The rule
Work backward from the sale, not forward from the tag:
- 1Start with the price you expect it to sell for, based on recent sold comps.
- 2Subtract marketplace fees.
- 3Subtract the shipping label you will pay.
- 4What is left is your net. Subtract the profit you need.
- 5The result is your max buy. If the tag is at or under it, buy. If it is over, pass.
That is the whole idea. The rest is choosing a profit target that keeps you honest.
Choosing a profit target
There are two common ways to set the profit you need, and they protect you in different situations.
- A minimum profit in dollars. For example, never buy anything that makes less than $10. Your time to photograph, list, pack and ship an item is roughly the same whether it sells for $15 or $150, so a dollar floor stops you from filling your shelves with work that pays almost nothing.
- A margin. For example, keep at least half of what you net as profit. A margin scales with the item, so you don't pay $70 for something that nets $80 just because the dollar profit looks fine. It leaves room for the sale coming in under your estimate.
Using both is safest: your max buy is whichever of the two gives the lower number. This is the same rule the Oddlot app uses, with a $10 minimum profit and a 50% margin as the starting point. You can change both.
Worked examples
All three use eBay fees for most categories, a $10 minimum profit and a 50% margin.
- Expected sale
- Jacket$60.00
- Video game$30.00
- Paperback$12.00
- eBay fees
- Jacket$8.56
- Video game$4.48
- Paperback$2.03
- Your shipping
- Jacket$10.00
- Video game$6.00
- Paperback$6.00
- Net
- Jacket$41.44
- Video game$19.52
- Paperback$3.97
- Max buy
- Jacket$20.72
- Video game$9.52
- PaperbackPass
For the jacket, half of the $41.44 net is $20.72, which is lower than net minus $10, so the margin sets the limit. For the video game, net minus $10 is $9.52, lower than half the net, so the dollar floor sets the limit. The paperback nets $3.97, less than the $10 minimum, so there is no price at which it is worth buying for eBay.
Try your own numbers in the max buy price calculator.
Use the expected price, not the best price
Your max buy is only as good as the sale price you start from. Use the middle of recent sold comps for the same item in the same condition, not the single best sale you can find. If you only found one or two matching sales, or the prices are all over the place, lower your max buy or walk away. Our pricing guide covers how to read comps.
Lots, bundles and multiples
The rule works for more than single items. When a shelf has several of the same thing, or a bag at an estate sale holds a mix, price the group the same way: add up what each piece you can identify should sell for, take out fees and shipping per sale, and set your max for the whole lot.
Be conservative with the pieces you can't price. Count them as zero and treat anything they bring in as a bonus. Lots are where it is easiest to talk yourself into a bad buy, because one good item can make a pile of filler look worth it.
Multiples of the same item have one more catch: they compete with each other. Five copies of a game can take much longer to sell than one, and you may have to lower the price to move the last ones. If you buy multiples, base your max buy on a lower expected price, not the price of a single sale.
Costs people forget
- Sales tax at the register. Unless you buy tax-exempt for resale, the tag price plus tax is your real cost.
- Supplies. Mailers, boxes, tape and labels add up across a month.
- Returns. Some buyers return items. Budget for a few lost sales in each category.
- Time on the shelf. Money tied up in slow inventory is money you can't spend on the next good find.
- Repairs and cleaning. Missing parts, batteries and cleaning supplies come out of profit too.
A healthy margin is what absorbs these. That is the main reason to use one.
When to break the rule
Sometimes it is reasonable to pay over your max buy: an item you know sells very fast, a lot where one piece pays for the rest, or a category where you have unusual knowledge. Do it on purpose and keep track of how those buys work out. If the exceptions keep losing money, they weren't exceptions.
Your max buy before the register
The math is simple, but doing it on a phone for every item on a shelf is not. Oddlot does it from a photo: it identifies the find, matches it to current eBay listings, takes out fees and shipping, applies your profit and margin, and shows BUY, SKIP or CHECK with your max buy. The comps are one tap away, so you can see exactly where the number came from.