Example (practice numbers only)
An item costs 40 and sells for 80 before fees.
| Measure | Calculation | Result |
|---|
| Markup | (80 - 40) ÷ 40 | 100% |
| Margin | (80 - 40) ÷ 80 | 50% |
From course 2.15.2: the same item bought for 40 with a total sale amount of 95 left 64.68 after fees, shipping and packaging, so profit = 24.68 and ROC = 61.7%. Margin on the total sale amount = 24.68 ÷ 95 = about 26%. Capacity: an average profit of 14 per item and 40 minutes of work per item gives 14 × 60 ÷ 40 = 21 profit per hour. In 40 working hours that is 60 items. If batching cuts time to 20 minutes per item (same profit), profit per hour becomes 42 and 40 hours covers 120 items.
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Calculate profit per item, margin, ROC and profit per hour for your three most common item types (or practice items), and choose the one to grow.
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I'm learning "Reselling at Scale: multi-channel and consignment contracts" on The Future Market. Lesson 1: "Scale starts with unit economics".
What the lesson teaches:
- Before this course: Reselling Operations: sourcing, listing and inventory (course 2.15.2). You already calculate a maximum buy price, source and check stock, use a listing template and SKUs, run an inventory sheet, handle shipping, returns and platform rules, and read monthly numbers. This course adds more channels, consignment contracts, money control and systems.
- Unit economics = what one item earns after every cost: item cost, platform and payment fees, shipping you pay, packaging and, if you count it, your time (course 2.15.2, Lessons 1 and 7).
- Markup is profit as a percentage of cost. Margin is profit as a percentage of the sale price. The same sale gives two different percentages, so always say which one you mean.
- Markup = (sale price - cost) ÷ cost × 100.
- Margin = (sale price - cost) ÷ sale price × 100.
- Return on cost (ROC) is profit ÷ item cost × 100 (course 2.15.2). Use it to compare where to put cash.
- Capacity = hours you can work ÷ time per item. Profit per hour = profit per item ÷ time per item.
The exercise I'm working on:
Calculate profit per item, margin, ROC and profit per hour for your three most common item types (or practice items), and choose the one to grow. ---
I'm stuck. Please:
1. Explain the main idea in plain, simple words with one everyday example.
2. Walk me through the exercise one small step at a time. Ask me what I've done so far before giving the next step.
3. Don't just give me the final answer. Help me do it myself, and check my work when I share it.
I'm a parent helping my child (about 8 years old) with a lesson called "Scale starts with unit economics" from the course "Reselling at Scale: multi-channel and consignment contracts".
Here's what the lesson says:
Before this course: Reselling Operations (course 2.15.2). If one lemonade cup earns you a little, selling more cups only helps if each cup still earns something after the lemons, the sugar and your time. Scaling means making the cup better first, then making more cups.
The activity:
Calculate profit per item, margin, ROC and profit per hour for your three most common item types (or practice items), and choose the one to grow. ---
Please explain this so an 8-year-old understands: short sentences, a fun everyday example, and no hard words.
Then give me 3 simple questions I can ask my child to check they understood, and a way to do the activity together, one tiny step at a time.