Understanding Profit and Loss

"I sold a $50 card!" Great. What did you make? "Uh... $50?" No. Let me show you the real math that separates successful Pokemon businesses from struggling ones.

Money In vs Money Out (Simple Definition)

Profit = Money You Get - Money You Spend

That's it. But the devil is in the details.

Revenue vs Profit Explained

Revenue (Money In)

What buyers pay you

Example: Sold 10 cards at $20 each = $200 revenue

Profit (Money You Keep)

What's left after all costs

Example: $200 revenue - $150 costs = $50 profit

Key difference: Revenue is impressive, profit is what matters

My Year 1 mistake: Bragged about $5,000 revenue, ignored $4,300 in costs. Real profit: $700.

Hidden Costs in Pokemon Business

Most beginners only count purchase price. Big mistake.

Cost 1: Purchase Price (Obvious)

What you paid for the card.

Example: Bought Charizard for $30

Cost 2: Platform Fees (Often Forgotten)

eBay: 13.25% final value fee Mercari: 10% selling fee TCGPlayer: 10.25-14.75% depending on level

Example: Sold card for $50

Mercari fee: $5 (10%)
Net: $45

Many beginners forget this, assume they made $50

Cost 3: Payment Processing Fees (Easy to Miss)

Some platforms charge additional 2.9% + $0.30 for payment processing

Example: $50 sale

Payment fee: $1.75
Lost profit you didn't account for

Cost 4: Shipping Costs (Variable)

Envelope + stamp: $0.75 Bubble mailer + tracking: $4.00 Priority Mail Box: $9.00

Who pays? Sometimes you, sometimes buyer, sometimes split

Example: Offered "free shipping" on $50 card

Shipping cost: $4
Actual revenue: $46

Cost 5: Packaging Materials (Adds Up)

Per card:

Penny sleeve: $0.02
Top loader: $0.25
Bubble mailer: $0.40
Cardboard: $0.10
Tape/label: $0.05
Total: $0.82 per card

Sell 100 cards: $82 in packaging costs

Many sellers ignore this. I didn't. That's why I'm profitable.

Cost 6: Time (Often Ignored)

Per card sold:

Research pricing: 5 min
Photo and listing: 10 min
Package and ship: 10 min
Customer service: 5 min
Total: 30 minutes

Your time has value. If you make $10 profit but spent 30 minutes, that's $20/hour. Good or bad depends on your goals.

Real Profit Calculation Example

Scenario: Sold Charizard ex on Mercari

Revenue:

Sale price: $50.00

Costs:

Purchase price: $30.00
Mercari fee (10%): $5.00
Shipping: $4.00
Packaging: $0.82
Total costs: $39.82

Profit: $50.00 - $39.82 = $10.18

Profit margin: $10.18 ÷ $50.00 = 20.4%

Time invested: 30 minutes = $20.36/hour

Is this good? Yes for a side business, maybe not for full-time income.

Why Some Sales That Look Profitable Actually Lose Money

Scenario that loses money:

Bought card for $20 Sold for $25 (looks like $5 profit!)

Actual math:

Sale price: $25.00
Platform fee (10%): $2.50
Shipping: $4.00
Packaging: $0.82
Purchase: $20.00
Total costs: $27.32

Profit: $25.00 - $27.32 = -$2.32 LOSS

This happens more than you think if you don't do math first.

Calculating Profit Margins and Percentages

Profit Margin Formula

Profit Margin = (Sale Price - Total Costs) ÷ Sale Price × 100

Example:

Sale: $50
Costs: $40
Profit: $10
Margin: ($10 ÷ $50) × 100 = 20%

Good Profit Margins for Pokemon Business

20-30%: Decent, sustainable 30-40%: Good, competitive 40-50%: Excellent, premium positioning 50%+: Outstanding, hard to sustain

My average: 35% across all sales

Competitive cards: 15-25% (high volume) Vintage cards: 40-60% (lower volume)

When to Sell vs When to Hold

Sell Now If:

1. Quick profit available Card worth $30, you can sell today for $50 = $20 profit

2. Value likely to decline Competitive card rotating soon, sell before rotation

3. Need cash flow Business needs capital for new inventory

4. Market is peaking Holiday season, tournament season, hype peak

Hold If:

1. Value likely to appreciate Vintage sealed product, iconic Pokemon, rare errors

2. Market is depressed Post-holiday crash, post-set release crash

3. Don't need immediate cash Let time work for you

4. Selling costs too high relative to value $10 card with $5 in fees/shipping = not worth it

Example from my business:

Bought rotation cards at $5 (60% discount)
Held for 3 years
Nostalgia premium kicked in
Sold at $20 each
Profit: $15 per card (300% ROI)

Patience often beats speed in Pokemon cards.

Break-Even Point Explained Simply

Break-even = The sale price where you don't make or lose money

How to calculate:

Total Costs ÷ (1 - Fee Percentage) = Break-Even Price

Example:

Bought card: $20
Shipping: $4
Packaging: $1
Total costs: $25
Platform fee: 10%

Break-even: $25 ÷ (1 - 0.10) = $25 ÷ 0.90 = $27.78

Must sell for $28+ to make any profit

I calculate break-even for every purchase to know my minimum price.

Profit vs Profit Margin: What Matters More?

Profit: Actual dollars you keep Profit Margin: Percentage of revenue that's profit

Example 1: High Profit, Low Margin

Sold $500 card
Cost: $450
Profit: $50
Margin: 10%

Example 2: Low Profit, High Margin

Sold $10 card
Cost: $5
Profit: $5
Margin: 50%

Which is better? Depends.

High volume business: Lower margins, higher total profits Low volume business: Higher margins necessary

My strategy: Mix of both. Competitive cards (low margin, high volume) + Vintage cards (high margin, low volume)

Common Profit Calculation Mistakes

Mistake 1: Forgetting Fees

Counting gross sale instead of net after fees

Fix: Always subtract fees before calculating profit

Mistake 2: Not Tracking Small Costs

"Packaging is just a few cents, doesn't matter"

Reality: Sell 1,000 cards × $0.82 = $820 in packaging

Fix: Track everything

Mistake 3: Ignoring Shipping Losses

Offering free shipping without adding cost to price

Fix: Either charge shipping or build cost into price

Mistake 4: Not Factoring in Returns/Damages

Reality: 2-5% of sales have issues (returns, damages, disputes)

Fix: Build 5% buffer into pricing

Mistake 5: Comparing Revenue to Profit

"I made $10,000 last year!" (Revenue) "What was your profit?" "Uh... not sure"

Fix: Track and report profit, not revenue

The Bottom Line

Revenue is vanity. Profit is sanity.

You can have $100,000 in revenue and $0 profit. You'd be broke.

Or $20,000 in revenue and $8,000 profit. You'd be successful.

Calculate every cost. Track every expense. Know your true profit.

That's the difference between Pokemon business and Pokemon hobby.

Ready to Master Profit Calculation?

This is Module 2.3 of Week 2 in the Pokemon Business Startup Course.

Complete course includes:

Profit calculation spreadsheet
Break-even calculator
Fee calculator for all platforms
Real transaction examples

Enroll in the Pokemon Business Startup Course →

Module 2.3 of Week 2 - Pokemon Business Startup Course

Understanding Profit and Loss: Calculate Real Pokemon Business Profits