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GlossaryDefinitionPart of: How to Calculate Reselling Profit: The Complete Guide

Gross Margin vs Net Margin

One flatters you. The other pays for stock.

By reva editorial teamUpdated 5 min read
A 250 zł resale sale split into direct costs, fees, packaging and net profit with both margin lines marked
Key takeaways
  • Gross margin = (sale price − direct costs) ÷ sale price. Net margin = net profit ÷ sale price, after fees, postage you pay, packaging and supplies.
  • Example: a 250 zł sale with 135 zł direct costs, a 22.50 zł fee, 8 zł packaging gives 46% gross margin and 33.8% net margin — a 12-point gap on one flip.
  • Fixed per-order fees hit cheap sales hardest: a 1.35 zł fee is 2.25% of a 60 zł sale but 0.2% of a 600 zł sale.
  • Price and mark down against margin; rebuy and compare categories against net margin — ideally net profit per day held.
  • Record every cost line per flip, or your net margin is a guess with decimals in it.

Gross margin is the share of the sale price left after the item's direct costs; net margin is what survives after every cost of the sale — fees, postage, packaging, supplies. In reselling the gap between the two is where flips quietly stop being worth it: the gross number flatters, the net one pays for your next batch of stock.

Below: which cost goes where, one flip traced through both margins, and the decision each is good for.

Gross margin vs net margin: the cost line

gross margin = (sale price − direct costs) ÷ sale price net profit = sale price − direct costs − fees − postage you pay − packaging − other sale costs net margin = net profit ÷ sale price

Direct costs are what the item cost to buy and make sellable: the purchase price, cleaning, small repairs, the inbound bus fare. Everything that exists only because you sold the piece — commission, per-order fees, the label you bought, the mailer — sits after the gross line. The full cost discussion is in hidden costs of reselling; how this splits into COGS is in COGS for resellers.

  • Purchase price, cleaning, repair → direct costs (inside gross margin)
  • Marketplace commission and fixed per-order fees → sale costs
  • Postage you pay, packaging, thank-you cards → sale costs
  • Your hours → not a cost line, but count them when you compare flips

Worked example: one flip, both margins

You buy a coat for 120 zł and spend 15 zł cleaning it: 135 zł direct. It sells for 250 zł on a marketplace charging an example 9% fee (22.50 zł), and the mailer costs 8 zł; the buyer pays postage.

  • Gross profit: 250 − 135 = 115 zł → gross margin 46%.
  • Net profit: 250 − 135 − 22.50 − 8 = 84.50 zł → net margin 33.8%.

Twelve points vanished between the two lines, and nothing about the flip changed.

One 250 zł flip, from sale price to net profit
Sale price250 zł
  • Direct costs (coat + cleaning)135 zł
  • Marketplace fee, example 9%22.5 zł
  • Packaging8 zł
  • Net profit84.5 zł
Illustrative example. Gross margin reads the bar after direct costs (46%); net margin reads what is left at the end (33.8%).Illustrative example, not market data

Why marketplaces make gross margins lie

Fee lines do not shrink in step with price. A percentage fee scales, but the fixed per-order fee does not: a 1.35 zł fixed fee is 2.25% of a 60 zł sale and 0.2% of a 600 zł sale. Sell cheap, and the spread between your margins widens — gross margin keeps looking fine while net margin drops. Tiered rates push the same way. Before pricing from a percentage you heard, run the real line-up through the marketplace fee calculator.

Which margin to use for which decision

  • Rebuying a category: net margin, per day. Only net money buys the next batch, and time is part of the cost. Example: 40 zł net in five days is 8 zł a day; 90 zł net over six weeks is barely 2 zł a day.
  • Pricing and markdowns: margin. Percentage fees move with the price, so margin shows roughly what a cut leaves behind.
  • Your records: net. If the ledger only shows purchase price and sale price, your net margin is a guess with decimals in it.

Run both numbers on your own flip:

Resale profit calculator
Fees€0
Net profit€36.50
Profit margin60.8%
ROI on cost165.9%
Enter the fee you pay.

The calculator takes purchase cost, extra costs, sale price, the fee percentage and fixed fee, shipping and other costs, and returns fees, net profit, margin and ROI on cost. The tool version is the resale profit calculator.

Margin is one of three percentage bases — where ROI and markup divide different numbers is in ROI vs margin. What counts as a good target, and why copied averages mislead, is argued out in what is a good profit margin for reselling. The parent page for all of it: the resale profit guide.

Frequently asked questions

What is the difference between gross and net margin?
Gross margin subtracts only the item's direct costs — what you paid for it and spent making it sellable. Net margin subtracts everything: those direct costs plus marketplace fees, postage you pay, packaging and any other cost of making the sale. On a 250 zł sale with 135 zł of direct costs and 30.50 zł of selling costs, gross margin is 46% and net margin is 33.8%. Both are true; only the second pays for your next batch of stock.
Do marketplace fees count in gross margin?
No. Percentage commissions, fixed per-order fees and postage belong to the cost of making the sale, so they sit between gross and net. That placement is exactly why a healthy-looking gross margin can hide a thin flip: on a 60 zł sale a 1.35 zł fixed fee alone takes 2.25%, while on a 600 zł sale the same fee is 0.2%. The cheaper the item, the more the fee lines matter.
Which margin should I use to price items?
Use margin, in the gross sense, for pricing decisions: percentage fees scale with price, so testing a markdown against margin shows roughly what survives the cut. Use net margin for decisions about the business — whether to rebuy a category, whether a flip was worth the days it took. Pricing asks 'what share of this price can I keep'; rebuying asks 'what did this flip actually leave in my account'.
What is a healthy net margin for reselling?
There is no published number worth copying, because the right target depends on your capital, your hours and how long stock sits. Build your own floor from history: note the net margin and days-to-sale of past flips you would not repeat, and set the floor just above them. Then compare categories by net profit per day rather than by margin alone — 40 zł in five days beats 90 zł in six weeks.
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