PRICING AND INVENTORY
How to Calculate the Break-Even Price of Second-Hand Clothes
The break-even price is the average price each sold garment must reach for sales, after fees, to cover everything you spent. Below it, you lose money; above it, you start to profit.
Calculating it before you buy tells you whether your market can pay enough.
THE FORMULA
Break-even price per garment.
Count every cost once.
Break-even price = total costs ÷ (garments sold × (1 − fee rate)).
- Total costs: stock, transport, sorting, packaging, storage and other costs for the order.
- Garments sold: sellable garments × expected sell-through, not the whole bale.
- Fee rate: platform or payment fees as a share of the sale price.
ILLUSTRATIVE EXAMPLE
Working it through.
Fictional figures in units of your own currency.
Notice that dividing by all 500 items instead of the 350 expected to sell would give 15.56, understating the break-even price by about 30%.
Example only, not a price or a forecast.
| Step | Value |
|---|---|
| Total costs | 7,000 |
| Sellable garments | 500 |
| Expected sell-through | 70% |
| Garments sold | 350 |
| Fee rate | 10% |
| Break-even price | 22.22 per garment |
ASSUMPTIONS
What the number depends on.
Change any assumption and the price changes.
- Sellable count is an estimate until the stock is sorted.
- Sell-through is a forecast; see how sell-through affects profit.
- Fees vary by channel, so calculate a price per channel.
USING IT
From break-even to selling price.
Break-even is a floor, not a selling price.
- Set prices above it using our guide to pricing second-hand clothes.
- Try your own figures in the thrift bale profit calculator, which also shows profit targets.
- If your market will not pay above break-even, change the order, the costs or the channel.
NEXT STEP
Calculating with real costs?
A quotation gives you the stock cost to put into the formula. Send an enquiry with your categories and quantity.
General guidance for planning purposes. Examples are illustrative; outcomes depend on your own market, stock, prices and costs.