Prices and Cost of Goods

How Much to Spend / COGs

The first thing to keep in mind when thinking about how much to spend on a single item to resell is how much will the actual profit be? Between eBay and Poshmark, the cut they take is pretty high. Poshmark is easiest with a 20% sales fee, so let's use that as an example. If you buy a shirt priced at $3 to resell, then list it on Poshmark for $20, you might be thinking, hey that's a $17 profit! Think about the $4 (20%) Poshmark is taking, then decide if making $13 is worth it. For me, yes that's worth it. But the buyers are getting savvier and asking for discounts or offering lower prices that are cutting into the profit line. It's easy to decline a low offer when you consider the sales fees; this is all supposed to be bringing in money, so don't ever feel bad for saying no to a low offer.

Baseline, the lower the better, which is why if you are fortunate to live near one, the Goodwill Outlets aka The Bins are such a valuable resource.  Paying by the pound gets your Cost Of Goods (COG) down to just $1 or $2 per item or even lower!  If you end up with a bad buy, it will only have cost you at most a couple bucks, so the risk is worth it.  With time comes experience and you will learn what you're willing to spend on certain items.  Don't feel bad if you pay more than you should have for something.  It happens, even to the best of the best. Something you bought will sell for exactly what you spent on it which is a break even. Or worse, you have to take a loss on it.  It's part of the business, so don't feel bad if it happens. The idea is to let it happen infrequently. Right? Right.

Try sourcing at thrift stores on days when they are having sales and discounts.  I still buy things from Goodwill that aren't the color of the week, as long as the ROI is at least double or triple ... preferably triple based on the selling fees that come out of my cut.  What it boils down to for me is that I try to keep my COG to $10 or less per item. Even over $7, it has to be a really good piece of inventory. Over $10 and I'm most likely at my local chain thrift and buying a designer item.  But if I can sell it for $40 or over, that's not a bad ROI (Return On Investment).

Garage sales will have low COGs for higer ROIs, especially at the end of the day and they want the stuff gone. Keep that in mind when thinking about where to go for inventory. In some parts of the country, Goodwill has amazing sale days like "dollar days" or .99 cent color of the week sales. Goodwill, among other thrift stores, may have discounts for military, students, and/or seniors, so be sure to ask!

Everyone has their own personal COG threshold - I used to too lax about mine and definitely spent too much, but I've learned to let high priced items go if it doesn't fit into my revised COG parameters. So far, the lowest I've ever been able to get something for is .50 cents. My current standard highest price point, with exceptions, is roughly $7-10 and it has to be something I know will sell for at least triple my buy in amount.