DHGATE EDIT · PRACTICAL RESEARCH

How to calculate resale profit and break-even

By DHgate Edit · Published and updated 31 October 2026

To estimate resale contribution, subtract all relevant variable costs and transaction fees from the sale price. To find the break-even price, divide fixed per-unit costs by one minus the percentage fee rate. The calculation is useful only when you record what is included and keep every input on the same basis.

This guide supports the DHgate reselling workflow, but the arithmetic works for other sourcing channels too. It does not establish whether a product may be sold or whether buyers will pay your proposed price.

Start with one unit and one currency

Write down what one sellable unit costs: item, allocated inbound shipping, applicable import charges, packaging and delivery to the buyer. Add fixed payment charges and an allowance for returns. If the supplier quotes shipping for ten units, divide it across ten sellable units only when that matches the order. If two units are unusable, the remaining eight carry more of that batch cost.

Convert costs into one currency using the amount you actually pay where known. Do not combine a USD product quote with a different-currency shipping figure without conversion. A marketplace’s displayed exchange rate may differ from your payment provider’s final charge.

Separate percentage fees from fixed costs

Let P be the sale price, f the percentage fee expressed as a decimal, and C the sum of fixed per-unit costs. Estimated contribution is P × (1 − f) − C. Contribution margin is that amount divided by P. At a zero sale price the margin percentage is undefined, even though the monetary loss can be calculated.

This simplified model assumes the percentage fee applies to the entered sale price. If your marketplace charges on a different base, calculate that fee separately or adjust the model. Do not enter the same fee in both the percentage field and fixed costs.

A complete worked example

At P = $50 and f = 13%, percentage fees are $6.50. Contribution is $50 − $6.50 − $39.30 = $4.20. Margin is $4.20 ÷ $50 = 8.4%. These are hypothetical inputs, not a current seller offer, marketplace fee schedule or expected earnings.

Break-even and target margin are different questions

Break-even is C ÷ (1 − f). Here that is $39.30 ÷ 0.87 = approximately $45.1724. Round the required sale price upward to $45.18. Rounding downward can leave a small loss.

For a target contribution margin m, required price is C ÷ (1 − f − m). A 20% target with a 13% fee gives $39.30 ÷ 0.67, rounded upward to $58.66. If f + m is 100% or more and C is positive, no finite price can satisfy the target under this model.

Stress-test the assumptions

Raise inbound shipping by 20%: the $8 shipping becomes $9.60 and contribution falls from $4.20 to $2.60. Reduce the sale price by 10%: a $45 sale at 13% fees leaves a $0.15 loss. Run these separately before combining changes; otherwise you cannot see which assumption matters most.

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What the result leaves out

Contribution is not take-home profit. Overheads, income taxes, advertising, storage, subscriptions, equipment and your time may still need allocating. A returns allowance is a planning estimate, not a guarantee that returns will cost that amount. Product compliance and authenticity cannot be converted into a reassuring margin percentage.

Keep evidence beside each number

Save the quote date, variant, shipping destination, fee source and sample record. For catalogue research, spreadsheet prices are imported values, not live quotes. Use the sample-order log to replace estimates with observed costs. Recalculate before a repeat order or a fee change.