Keeping Track of Fees and Profit
May 13, 2025
Resellers often make the mistake of looking only at sales totals without accounting for the hidden costs that eat into their profit. Between platform fees, payment processor deductions, shipping charges, and inventory costs, it can be hard to know if you’re truly making money. A structured system for tracking every expense tied to each order is essential for sustainable growth.
Why Tracking Fees and Profit Matters
Without accurate accounting, it’s easy to overestimate profit margins. For example, you may think you earned $50 on a sale but forget that $15 went to shipping, $8 to platform fees, and $3 to payment processing. Your true profit was only $24. Knowing this difference helps you decide which products are worth reselling and which platforms yield better returns.
Identifying the Major Cost Categories
Inventory Cost: The amount paid for the product, including sourcing and acquisition expenses.
Platform Fees: Sales commissions, listing fees, final value fees, or subscription costs applied by the selling platform.
Payment Processing Fees: Percentage and fixed fees charged by services like PayPal or Stripe when funds are deposited.
Shipping & Packaging: Actual postage costs, packaging material, and insurance if applicable.
Operational Costs: Overheads such as marketing tools, bookkeeping software, or storage.
Building a Centralized Ledger
A reliable method is to use a centralized ledger that automatically links each order to its associated costs. This ledger should update in real-time and categorize costs systematically. A manual spreadsheet works if your sales volume is low, but as you grow, automation will save hours of time and improve accuracy.
Practical Tools and Approaches
At a basic level, spreadsheets like Google Sheets or Excel give flexibility to design your own ledger with formulas that subtract every fee from the order's sale price. For more automation, platforms like Gavelbase can link sales transactions directly with logged fees and shipping costs, reducing manual entry and minimizing errors. General accounting software such as QuickBooks or Xero can also integrate for higher-level financial reporting, though you may need to customize categories for reseller-specific use.
Step-by-Step: Setting Up Fee Tracking
Create Order IDs: Give each transaction a unique identifier. This allows you to attach all related expenses to the correct order.
Log the Gross Sale: Record the total selling price including shipping charged to the buyer.
Subtract Platform Fees: Deduct listing and final value fees, plus any membership cost if applicable.
Account for Payment Processing: Subtract the transaction percentage and flat fee from PayPal, Stripe, or other gateways.
Deduct Shipping: Record postage, labels, insurance, and packaging costs.
Include Inventory Cost: Input what you paid for the product itself.
Calculate Net Profit: The final line should summarize: Gross Sale – All Costs = True Profit.
Automating Cost Capture
Automation reduces manual workload. Many resellers find success by setting up rules that apply fees automatically based on platform payout reports or shipping software data. For instance, when PayPal deposits a payment, the attached fees can be imported into your ledger. Tools like IFTTT or Zapier can connect your sales channels, payment processors, and spreadsheets for automatic updates, ensuring your profit calculation is instantaneous.
Analyzing Your Profit Margin
Once you have a complete picture, you can calculate percentages to understand profitability better. For example:
Profit Margin = (True Profit ÷ Gross Sale) × 100%
Products with consistently low profit margins may not be worth sourcing again. Likewise, items with high margins highlight strong opportunities.
Best Practices
Record Expenses ASAP: Enter fees and costs daily or automate imports to avoid missing details.
Use Categories: Label fees by type (inventory, platform, processing, shipping) for easier analysis.
Review Monthly: Evaluate which products and platforms perform best at the end of every month.
Keep Receipts: Retaining supporting documents is crucial for tax reporting and audits.
Final Thoughts
Profitability in reselling is not just about making sales—it’s about understanding the numbers behind those sales. By creating a central ledger, automating fee tracking, and reviewing your true profit regularly, you can make informed business decisions, avoid underpriced listings, and scale sustainably. Tools ranging from spreadsheets to automation platforms, with specialized options such as Gavelbase, give resellers flexible ways to stay financially in control. The goal isn’t just to sell more, but to profit wisely with every order you ship.