How to work out item margins from a bulk lot

1. Start with your total landed cost

Your landed cost is everything you paid to get the lot into your home and ready to sort. It's almost always more than the headline price.

• The price you paid for the lot itself
• Delivery or courier charges to you
• Any fee or buyer's premium charged to you as the buyer (common at auctions)
• Travel and parking if you collected it — be honest with yourself here
• Anything you had to buy to make the stock sellable, such as a lint roller or stain remover, if it was bought specifically for this lot

Add these together. This is the figure that has to be recovered from your sales before you've made a penny.

2. Count what you can actually sell

Unpack everything and check each item in good light. Look for stains (especially underarms and collars), holes, pulled threads, broken zips, missing buttons, heavy pilling, fading and smells. Sort into three piles:

1. Sell individually — good enough to list on its own
2. Bundle — fine, but only worth selling grouped with similar items
3. Not sellable — recycle, donate or use for photos and practice

The number in the first two piles is your sellable count. It's normal for a mixed lot to contain some items you can't sell — what matters is that you count them before you price anything.

3. Spread the cost across sellable items

The simplest method is an equal split: divide your total landed cost by the number of sellable items. Unsellable items get no cost of their own — their cost is absorbed by the items you can sell, which is exactly what happened to your money.

An equal split works well when items are broadly similar. If one piece is clearly worth far more than the rest — say a good wool coat in a bundle of basic tops — a weighted split is fairer. Estimate a realistic sale price for each item, add those up, and give each item a share of the cost in proportion to its expected price.

4. Work out the margin per item

For each item, take the price you expect to sell at and subtract its share of the lot cost plus the costs of selling it: any fees charged to you, postage you pay, and packaging. What's left is your profit on that item. Divide it by the sale price to get your margin.

5. Plan for not selling everything

Few lots sell out completely. A useful habit is to estimate what percentage of sellable items you'll realistically sell within, say, three months. This gives you two different numbers, and both matter:

• Profit on items sold — sale revenue minus selling costs minus the cost assigned to those sold items. This tells you whether your pricing works.
• Cash position — sale revenue minus selling costs minus everything you spent on the whole lot. This tells you whether you've got your money back yet.

It's common for sold items to be profitable while your cash position is still negative. The difference is money tied up in unsold stock. That's fine for a while, but it's worth watching — stock that never sells is a cost, not an asset.

Quick checklist before you buy the next lot

• Have I included delivery and any buyer fees in the cost?
• How many items am I confident are sellable from the photos?
• What will I realistically sell them for, based on sold listings — not asking prices?
• If only half sell in three months, do I get my money back?