Is there an easy way to calculate my total profit ?

Savvy_amateur

I have been selling quite a few clothing items on eBay of late and I was wondering as Ebay take the 10% and PayPal 3.4% of the total including postage if there is an easy way for me to calculate how much profit I have made per item. I also sometimes do a discounted or free postage so the buyer does not always cover the postage. I buy the clothes from charity shops
I do not wish to make a fortune doing this just £50 or so a week. Any help appreciated.

soolin

Savvy_amateur wrote: »

I have been selling quite a few clothing items on eBay of late and I was wondering as Ebay take the 10% and PayPal 3.4% of the total including postage if there is an easy way for me to calculate how much profit I have made per item. I also sometimes do a discounted or free postage so the buyer does not always cover the postage. I buy the clothes from charity shops
I do not wish to make a fortune doing this just £50 or so a week. Any help appreciated.

As a business you should already be keeping good records for HMRC, perhaps not on an item by item basis, but accounts nonetheless.

I'm old school, I just use a ledger to record all my costs and my takings and work out my profits from that. However there are online systems that others have recommended to me that do it all for you when you enter the data. For HMRC though you only need basic accounts, all money in, less all money out equals taxable profit.

FatVonD

I use one called finalfeecalc.co.uk

Savvy_amateur

Thank you both. I do not consider this a business I am a housewife non taxpayer who would like to make a little pocket money. I just need an easy way to see if the handful of items I sell is worth the effort.

Sarastro

Take the price you got for the item and subtract all the costs of selling it to get your profit.
Divide this by the total price you got for the item.
This gives profit margin. If greater than zero %, you're making a profit. If less, you're making a loss.

This doesn't include the cost of your time or the original purchase price of the clothes, but it sounds like it's second-hand clothes.

Bottom line is if you don't want them any more and make some profit selling them, then carry on.

Sarastro

Just realised you said total profit. Same formula as above, just add up all the money you get from sales and subtract all your costs, then divide by the first number. That gives your overall profit margin.

soolin

Savvy_amateur wrote: »

Thank you both. I do not consider this a business I am a housewife non taxpayer who would like to make a little pocket money. I just need an easy way to see if the handful of items I sell is worth the effort.

Unfortunately you don't get to choose, the moment you buy to resell you become a business.

If you have no other taxable income though then you won't pay tax, but will still need to submit tax returns to HMRC. Second hand clothing is the one category that will almost certainly get you caught by eBay and HMRC.

forgotmyname

Savvy_amateur wrote: »

Thank you both. I do not consider this a business I am a housewife non taxpayer who would like to make a little pocket money. I just need an easy way to see if the handful of items I sell is worth the effort.

Your selling to make money, you are a business.

Whether its £500,000 or 20p or even at a loss your still a business. Just hope you dont get a call from the tax man asking for your earnings..

If someone has an issue online then i often suggest to the buyer, if they are a business and not registered then mentioning sending a note to the tax man may get results.

theonlywayisup

Savvy_amateur wrote: »

I have been selling quite a few clothing items on eBay of late and I was wondering as Ebay take the 10% and PayPal 3.4% of the total including postage if there is an easy way for me to calculate how much profit I have made per item. I also sometimes do a discounted or free postage so the buyer does not always cover the postage. I buy the clothes from charity shops
I do not wish to make a fortune doing this just £50 or so a week. Any help appreciated.

As above re the business status. You don't get a choice. You are in business.

That aside. Just picking up on your OP. Paypal charge 3.4% (on a sliding scale depending on turnover) PLUS 20p fee per transaction. If you are selling items under £10 it may work out cheaper for you to consider sending those payments through a Paypal Micro account. The transaction fee is more but the percentage lower. From memory the 'sweet spot' of item sale is around £7.50 but if you google it, you may find the exact amount.

Ebay charge their percentage on the total price including postage. I say that as it's not entirely clear in your OP if you understand that.

soolin

For the purposes of MSE I assume you will not continue defrauding HMRC and buyers and will properly register. As such a set of general accounts will actually suit you better as it accounts for all your costs, and doesn't just show profit on an item by item basis which ignores other potential issues.

I'm terrible at explaining things, but if you do it item by item you may well get an inflated figure as not everything will sell . You also have the issue of returns and losses, and selling second hand clothing is a very high risk category especially for returns. If you do it as per my suggestion above all these other costs will be picked up, so although you might see yourself making £2 say an item , taking into account unsold and returns where you lose postage that might overall reduce to an average of £1.50 an item which gives you a much clearer view of the situation.

A business seller on eBay also pays insertion fees whether item sells or not so they will be picked up in a set of basic accounts as well.

Lastly as mentioned above clothes are a minefield so you need a cast iron returns policy. The minimum time you can give is 14 days for change of mind and to,protect yourself you need to add a proper policy that spells out that for change of mind returns buyer pays return postage. That will safeguard you from buyers trying to be clever with returns if they merely change their mind.

Savvy_amateur

This is all sounding very complicated. So far I have sold items from my wardrobe and only spent £29 actually buying anything from the charity shop to sell on. I have not yet listed the items that I have purchased as they are in the process of being washed and ironed. that is why I have asked the question about trying to see if I am making any profit and if it is worth continuing. I understand from your replies that it is a business whether it makes a profit or not. I really need to look into this further as I am unsure what to do with a tax return. I have so many questions that I need to ask.....