On-line clothing reseller cost breakdown

Michael Giberson

Complaints about online clothing resellers “preying” on their customers prompted one reseller to open up about the costs of doing business:

A reseller friend of mine bought a dress at Anthropologie on first cut sale. The dress originally retailed for $138 and was marked down to $69.95. She listed the dress on eBay for its original price of $138. So, she’s making a profit of $68.05, right? WRONG. Here’s how it breaks down.

Dress price: $69.95
California sales tax of 9.75%: $6.82
Fee to list dress on eBay: $0.50
Final value fee on eBay: $14.42
PayPal fee: $4.30
Cost to mail, excluding shipping materials: $4.75 if sent in a USPS flat-rate priority envelope

After you subtract those costs — which do not include the time spent finding the item, photographing the item, listing the item, and shipping the item nor the cost of packing materials, tape, printer ink or shipping labels — the seller has made $37.26.

Also, sellers are obligated to declare this income on their taxes. Self-employment taxes run about 50%; I know this because I’ve filed a Schedule C for the past 8 years or so. So, after paying 50% to Uncle Sam, the seller has a net profit of $18.63!!

There are more examples.

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