PRICING AND INVENTORY
How to Calculate Monthly Profit for a Resale Business
Sales can feel strong while profit is weak. A monthly calculation shows what the business actually earned after every cost.
It takes a few minutes a month once your records are in place.
THE CALCULATION
Three steps.
Use the same method every month.
- Revenue: all sales in the month, after refunds.
- Cost of goods sold: the cost of the garments you sold, from your cost-per-garment records.
- Operating costs: rent, fees, packaging, transport, wages and other running costs for the month.
Net profit = revenue − cost of goods sold − operating costs.
ILLUSTRATIVE EXAMPLE
One fictional month.
Units of your own currency. The stock you did not sell stays in inventory; it is not a cost this month, but it is cash already spent.
Example only.
| Line | Units |
|---|---|
| Revenue (180 items sold) | 5,400 |
| Cost of goods sold (180 × 16) | 2,880 |
| Gross profit | 2,520 |
| Rent and utilities | 900 |
| Fees and packaging | 450 |
| Transport and other costs | 300 |
| Net profit | 870 |
PROFIT IS NOT CASH
Watch cash separately.
A month can be profitable while cash falls, for example after a large stock order.
- Record stock purchases as cash out when you pay for them.
- Keep a cash reserve for slow months.
- Plan stock orders with your repeat-order plan.
USE IT
What the number tells you.
- Compare months and channels; low profit with good sales often means costs or pricing need attention.
- For a single order’s profitability, use the profit calculator.
NEXT STEP
Planning next month’s stock?
With monthly figures in hand, a quotation shows how a new order fits your cash and margins.
General guidance for planning purposes. Examples are illustrative; outcomes depend on your own market, stock, prices and costs.