Quick answer
There is no single “good” ROI for every reseller. Higher ROI is better only when the expected resale price is realistic and the deal still produces enough cash profit. Compare ROI with absolute profit, risk and expected holding time before deciding where to deploy your money.
ROI formula for reselling
A simple return-on-investment calculation is:
Be consistent about what you include in cost. If cleaning, repairs or inbound postage are necessary to make the item sellable, they belong in the cost base.
Why 100% ROI is not automatically better
Buying for £5 and making £5 profit is 100% ROI, but only £5 cash profit. Buying for £40 and making £20 profit is 50% ROI but produces four times as much cash. You need both numbers.
Capital efficiency matters
ROI is most useful when capital is limited. If two items are equally easy to sell, a higher return on the same capital can let you recycle cash faster. But a high projected ROI based on an unrealistic resale price is meaningless.
Include holding time
Two 30% ROI deals are not equivalent if one sells in a week and the other normally takes six months. Track expected and realised days-to-sell. Faster capital turnover can compensate for a lower percentage margin.
Increase the hurdle for risky stock
When authenticity, testing, repair cost or market demand is uncertain, require more upside or buy at a lower price. A small expected return leaves very little room for one hidden defect to turn the flip into a loss.
Use ROI as a ranking tool, not a prediction guarantee
ROI is based on assumptions until the item sells. Use conservative resale estimates and compare multiple pieces of market evidence. Then record realised ROI after the sale so you can see whether your forecasts are consistently optimistic or conservative.
Compare realised ROI with forecast ROI
Projected ROI is only a decision aid. After the item sells, calculate realised ROI using the actual sale proceeds and actual costs. If your completed deals repeatedly achieve less than the ROI you expected at purchase, your resale assumptions, repair estimates or selling-cost assumptions may be too optimistic.
Keeping both forecast and realised ROI turns the percentage into a learning tool rather than just a pre-purchase score.
Related reseller resources
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