You bought a vintage Nintendo 64 for $25 at a garage sale. Sold it for $120 on eBay. Made money, right?
Well, yeah. But how much? And more importantly, was it worth your time?
This is where most resellers get fuzzy. They know they’re “making money” but they don’t know their actual return on investment. And that matters because ROI tells you whether your flipping hustle is a real business or just an expensive hobby.
Let’s fix that.
The Basic ROI Formula
ROI stands for Return on Investment. The formula is simple:
ROI = (Profit / Cost) x 100
If you spent $25 and made $50 profit, your ROI is 200%. You doubled your money.
Sounds easy, right? The tricky part is calculating your actual profit.
What Most People Get Wrong
Here’s how a typical beginner calculates their N64 flip:
- Bought for: $25
- Sold for: $120
- “Profit”: $95
They stop there and think they made $95. They did not.
The Real Cost Breakdown
Let’s recalculate with all the actual costs:
Purchase price: $25
eBay final value fee (13.25%): $15.90
Payment processing (about 3%): $3.60
Shipping cost: $14 (you offered free shipping, remember?)
Shipping supplies: $3 (box, tape, bubble wrap)
Gas to the garage sale: $4 (be honest)
Total costs: $65.50
Actual profit: $54.50
Your ROI isn’t 380%. It’s actually:
($54.50 / $65.50) x 100 = 83%
Still good! But very different from what you thought.
The Costs You’re Probably Forgetting
Platform Fees
Every selling platform takes a cut:
- eBay: 13-15% depending on category
- Poshmark: 20% flat
- Mercari: 10% + payment processing
- Facebook Marketplace: Free for local, 5% for shipping
These add up fast. A 15% fee on a $100 sale is $15 gone immediately.
Payment Processing
On top of platform fees, you usually pay another 2.9-3% for payment processing. Some platforms bundle this, others don’t. Know what you’re paying.
Shipping
If you offer free shipping (which often helps items sell faster), that cost comes directly from your profit. A heavy item can eat $15-20 easily.
Even if the buyer pays shipping, you might be undercharging. USPS and UPS rates change constantly.
Supplies
Boxes, poly mailers, tape, tissue paper, thank you cards, printer ink for labels. These costs are small per item but they’re not zero.
Time
This is the big one nobody talks about.
If you spend 45 minutes sourcing, photographing, listing, and shipping an item, and you make $30 profit, you’re earning $40/hour. Great.
But if that same process takes 3 hours because you’re chatting with buyers, dealing with returns, and making multiple trips to the post office? Now you’re at $10/hour.
Time isn’t technically part of the ROI formula, but it should be part of your decision making.
The Formula I Actually Use
Here’s my real profit calculation:
Actual Profit = Sale Price - Purchase Price - Platform Fees - Payment Fees - Shipping Cost - Supplies - (Hourly Rate x Hours Spent)
That last part is optional but eye-opening. If you value your time at $20/hour and spend 1 hour on an item, that’s a $20 cost to factor in.
Quick ROI Guidelines
After doing this for a while, I have mental benchmarks:
- 200%+ ROI: Excellent. Buy more of these.
- 100-200% ROI: Good. Worth doing.
- 50-100% ROI: Okay. Only if it’s fast and easy.
- Below 50% ROI: Generally not worth it unless the item moves fast.
These assume you’re not counting labor. If you factor in time, adjust your thresholds up.
The Hourly Rate Reality Check
Let’s say you want to make at least $25/hour from flipping (reasonable goal).
If an item takes 1 hour total (sourcing, photos, listing, packaging, shipping), you need to profit at least $25.
Working backwards:
- Target profit: $25
- You need to buy items where: Sale Price - All Costs > $25
This changes how you source. That $5 profit flip isn’t worth it. The $40 profit flip is.
ROI vs. Absolute Profit
Here’s something that trips people up: a high ROI doesn’t always mean more money.
Scenario A: Buy for $5, sell for $20, profit $10 after fees. ROI = 200%
Scenario B: Buy for $50, sell for $120, profit $45 after fees. ROI = 90%
Scenario A has better ROI but Scenario B made you more actual money.
Both metrics matter:
- High ROI = Good use of capital
- High absolute profit = Good use of time
Ideally you want both. But if you have to choose, time is usually the bigger constraint for most flippers.
Tracking Your Numbers
You absolutely need to track this stuff. Every item, every cost, every sale.
Why? Because your brain lies to you.
You remember the $80 profit flip. You forget the three items that sold at break-even. Without data, you’ll think you’re doing better (or worse) than you actually are.
At minimum, track:
- Item name/description
- Purchase price and date
- Sale price and date
- All fees
- Calculated profit
- Category
After a few months, you’ll see patterns. Maybe vintage clothing gives you 150% ROI on average but takes forever to sell. Maybe electronics are only 75% ROI but move in days.
That information helps you make better sourcing decisions.
A Real Example From My Inventory
Here’s an actual flip I did last month:
Item: Vintage Patagonia fleece jacket Purchase price: $12 (thrift store) Sale price: $75 (eBay) eBay fees: $9.94 Payment processing: $2.25 Shipping: $9.50 Supplies: $2 Total costs: $35.69 Profit: $39.31 ROI: 110% Time spent: About 40 minutes total
Profit per hour: $59. I’ll take that all day.
The Compound Effect
Here’s why tracking ROI really matters: it compounds your decision making over time.
If you consistently flip items with 100%+ ROI and track what categories perform best, you get better at sourcing. Better sourcing means finding more profitable items in less time.
A year from now, you’ll be passing on items that “beginner you” would have bought. And you’ll be making more money while spending less time sourcing.
That’s the real power of knowing your numbers.
Stop Guessing, Start Calculating
Look, I get it. Doing math for every flip feels tedious. But you don’t have to do it manually.
Set up a simple spreadsheet. Or use a tool like our Flip Tracker that calculates profit and ROI automatically when you enter your costs and sale price.
The flippers who make real money treat this like a business. That means knowing your margins, your ROI, and your hourly rate.
Everything else is just hoping.