and tax. These are illustrative inputs, not typical category margins or current marketplace fees.
Keep reversals visible
Use retained revenue after recorded cancellations and refunds. Avoid counting an order that was fully reversed as a profitable sale. Where costs are not yet known, label the result provisional rather than filling the gap with zero.
Check the purchase decision
Record the likely selling range, fees, condition work, shipping and downside scenario before buying. Use the fee calculator with the relevant account assumptions. A hoped-for asking price is not an achieved sale.
Include time and capital
Track how long the item takes to prepare and sell. A margin percentage alone can hide a small dollar return or a large amount of work. Compare your own completed transactions by category rather than relying on unsourced universal margin bands.
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